Requirements for establishing a recurring transaction
Visa requires the merchants to obtain an order form from the cardholder to establish a recurring payment process. The order form must contain the transaction amount unless the recurring transaction will be for varying amounts, the frequency of the recurring charges, and the duration of time for which the cardholder permission is granted. The order form should also contain the cardholder's signature (written or electronic) authorizing goods or services to be periodically charged to his/her account. The order form may be any of the following; mail order form, recurring transaction form, preauthorized healthcare transaction form, or an e-mail or other electronic record that meets the requirement.
Processing recurring transactions
When submitting a recurring transaction, the “Recurring Payment Indicator” must be included in the authorization record. Authorization is required on all recurring payment transactions. Visa transactions require AVS on the initial transaction. The subsequent Visa transactions do not require AVS unless a change in the cardholder/merchant agreement or the duration of the recurring payment is more than one year apart.
If the request is submitted via the Internet, the merchant must provide a transaction receipt. The receipt should include the frequency and duration of the recurring transaction as agreed by the cardholder and “Recurring Transaction” indicated on the signature line. The merchant must adhere to Internet transaction requirements regarding cardholder data security and receipt requirements.
To ensure customer satisfaction
- Provide customers with a toll-free number, an e-mail address, and/or easy to find and use online procedures for recurring service sensitive.
- Fully disclose all necessary transaction term and conditions.
- Notify the customer of the transaction before or at the time of billing.
The merchant should supply notification of how to cancel a recurring payment authorization. If the merchant allows the recurring payment to be established via the Internet, they must also provide a cancellation option electronically.
To cancel recurring transactions
- Check customer logs daily for recurring cancellations. Take the appropriate action in a timely manner.
- Notify the customer that the account has been closed.
- Process all credits promptly and notify the customer.
- Provide the cardholder with the recurring transaction cancellation number.
Recurring transaction prohibitions
The merchant may not charge finance charges for a recurring transaction. Nor can they deposit the recurring transaction if the cardholder has cancelled, deposit the transaction if the authorization is declined, or submit a partial payment for goods or services purchased in a single transaction. The cardholder account number may not be used for any purpose other than a recurring payment.