Top 20 questions about Mastercard’s subscription billing rules

Sep 8, 2022
Nic Miller
Senior Director of Marketing
On October 11, 2022, Mastercard updated its Transaction Processing Rules to exempt nonprofits. For the most accurate information about how Mastercard’s subscription billing rules effect nonprofits, read: Mastercard Sets Rules Exemption for Nonprofits

Here are the top 20 questions asked during the September 7 live session we hosted with Mastercard to go over their new rules for subscription billing.

Some of the questions have been edited for clarity.

  1. When reading the Transaction Processing Rules, the list of transaction types includes goods and services — not donations. Were recurring donations considered when these rules were written?

    Yes. Though not specifically defined in Mastercard’s rules document, Mastercard has confirmed that recurring donations qualify as subscriptions and are therefore within the scope of the new rules.

  2. Why are charitable donations not treated as a recurring payment instead of a subscription?

    Recurring payments and subscriptions are the same thing. Someone makes recurring payments (donations) as part of a subscription billing agreement (recurring plan).

  3. What percentage of chargebacks are attributed to nonprofits and their recurring donations as opposed to for-profit subscriptions?

    The Nonprofit Alliance researched this and reported that nonprofits have lower chargeback rates than for-profit counterparts.

  4. Why are nonprofits just now hearing about these changes? It wasn’t clear until a few weeks ago that Mastercard’s new rules affected nonprofits. When we learned that the scope of the rules included nonprofits, we partnered with Mastercard to provide immediate guidance to organizations.
  5. Does this apply to existing recurring billing or new signups?

    New signups when the rules take effect on March 21, 2023.

  6. I heard Visa is exempting charities from its changes. If so, why wouldn't Mastercard do the same? Visa’s rules don’t exempt nonprofits — they do not apply to nonprofits. Mastercard’s rules do apply to nonprofits.
  7. What are the penalties for not complying?

    Mastercard hasn’t issued specific guidance for this, but all organization should pursue compliance by the March 21, 2023 deadline to avoid issues with noncompliance.

  8. If you believe you are compliant but find out you are not, what happens? Will Mastercard allow you to become compliant, or will you never be able to process Mastercard donations again?

    Mastercard hasn’t outlined specific penalties for noncompliance, but nonprofits should make good-faith efforts to comply with the rules before they take effect on March 21, 2023.

  9. If we do not have an email address for a donor, are we required to reach out after each gift in another way?

    No. Mastercard says additional efforts to notify the donor are not required.

  10. What if we have a donor’s email address, but they have opted out of receiving emails from us? You don’t need to send notifications to the donor, but make sure you’re compliant anyway. This enables you to follow the rules even when donors change their communication preferences in the future.
  11. If we have a donor that signs up as a monthly donor offline and provides an email address, do we still need to send them an email notification?

    Yes. Because the donor provided their email address to you, you should send the billing notifications that Mastercard’s rules require.

  12. For sending confirmation of enrollment, successful billing, or cancellation methods, how do we comply with these requirements for donors who don't provide their email address or use our website?

    You don’t need to send billing notifications to donors who don’t provide an email address.

  13. Do we still have to notify telemarketing donors through email even though they didn’t provide their email through our website?

    Yes, you should collect a donor’s email address during a telemarketing phone call. However, if the donor does not provide an email address, you don’t need to send them the billing notifications mandated by the rules.

  14. Is providing donors with an email and phone number to cancel sufficient?

    Yes, but to comply with Mastercard’s rules, the email address or phone number needs to be in an easy-to-find location on your nonprofit’s website.

  15. In some cases, we haven't retained if a card is Mastercard, Visa, etc. What is our obligation to retrieve that data to meet these requirements, or are we obligated to comply only when we can confirm a card is a Mastercard?

    You don’t need to gather card details for recurring plans created before the new rules take effect on March 21, 2023. But by this date, you should have the mechanisms in place to identify card type in order to provide the required billing notices to donors who give using a Mastercard payment method.

  16. How soon does a monthly receipt need to be sent following each monthly donation?

    Mastercard doesn’t outline a specific notification window, but to align with consumer expectations, send a receipt when the donation is processed.

  17. Can you confirm that we can use the wording “Manage my donation” vs. “Cancel”?

    Yes, Mastercard says you can implement either term to satisfy the requirement for providing an online cancellation method.

  18. Will Fundraise Up give us the ability to create unique emails based on billing method?

    Yes. Fundraise Up automatically sends required billing notifications to donors who give using a Mastercard payment method. Other payment methods, such as Visa, American Express, and Discover, are exempted from these notifications.

  19. Will Fundraise Up assist us in complying with the pre-notification requirement involving billings that occur over six months or longer increments of time?

    Yes. Fundraise Up is fully compliant with all of Mastercard’s new rules. If you are a Fundraise Up customer, no action is necessary.

  20. Where can nonprofits go for up-to-date information about Mastercard's changes?

    Fundraise Up. As a Mastercard Preferred Partner, we’re able to provide timely and accurate updates about Mastercard’s new rules and how they impact nonprofits. Make sure you’re receiving updates by subscribing on this page.

    About Fundraise Up

    Fundraise Up is a technology company unlocking the world’s generosity potential by optimizing how people give. Our donation platform helps nonprofits engage more supporters and grow revenue by providing easy ways to increase conversion, enable modern payment methods, and personalize the giving experience for every donor. Fundraise Up is the partner of choice for UNICEF USA, The Salvation Army UK, American Heart Association, and other impactful organizations across the globe.

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