Nonprofit Resources


Mastercard Significantly Modifies Recurring Giving Requirements

NOTE: This alert has been corrected to reflect that nonprofit merchants with a recurring payment program are required to comply with all of Mastercard’s new recurring billing standards if they are identified by Mastercard as having excessive chargebacks. We originally reported that such merchants would only need to comply with the receipting requirement. We also added details about the new standards and updated the information about the potential penalties for noncompliance.

We previously reported that Mastercard announced planned changes to its requirements for merchants that use subscription or recurring billing, which includes recurring gifts made to nonprofit organizations. Now Mastercard has significantly altered these new requirements. As of October 11, 2022, nonprofit organizations and for-profit businesses are exempt from the requirements as long as they do not have excessive chargebacks.

Mastercard had previously clarified that its new requirements, which are outlined in Section 5.4.1 of Mastercard’s Transaction Processing Rules, applied to nonprofit organizations. These standards went into effect on September 22, 2022, but Mastercard extended the effective date to March 21, 2023, for nonprofits.

Mastercard has now stated that while its new standards are recommended as a best practice for merchants with a recurring payment program, effective October 11, 2022, only nonprofit merchants that Mastercard has placed into its Acquirer Chargeback Monitoring Program (ACMP) as an Excessive Chargeback Merchant, High Excessive Chargeback Merchant, or Excessive Fraud Merchant for at least four months will be required to comply with the new standards. (See Mastercard’s “Data Integrity Monitoring Program” manual for definitions of these merchant categories.)

The new standards include:

  • Disclosing the donor’s selected donation amount and frequency when requesting credit card information as well as on any payment summary webpages. The Mastercard standards note that providing “a link to another webpage or requiring the Cardholder to expand a message box or scroll down the webpage to view the subscription terms does not satisfy this requirement.” In addition, donors must be asked to accept the terms of the subscription (the recurring donation) before completing the donation.
  • Sending a subscription confirmation via email or “other electronic communication method” at the time of enrollment in recurring giving. The communication must include the subscription terms and instructions on how to cancel the subscription.
  • Providing a receipt, via email or “other electronic communication method,” after every successful billing. This must include instructions on how to cancel the subscription.
  • Providing an online cancellation method or clear instructions on how to cancel that are “easily accessible online,” such as through a “Cancel Subscription” or “Manage Subscription” link on the organization’s home page.
  • For recurring payment plans that bill less frequently than every six months (180 days), sending an electronic reminder outlining the terms of the subscription and instructions on how to cancel it seven to 30 days before the next scheduled donation date. The communication must reference in the subject line that it relates to upcoming charges, and the message “must be distinct from marketing communications.”

Organizations in the ACMP for at least four months or more that do not implement the standards may be subject to a Category A noncompliance assessment each month, in addition to the assessments applicable under the ACMP. A Category A noncompliance assessment can be up to $25,000 for the first violation and increase with each subsequent violation, up to $100,000 per violation for the fourth and subsequent violations within 12 months. More information about Category A noncompliance assessments is available in Section 2.1.4 of the Mastercard Rules.

In its statement about the revised standards, Mastercard said that it made this change after engaging with merchants and recognizing that “some of these requirements present unique challenges to merchants that have found other effective ways to manage their subscription and recurring payment model.”

Please contact us with any questions.


This has been updated. 

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