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Trust is the value that underpins the entire payments ecosystem
The need to embed trust in the purchase process is why we have consumer protection legislation and regulation.
Card schemes (Visa, Mastercard, American Express et al) have developed sophisticated rule books to describe what is expected of industry participants in their franchises, and police it. The end goal of which is to ensure trust is woven into the fabric of the payments lifecycle at every layer.
Aside from the moral obligation to protect customers from harm, it makes total sense from a profitability perspective too.
Where trust is strong, money moves - and where money moves there is profit to be earned.
First, an anecdote. Then some industry best practice commentary.
Anecdote 📖
A while back, I subscribed to a service from a well-known company. After a few months, I noticed a significant deterioration in the quality of the service, and it no longer suited me to keep it. So I decided to cancel. Here are the steps I needed to follow to cancel:
Log into the app
Click ‘Settings’
Click ‘My subscription’
Scroll through offers, discounts and option to ‘pause subscription’ (pause allowed for 1 month only)
Click small font link at the bottom of the page ‘Cancel subscription’
Retention offer - various discount options to stay
Click ‘I still want to cancel’
Click 1 of 5 mandatory ‘cancellation reason’ options
Click 1 of 3 mandatory ‘reason for original subscription’ options
Note: the step 9 options changed depending on the cancellation reason selected in step 8
Click ‘I still want to cancel’
Retention offer - various discount options to stay
Scroll to the base of the retention offer page to see “To cancel, call us on … open 9am - 5pm Monday to Friday”. No online cancellation button
Call the number (it was 10am on a weekday)
Select option 1 - cancel subscription
Enter the queue to speak to an advisor
After 10 minutes in the queue, my call is answered
Advisor completed customer account verification checks
Advisor asked the reason for my call, and I said I would like to cancel the subscription please
Advisor asked if I had enjoyed the service I had already received, and I said I would like to cancel the subscription please
Advisor asked if I knew that I had an unused percentage discount offer, and I said I would like to cancel the subscription please
Advisor asked if I would like to receive a further discount on my next order, and I said I would like to cancel the subscription please
Advisor asked that if I would like to cancel, they would proceed and send me an e-mail to confirm, I said yes please
E-mail received saying ‘sorry to see you go, here is a link to reactivate your subscription’
No post-cancellation feedback survey was offered
Infuriating. It took about 2 minutes to subscribe, and a wrestling match to cancel. After navigating through that maze, I am now totally emotionally turned-off from the brand and will not consider a return.
It is completely logical to do retention, but by step 9 or 10 of the process it crossed my mind to give up and call my bank to cancel and dispute any over charges that may have arisen from the point at which I tried to cancel (respecting the Ts & Cs of the subscription timings, of course). Many people are far less patient. I hate to think what the chargeback rate is for this business. I hope they have someone to manage that well.
Industry best practice recommendations 📋
Merchants wish to protect their revenue. It makes sense. However, badly (deliberately or otherwise) implemented retention processes can lead to negative consequences. It is a risk/reward trade-off. Where that process is onerous, it can seriously harm your brand reputation. Too much risk for too little reward. Metrics like LTV-CAC will show it in stark numbers that should not be ignored.
In the quest to protect and grow revenue – and improve performance metrics like customer acquisition, retention, MRR, ARR etc. – some businesses deliberately and consciously decide to try to manipulate the customer at point of sale, and post-sale, by obfuscating the information and process needed to i) fully understand, and ii) end a service. Many globally recognisable brands sadly fall into this category, not just smaller businesses - legitimate or otherwise. It is a short-sighted strategy that places Quarterly Results above customer support.
At card scheme level, there are multiple obligations that each participant to a transaction must abide by. Examples include:
From Visa Core Rules and Visa Product and Service Rules (note: excerpts copied here purely for illustration purposes, not exhaustive)
5.4.2.5 Disclosure to Cardholders of Return, Refund, and Cancellation Policies
“For Transactions at an Electronic Commerce Merchant, during the sequence of pages before final checkout, and include a “click to accept” button, checkbox, or other acknowledgement. The disclosure may be a link to a separate page if that link forms part of the “click to accept” acknowledgement and refers to the return, refund, or cancellation policy.”
And
5.8.11 Advance Payments and Repeated Payments - Table 5-19: Transaction-Specific Requirements for Partial Payments, Advance Payments, and Transactions Using Stored Credentials (continued)
Recurring transactions: The Merchant must do all of the following (multiple requirements):
“Provide a simple cancellation procedure, and, if the Cardholder’s order was initially accepted online, at least an online cancellation procedure.”
More changes are coming that card issuers will need to implement
4.1.21.2 Subscription Management Controls – Europe Region Effective 18 April 2026
An Issuer of consumer Debit Cards must provide a Cardholder, via an Issuer website and/or application (excluding telephone), with functionality to identify and, as applicable, deactivate or reactivate future payments for any of the following:
Instalment Transactions
Recurring Transactions
Unscheduled Credential-on-File Transactions
Advice to merchants 🛒
Ensure your cancellation policies and processes are clearly articulated to the customer through the checkout and payment process
Make the option to cancel as simple and low friction as the option to purchase
If the customer can click a button online/in-App to make payment, provide similar options to cancel payment/service
Ensure Terms and Conditions, Cancellation and Refunds policies are clear through the lifecycle of a payment/service, in your correspondence and on websites and apps
Have retention processes, but don’t make them too onerous
Capture feedback about the reason for cancellation, and truly listen to it
Monitor, report and analyse your refund and chargeback metrics to check if there is a correlation between these and the consumer experience. Identify what is not working optimally and fix it where needed
Make serving your customers well your primary measure of success
Advice to acquirers 🏦
Ensure both you and your merchants implement and abide by consumer legislation/regulation and the card scheme rules around repeat billing and subscriptions
Implement robust checks and controls in your merchant onboarding processes, including underwriting and website compliance procedures, and enshrine relevant obligations in your merchant contracts
Conduct persistent monitoring; report and analyse outlier merchants that have excessive chargebacks and refunds arising from subscription challenges, e.g. use dispute reason code data
Directly contact the customers of merchants that have outlier performance and query their experiences to build your understanding of what is really happening
Take action where excessive/persistent outlier performance is detected, such as:
Speak to your merchants to understand the underlying drivers, and whether there are signs of deliberate manipulation and/or malicious intent
Where necessary, implement additional controls and enforce terms and conditions of service
If the problem is not remediated, consider taking stronger action proportionate to the risk
Let us all work together to ensure there is trust in the payments ecosystem, and place the customer at the heart of everything we do.
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