Recurring Credit Card Payment Processing

There is a special type of transaction arrangement that enables consumers to make payments automatically on a pre-arranged schedule, without the need to initiate manually each individual installment. If a card acceptor offers consumers the recurring credit card payment processing option, which allows transactions to be made automatically, the merchant is required to:

• Obtain the authorized cardholder's agreement for the merchant to charge his or her bank card account prior to submitting the first recurring charge, and
• Inform cardholders that they can take back their consent at any given time.

The method the retailer uses to obtain the customer's agreement must provide a disclosure that the merchant may obtain updated card account data from the financial company or bank that has issued the consumers' cards.

The retailer is required to keep any evidence of such agreement for no less than twenty-four months after the date on which it submits the last recurring payment.

Recurring credit card payment processing rules require that card acceptors, prior to submitting each installment:

• Obtain an authorization approval.
• Complete a transaction record, only with the note "Signature on File," if requested, on the signature line of the payment form and the adequate electronic descriptor on the payment data.

If the recurring agreement plan is terminated for any reason whatever, then merchant account rules state that the retailer is required to notify all customers for whom it has set up recurring payment plans that it no longer will accept the card.

The termination of a particular card account is seen, for recurring credit card payment processing purposes, as an instant cancellation of that customer's agreement for recurring charges. In fact, the credit card issuer is not required notify the retailer of any such account cancellation, nor does it carry any liability to the retailer that arises from the cancellation.

The retailer's is mandated to fulfill its customers' requests for the discontinuation of the recurring agreement instantly and issue a cancellation number for each one of them. If an account is terminated, or if a customer takes back his or her agreement to the recurring plan, the merchant is responsible for the arrangement of another method of payment (as may be applicable) with the customer. The retailer will then authorize the issuer to place a hyperlink from the issuer's website to the retailer's own website (including the retailer's home page, check-out page or its automatic / recurring check-out page) and prominently display the retailer's customer support contact information.