Negative Option Billing: What Visa Requires

Negative option billing is the model where a customer's silence counts as consent to be charged. Free trial that rolls into a subscription, autoship that keeps shipping, a box that arrives monthly until somebody cancels. Visa has had its own rule for it since April 2023, separate from anything the FTC does, and the requirement most merchants miss is that your receipt email has to carry a working cancellation link.

What Visa Counts as a Negative Option Merchant#

The rules define it as a merchant that requires a cardholder to expressly reject an offer of additional goods or services during the transaction, or to expressly decline to participate in future transactions (ID# 0026365, Visa Core Rules and Product and Service Rules, 18 April 2026).

That's broader than most people assume. It isn't limited to free trials. Any arrangement where the customer has to act to stop being charged is in scope, which covers autoship supplements, continuity boxes, and a renewing membership that bills until cancelled.

Four Things a Negative Option Merchant Has to Do#

The rule sets out four obligations.

Before the agreement or transaction is completed, disclose the full content list below to the cardholder. For an e-commerce transaction, it has to be clearly visible on the checkout screen.

At the time of the agreement or first transaction, obtain express consent for any subsequent transactions. For e-commerce, that consent has to come through a click-to-accept button on the checkout screen. A pre-ticked box isn't consent, and neither is a line buried in terms the customer scrolled past.

Immediately after the first transaction and the consent, send a transaction receipt or written confirmation.

And at least seven days before initiating a subsequent transaction, send written notification if the terms have changed or if a trial, introductory offer, or promotional period is about to end.

The Disclosure Checklist#

The content list is specific. All of it has to be in the disclosure, the receipt, and the notification:

• The name of the merchant offering the goods and services
• A description of the goods and services
• The length of any trial period, introductory offer, or promotional period
• Clear disclosure that the cardholder will be charged unless they take steps to cancel
• The transaction amount and transaction date for the initial transaction, even if no amount is due, and for any subsequent recurring transactions
• The last four digits of the payment credential
• The cancellation policy
• Instructions for an easy way to cancel the agreement or any subsequent transactions

Note the fifth one. The amount and date are required for the initial transaction even if no amount is due. A $0 free trial still needs a receipt showing $0 and the date.

The Cancellation Link Is the Part People Miss#

Here's the clause that catches merchants out. If you send the receipt or notification by email, you also have to include a link to a page on your website where the agreement, order, or subsequent transactions can be easily cancelled.

Not a support address. Not a phone number during business hours. A link to a page that cancels it.

Plenty of subscription businesses send a polished confirmation email with a description, an amount, and a "questions? contact us" footer, and are in breach of this rule because there's no cancellation link in it. The email is where the requirement lands, and it's also the cheapest place to fix.

There's a format requirement attached too. If the consent happened through a website or an app, every receipt and notification has to be sent electronically.

Seven Days Before the Trial Converts#

The seven day notice is the other one worth auditing today. It triggers on two things: changed terms, or a trial, introductory offer, or promotional period ending.

Most trial-to-paid flows send nothing. The customer signs up for a 14 day trial, forgets, and the first thing they see is the charge. That's the exact sequence that produces a dispute, and the rule already told you to send a notice a week ahead.

If your trial is shorter than seven days, the arithmetic is worth sitting with. A 7 day trial leaves no room at all, which in practice means the notice has to go out at or near signup and the trial length needs to be a deliberate choice rather than a marketing default.

Up-Selling Is a Separate Rule#

Up-selling has its own section (ID# 0026364), and the definition is narrower than the everyday use of the word. The rules mean the sale of goods and services different from, and not affiliated with or a subsidiary of, the initial merchant the cardholder started with.

So adding a warranty to your own product isn't up-selling under this rule. Handing the customer off to a third party at checkout is.

The obligations mirror the negative option ones: disclose on the checkout screen, take express consent through a click-to-accept button, send a receipt immediately, and give seven days' notice before a subsequent transaction when terms change or a promotional period ends. One extra requirement on the content list: the up-selling merchant's name has to be presented in a way that clearly differentiates it from the initial merchant. That's the same logic behind the transaction receipt naming rules.

The Federal Rule Is Unsettled. The Card Rule Isn't.#

This is where a lot of merchants have drawn the wrong conclusion.

The FTC's 2024 amended Negative Option Rule, the one everyone called click-to-cancel, was vacated. In March 2026 the Commission opened an Advance Notice of Proposed Rulemaking on the Negative Option Rule, asking whether to keep the current rule, adopt provisions of the vacated 2024 rule, adopt something else, or skip regulation in favour of education (FTC, 2026). The federal position is genuinely open.

Two things follow. The FTC has not gone quiet on the conduct: the same announcement notes the Commission has received more than 100,000 complaints about negative options and related practices in the past five years, and its Bureau of Consumer Protection director pointed directly at difficult cancellation processes and retention tactics.

And Visa's rule was never part of that litigation. It was last updated in April 2023, more than a year before the FTC finalized its version, and it still requires the cancellation link and the seven day notice today. A merchant who loosened its cancellation flow after the vacatur relaxed against the wrong rulebook.

Why This Lands in Your Chargeback Ratio#

Card network rules aren't enforced the way a federal rule is. Nobody sends a citation. What happens instead is that the disputes arrive, and they arrive as the categories that hurt most.

A customer who didn't know a trial was converting files an unrecognized or unauthorized charge dispute, not a cancellation request. A customer who couldn't find the cancel button disputes instead of cancelling. Both land against your ratio, and a run of them puts you in range of the monitoring thresholds you can check with the chargeback ratio calculator.

For nutra and supplement brands and diet and weight loss programs, where continuity billing carries most of the revenue, this is the single biggest lever on the ratio. Underwriters know it, which is why a recurring billing file gets asked about cancellation flow rather than just volume.