Renewals catch people off guard
A customer signs up, forgets, and sees a charge months later they don't recognize, so they call the bank instead of the merchant.
Subscriptions & memberships
Subscription, Continuity & Negative-Option Billing
We board subscription, continuity, and negative-option billing, including free-trial offers, with a published 4–6% rate range, AI chargeback defense, reserves that taper, and underwriting that understands ROSCA and state automatic-renewal laws.
- Continuity & free-trial ready
- ROSCA-aware underwriting
- Published 4–6% range
Answer first
The model that prints revenue and breeds chargebacks
A subscription business is the best and the worst kind of merchant for a processor to board. Best, because predictable recurring revenue is the cleanest cash flow in commerce. Worst, because every renewal is a small opportunity for a customer to dispute, and at scale those small opportunities compound into a chargeback ratio that gets accounts frozen. The same mechanic that makes the model attractive, billing on autopilot, is the one that generates the disputes.
That tension is why mass-market processors are a bad fit for serious subscription brands. They board you while you're small and the ratio is quiet, then freeze you the month a free-trial offer takes off and the disputes arrive in a wave. We do it the other way: underwrite the billing model up front, look hard at the part that actually drives disputes, your disclosure and your cancellation flow, price the risk honestly, and support the account through the dispute traffic that recurring billing inevitably produces.
Why it's high risk
The billing structure manufactures disputes
Free trials convert silently
A customer who meant to cancel before the trial ended disputes the first real charge they didn't expect.
Cancellation friction
When the cancel button is buried in a retention maze, a frustrated customer takes the fastest exit, a chargeback.
Flagged MCC 5968
Continuity and subscription merchants classify elevated-risk under MCC 5968 before the first renewal settles.
Note
Free-trial and continuity offers: enhanced review
Straightforward auto-renewing subscriptions board on our standard high-risk path. Free-trial and negative-option continuity offers are a restricted model that requires sponsor pre-approval, our sponsor bank reviews the offer before boarding, because these structures drive the most disputes and the most regulatory attention in the category. That means extra documentation, a closer look at your offer and cancellation flow, and a longer timeline. It is not a soft no; clean offers get approved. We set the expectation honestly, see how our underwriting works.
Compliance
Negative-option compliance in 2026: what actually applies
The FTC's federal “click-to-cancel” rule, the amended Negative Option Rule, was vacated by a federal appeals court in July 2025, before it took effect, and the FTC restarted rulemaking with an advance notice in March 2026. So there is no single federal click-to-cancel rule in force right now. The mistake is reading that as “cancellation rules are gone.” They aren't. The vacated rule sat on top of a stack of laws that are all still binding: ROSCA, Section 5 of the FTC Act, and state automatic-renewal laws in California, New York, and a lengthening list of others, several of which are stricter than the rule that got struck down.
What all of those laws require overlaps almost completely. Disclose every material term, price, billing frequency, what happens when a trial converts, how to cancel, before you charge, in a way the customer actually sees rather than buried in a link. Get express, informed consent to the recurring charge, separate from the rest of the checkout. And give customers a genuinely easy way to cancel. Cancellation friction doesn't retain customers, it converts them into chargebacks, and every dispute pushes your ratio toward Visa's 1.50% VAMP ratio and Mastercard's excessive-chargeback thresholds. An easy exit keeps your ratio down, which keeps your account up.
Rates & reserves
We publish the band
| Effective rate | Reserve | Settlement | |
|---|---|---|---|
| Auto-renewing subscription | 4%–5% + interchange | 0–5% rolling, tapering | Daily / next-day |
| Free-trial / continuity | 5%–6% + interchange | 5–10% rolling, tapering | Daily / next-day |
A straightforward auto-renewing subscription with clean disclosure sits lower in the range; a free-trial or continuity offer sits higher because it carries more dispute exposure. Final rate is set by underwriting and stated in your memo. See full pricing →
How approval works
Underwritten before boarding, not after
1
You apply
Business details, your product and how it's marketed, your billing model (auto-renew vs. free-trial vs. continuity), prior statements, and your cancellation flow.
2
AI screens the risk
Velocity and behavioral signals tuned to recurring-billing failure modes, renewal surprise, trial-conversion friction, card testing.
3
A human decides
An underwriter reviews your offer page and cancellation flow and writes the decision, rate and any reserve in writing.
4
You go live
We connect your gateway and recurring billing. Free-trial and continuity offers add sponsor-concurrence review time, set up front.
A written decision
You see exactly where your file stands
No black-box “no.” Underwriting tracks every requirement to completion and issues a written memo: why you were approved, your rate, and any reserve with its taper, visible before you go live.
- Onboarding checklist tracked to 100%
- Reserve %, hold period and taper in writing
- Disclosure and cancellation flow reviewed up front
FAQ
Subscription billing FAQ
What is negative-option billing?
Negative-option billing is any model where a customer's silence or inaction counts as consent to keep being charged, free trials that convert to paid, auto-renewing subscriptions, and continuity programs that ship and bill on a schedule until the customer cancels. It's a legitimate, enormously common model, but it's also one of the most regulated and dispute-prone in payments, which is why card networks treat it as elevated-risk and why underwriting looks hard at how you disclose terms and handle cancellation.
Is negative-option billing legal in 2026?
Yes, when it's done with clear disclosure, express consent, and easy cancellation. The FTC's federal click-to-cancel rule was vacated in July 2025 and rulemaking restarted in March 2026, so there's no single federal click-to-cancel rule in force right now, but ROSCA, the FTC Act, and state automatic-renewal laws in California, New York and a growing list of states all still apply, and several are stricter than the vacated rule. Compliant merchants build to the strictest state standard.
Why do subscription businesses need a high-risk merchant account?
Because recurring billing generates disputes structurally: customers forget they signed up, get surprised by a renewal, or can't find an easy way to cancel and reach for a chargeback instead. That pushes chargeback ratios toward card-brand thresholds faster than one-time-purchase models. Mass-market processors board subscription brands and then freeze them when ratios climb, so a high-risk specialist that prices and supports the model is the stable choice.
Do you board free-trial and continuity offers?
Yes, with enhanced review. Free-trial and continuity offers are a restricted model that requires sponsor pre-approval because they're the single largest source of subscription disputes and regulatory attention. We board them when the offer is structured cleanly, terms disclosed before the charge, express consent to the recurring billing, and a genuinely easy cancellation path. Expect underwriting to examine your offer and cancellation flow closely and the timeline to run longer than a standard account.
How much does subscription payment processing cost?
Our published range for subscription and continuity billing is 4–6%, with a rolling reserve on higher-risk profiles, and your final rate is set by underwriting based on your volume, average ticket, billing model, and chargeback history. Free-trial and continuity offers sit higher in the band because they carry more dispute risk than a straightforward auto-renewing subscription. You see the range up front rather than getting a sales call.
How does cancellation friction affect my chargeback ratio?
Directly, and it's the thing that sinks most subscription accounts. When a customer wants out and can't cancel easily, they dispute the charge instead of emailing support, and every dispute pushes your ratio toward Visa's 1.50% VAMP line and Mastercard's excessive-chargeback thresholds. An easy, honest cancellation flow is simultaneously your legal compliance and your single most effective chargeback-prevention tool.
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Keep exploring
Board the subscription model that stays live.
If you run a legitimate subscription, continuity, or membership business and want processing that boards your model and keeps it live as you scale, that's exactly what we do.