Recurring Credit Card Transaction Authorization
You are permitted to authorize recurring schedules that debit a credit card account by using a signed paper authorization form. The authorization requires that your customer understand the conditions under which the business is permitted to debit the account (such as amount, date, and frequency), as well as conditions for termination or change of the authorization.
- Payments for the same amount on a regular schedule, such as weekly or monthly service fees.
- Payments for a different amount on a regular schedule, such as utility bills.
- Payment plans for discharging a large debt, such as installment payments on a large purchase.
How to Authorize a Recurring Credit Card Transaction:
1. Have your customer sign and date the form (see templates) that includes the credit card account to be charged, how to terminate the schedule, and the information specified below for the type of recurring payment schedule
- Payments for the same amount on a regular schedule: Amount, frequency, and start date.
- Payments for a different (variable) amount on a regular schedule: Frequency, start date, not to exceed amount.
- Payment plans for discharging a large debt: Total due, # of payments, amount of payment, frequency, start date.
2. Give your customer a copy of the signed form.
3. Keep this form on file, stored digitally or in paper form, for one year after the last payment on the schedule.
4. Send a receipt for each transaction via mail or email.
5. Mail or email notification to your customer at least 10 days in advance of any change to the schedule amount or frequency.