Merchant Account for a Subscription Business
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Recurring billing creates its own disputes: customers forget what they signed up for, or cancel and are charged again. This page summarizes Visa's cancellation guidance and what Visa, Stripe and Square publish about subscription businesses. It does not promise approval.
Nothing on this page is an approval or a guarantee. Each provider decides on its own whether to open an account and on what terms, and it can change its policies at any time.
What Visa calls this business
Visa assigns each merchant a four-digit category code. This is Visa’s own wording, from its Merchant Data Standards Manual (April 2026).
MCC 5968: Direct Marketing – Continuity/Subscription Merchant
Source: PDF page 83.
Search all merchant category codes
Visa and subscription businesses
Visa has a specific category for subscription merchants and flags it for card-absent sales.
Visa describes MCC 5968, Direct Marketing: Continuity/Subscription Merchant, as merchants that sell subscription products for delivery, such as book clubs, magazines and nutraceuticals, through direct mail, email, apps or salespeople.
Visa: Merchant Data Standards Manual (April 2026)· Checked 2026-10-15
Visa’s manual lists “high integrity risk” MCCs: for card-absent transactions 5122 (drugs and sundries), 5912 (drug stores and pharmacies), 5966 (outbound telemarketing), 5967 (adult content and services), 5993 (cigar stores and stands), 7273 (dating and escort services) and 7995 (betting); and for certain card-absent transactions 4816, 6211, 5968 (subscription “negative option” merchants), 5816 (skilled game wagering) and the crypto MCCs 6051 and 6012.
Visa: Merchant Data Standards Manual (April 2026)· Checked 2026-10-15
Cancellations and recurring charges
Visa says that when a customer cancels a recurring charge you should cancel it immediately or as the customer specifies, confirm the cancellation date in writing, and not bill the card after a cancellation request.
Visa: Dispute Management Guidelines for Visa Merchants (June 2024)· Checked 2026-10-15
Visa says you set your own return, refund and cancellation policies, and that clear disclosure at the time of purchase (printed on the receipt for card-present sales) helps avoid disputes.
Visa: Dispute Management Guidelines for Visa Merchants (June 2024)· Checked 2026-10-15
Visa says cardholders must be able to recognize your name on their statements, and tells merchants to check with their acquirer that the doing-business-as name, city and state are correct.
Visa: Dispute Management Guidelines for Visa Merchants (June 2024)· Checked 2026-10-15
What processors publish
Stripe lists negative option marketing, negative option membership clubs and reduced price trials with unclear or hidden pricing as prohibited.
Stripe: Prohibited and Restricted Businesses (updated 2026-09-22)· Checked 2026-10-15
Square’s payment terms list businesses it does not support, including direct marketing or subscription offers or services, internet, mail order or telephone order sales of age-restricted products such as tobacco, and taking donations if you are a non-profit that regularly does business in California or holds property for charitable purposes there. They also say you may not use Square if you are connected to a business that sells illegal goods, giving cannabis as an example.
Square Payment Terms (section 3, unsupported industries)· Checked 2026-10-15
How online disputes are measured
Visa’s monitoring program uses one count-based ratio for card-not-present transactions: fraud reports plus disputes, divided by settled transactions.
Visa: Acquirer Monitoring Program fact sheet (2025)· Checked 2026-10-15
Visa’s fact sheet sets the “Excessive Merchant” level at a ratio of 220 basis points (2.2%) with at least 1,500 monthly fraud and dispute counts in the U.S., and a footnote says the threshold dropped to 150 basis points (1.5%) on 1 April 2026.
Visa: Acquirer Monitoring Program fact sheet (2025)· Checked 2026-10-15
Questions to ask a provider before you apply
These are questions, not claims about any provider. Get the answers in writing.
- How does a customer cancel, and can you show proof of the date and the confirmation you sent?
- Is the price and billing frequency clear before the customer pays, including any trial?
- Does the provider restrict negative-option billing or free trials?
- Will it hold a reserve? Get the terms in writing.
- Does your billing software connect to the processor?
Frequently asked questions
Is a subscription business high risk?
Visa lists subscription “negative option” merchants (MCC 5968) among its high integrity risk categories for card-absent sales, and Stripe’s explainer names memberships and subscription box services among industries often treated as higher risk. Some providers, including Square, list direct marketing or subscription offers among unsupported businesses.
What must I do when a customer cancels?
Visa says to cancel immediately or as the customer specifies, confirm the cancellation date in writing, and not bill the card afterwards.
What is a negative option?
Stripe prohibits negative option marketing with unclear or hidden pricing, including reduced-price trials that do not make the pricing clear.
Sources for this page
- Visa: Merchant Data Standards Manual (April 2026) (Checked 2026-10-15)
- Visa: Dispute Management Guidelines for Visa Merchants (June 2024) (Checked 2026-10-15)
- Stripe: Prohibited and Restricted Businesses (updated 2026-09-22) (Checked 2026-10-15)
- Square Payment Terms (section 3, unsupported industries) (Checked 2026-10-15)
- Visa: Acquirer Monitoring Program fact sheet (2025) (Checked 2026-10-15)