Glenbrook Partners

The U.S. government is about to disrupt the cancellation flow for subscription merchants We’ve known this was coming for some time now, but it appears the Federal Trade Commission is putting the final touches on the “Click to Cancel” rule. A core component of the rule requires that the mechanism to cancel must be as simple as it was to sign up. If you signed up online with the click of a button, you must also be able to easily click a button to immediately cancel a subscription. 𝗖𝗮𝗻 𝗜 𝗼𝗳𝗳𝗲𝗿 𝗱𝗶𝘀𝗰𝗼𝘂𝗻𝘁𝘀 𝗶𝗳 𝗺𝘆 𝗰𝘂𝘀𝘁𝗼𝗺𝗲𝗿 𝗰𝗵𝗼𝗼𝘀𝗲𝘀 𝘁𝗼 𝗰𝗮𝗻𝗰𝗲𝗹? You can, but the proposed rule states that before doing so, you must receive consent from the customer. If they decline, you cannot present any offers and must cancel the subscription immediately. This could harm retention, as merchants will be unable to save customers that want to cancel. Although, one could argue that customers that are willing to be convinced will give you the opportunity. This should push you invest in a better customer experience and better communication prior to this stage in the customer journey. 𝗪𝗵𝗮𝘁 𝗶𝗻𝗳𝗼𝗿𝗺𝗮𝘁𝗶𝗼𝗻 𝗱𝗼 𝗜 𝗻𝗲𝗲𝗱 𝘁𝗼 𝗱𝗶𝘀𝗰𝗹𝗼𝘀𝗲 𝗯𝗲𝗳𝗼𝗿𝗲 𝗜 𝗰𝗮𝗻 𝗯𝗶𝗹𝗹 𝘁𝗵𝗲 𝗰𝗼𝗻𝘀𝘂𝗺𝗲𝗿? Merchants must present the following information in a clear and conspicuous manner prior to collecting billing information: 1. The consumer’s payments will be recurring 2. The deadline by which consumers must act to stop charges 3. The costs that will be charged 4. The date the payment will be processed 5. The mechanism by which the consumer can cancel the payment This can harm conversion, as sometimes these details are obfuscated. On the other hand, this could help reduce refunds and chargebacks from customers that were less educated about free trial logistics. 𝗜𝗳 𝗜 𝗵𝗮𝘃𝗲 𝗮 𝗳𝗿𝗲𝗲 𝘁𝗿𝗶𝗮𝗹 𝘁𝗵𝗮𝘁 𝗰𝗼𝗻𝘃𝗲𝗿𝘁𝘀 𝘁𝗼 𝗽𝗮𝗶𝗱, 𝗱𝗼 𝗜 𝗻𝗲𝗲𝗱 𝘁𝗵𝗲 𝗰𝗼𝗻𝘀𝘂𝗺𝗲𝗿’𝘀 𝗰𝗼𝗻𝘀𝗲𝗻𝘁 𝘁𝗼 𝗯𝗶𝗹𝗹 𝘁𝗵𝗲𝗺? Yes, you must obtain affirmative consent before charging the consumer. 𝗗𝗼 𝗜 𝗻𝗲𝗲𝗱 𝘁𝗼 𝗿𝗲𝗺𝗶𝗻𝗱 𝗺𝘆 𝗰𝘂𝘀𝘁𝗼𝗺𝗲𝗿𝘀 𝗮𝗯𝗼𝘂𝘁 𝘁𝗵𝗲𝗶𝗿 𝘀𝘂𝗯𝘀𝗰𝗿𝗶𝗽𝘁𝗶𝗼𝗻? Yes, there is proposed language that states merchants will need to provide an annual reminder to consumers enrolled in negative option plans for non-physical goods. This will likely increase voluntary churn after these messages have been delivered.  

I spent a good chunk of July in Mongolia and the Philippines, two places that are pretty different. Landlocked vs. island chain. Two people per sq km vs. 394. But ironically, my payments experience in both countries ended up being pretty similar: skewed toward cash. While it was easy enough to use my US credit card to make purchases in Ulaanbaatar, it became increasingly difficult to find card-accepting merchants the farther we got from the capital. But I also found it interesting that I didn’t really see a lot of mobile wallet acceptance, either, given that East Asia strikes me as a hotbed of mobile wallet innovation and many Mongolians (even in rural areas) have access to smartphones. The importance of cash outside of Ulaanbaatar took me by surprise. This meant that I ran out of tugriks in Kharkhorin, near the ancient capital of the Mongol Empire. I was able to stop at a Khan Bank location to make a withdrawal and encountered something pretty cool: an e-government self-service kiosk where you could scan your Mongolian government-issued ID and submit applications, request documents, or make payments, according to our guide. Pretty neat. According to The Banker, Khan Bank has been on a major digitization push (https://lnkd.in/gDD_jYEM) over the past few years and it’s cool to see that translating into increased government services accessibility. But I was just happy to replenish my tugrik supply. After winding our way back to Ulaanbaatar, we headed to Manila and Iloilo through Seoul. The payments scene in the Philippines was quite different and I ended up suffering from serious wallet FOMO. I made the mistake of walking from my partner’s family house to the nearby Dunkin Donuts with only a credit card. When I got to the counter, I was told I could only use cash or GCash… Grab is everywhere. But setting up a GCash wallet required a Philippines ID (even though I was able to link my credit card to pay for Grab rideshare). In the end I walked back to the house, grabbed my debit card, withdrew pesos from an ATM in a bank branch next to the Dunkin Donuts, and used cash to pay for a properly American-tasting iced coffee. This sort of dynamic continued (particularly at stores with small typical basket sizes, like 7/11) and I ended up using cash just as much as I had in Mongolia. So I guess cash is still king in a way, thanks to its near-universal acceptance. It’s an underrated payment system! Let me know if you want to talk payments, US or international. Or if you want travel advice, I can provide some of that, too :)