Negative option billing is a sales model in which a customer’s silence counts as consent to keep charging: free trials that convert to paid plans, subscriptions that renew automatically, and continuity programs that ship product until cancelled. The model is legal but heavily conditioned, with regulators requiring clear disclosure, express consent and cancellation as easy as signup.
Why it matters
Continuity billing sits at the intersection of every risk this glossary covers: it generates the forgotten charges that become friendly fraud, the disputes that inflate a chargeback ratio, and the enforcement actions that make acquirers wary of whole verticals like nutra. Card networks impose their own requirements on top of the law, from trial disclosure to cancellation reminders. Run cleanly, subscriptions are the best business model in payments; run loosely, negative option billing is the fastest documented route from strong revenue to a terminated MID.