This BPN Services Agreement is entered into by and between Factor Systems, LLC d/b/a Billtrust, with a place of business at 1009 Lenox Drive, Suite 101, Lawrenceville, NJ 08648 (the “Company” or “we” or “us” or “Billtrust“) and you (“Customer,” “Merchant,” or “you”) and along with the Application and all appendices, exhibits and attachments shall be collectively referred to as the Agreement (“Agreement”). The effective date of this Agreement shall be the date Company approves Customer for participation in the Services (“Effective Date”). Capitalized terms not otherwise defined herein shall have the meaning specified in Appendix I hereto.
Company operates the Billtrust Business Payment Network (the “BPN”) which facilitates the receipt of payments by merchant suppliers for goods or services provided to their customer buyers. Subject to the terms and conditions of this Agreement, Company will provide you with payment facilitation Services (as described herein) with respect to credit card transactions (“Transactions”) as determined by Company and authorized by Bank and Acquirer. You understand and agree that you are expressly prohibited from presenting any Transaction for any purposes related to any illegal or prohibited activity, including but not limited to money-laundering, criminal, or financing of terrorist activities, or any transactions prohibited by Company, Bank, or Acquirer.
1. Merchant Services Agreement. Company is a party to an agreement with an Acquirer or a Bank, which provide payment processing services to Company on behalf of Customer. Customer hereby acknowledges that it is entering into and is bound by the Merchant Services Agreement for Customers with an Acquirer or Bank.
2. Operating Account. Customer shall establish an Operating Account at a financial institution of Customer’s choice prior to processing any payments and shall maintain such account and authorize Company to debit therefrom throughout the term of this Agreement and for 90 days thereafter with sufficient funds to satisfy all of its obligations hereunder. Any changes proposed to the Operating Account shall be submitted in writing to Company at least six (6) days prior to the next debit date and must be approved in writing by Company. Company may debit the Operating Account in any amounts owed hereunder by Customer for Fees or otherwise.
3. Compliance. Customer will comply in all respects with the Rules. Customer represents and warrants that it is, and will remain compliant with the Payment Card Industry Data Security Standard (“PCI-DSS”) during the Term of this Agreement. Customer agrees to provide Company with a current copy of its PCI AOC (Attestation of Compliance or appropriate PCI Self SAQ (Self-Assessment Questionnaire) the earlier of (a) ninety (90) days from go live, or (b) ninety (90) days from Customer’s first payment of the Services. In the event of any conflict between this Agreement and any Rules, the Rules shall control.
4. Application. You represent and warrant that all of the information that you provided in the Application is true, complete and correct in all respects and that you will promptly notify Company in writing of any change to any such information.
5. Security Interest and Lien. Customer hereby grants a security interest in the Operating Account or any substitute account now and in the future and all proceeds thereof to Company to secure all amounts due in accordance with this Agreement. Customer shall provide such documentation as required by Company in connection with the security interest. Such security interest shall survive the termination of this Agreement until all amounts due are determined and paid in full. Customer shall cooperate with Company in perfecting such security interest.
6. Establishment of Reserve Account. We may temporarily suspend payouts of proceeds to you and/or designate an amount of funds that you must maintain in your Operating Account or in a separate reserve account (“Reserve Account”) to secure the performance of your obligations to us. We may require a Reserve Account to be maintained throughout the term of this Agreement and for a period of 180 days thereafter, for any reason, in whatever amounts we reasonably determine from time to time to cover potential losses to Company. If at any time you do not have sufficient funds in your Reserve Account as determined by us in our discretion, we may fund the Reserve Account from any funding source associated with the Services, including any funds (a) deposited by you, (B) due to you, or (c) available in your Operating Account. You authorize us to make any withdrawals on debits from the Reserve Account or your Operating Account, without prior notice to you, to fund the Reserve Account or collect amounts that you owe us. You may not make withdrawals from the Reserve Account without our written consent.
7. Set-Off Rights. To the extent permitted by law, we may set off against the proceeds for any obligation you owe us under any agreement with Company (e.g., Chargebacks or refunds). If you owe us an amount that exceeds your cumulative incoming proceeds, we may debit the Operating Account. Your failure to fully pay amounts that you owe us on demand will be a breach of these terms. You are liable for any of our costs associated with collection in addition to any amounts owed, including attorneys’ fees and expenses, collection agency fees, and any applicable interest.
8. Auditing and Credit Investigation. Customer authorizes Company or its agents to investigate the background and personal credit history of any of the entity, principals, beneficial owners, or other persons associated with Customer’s business from time to time and to obtain a business report on Customer’s business from Dunn & Bradstreet or any company providing a similar service. Company may terminate this Agreement if the information received in any investigation is unsatisfactory in Company’ sole discretion. Company may also audit from time to time Customer’s compliance with the terms of this Agreement. Customer shall provide all information requested by Company necessary to complete the audit. Upon Company’ request, Customer shall provide all of its books and records, including financial statements for Customer and personal financial statements for all guarantors. Customer authorizes Company to make on-site visits to any and all of the Customer’s locations with regard to all information necessary or pertinent to the Services.
9. Term. This Agreement shall become effective on the Effective Date, and, unless sooner terminated in accordance with this Agreement, shall remain in effect for a term of three (3) years (the “Initial Term”). At the end of the Initial Term, this Agreement shall renew automatically for successive terms of one year (each a “Renewal Term”), unless either Party provides written notice of termination 90 days prior to the then-current expiration date. The Initial Term and any Renewal Term shall be collectively referred to as the “Term”). All existing obligations, warranties, indemnities, and agreements with respect to Transactions entered into before such termination shall remain in full force and effect and Customer shall remain liable for all obligations incurred prior to the termination of this Agreement.
10. Termination of Services. Company may terminate your use of the Services and/or this Agreement at any time for any reason. Any termination of these terms does not relieve you of obligations to pay fees or costs accrued prior to termination, Chargebacks, and any other amounts owed to us as provided in this Agreement or any other agreement between you and Company. Any funds that we are holding in custody for you at the time of closure, less any applicable fees, will be paid out according to your payout schedule, subject to other conditions in this Agreement. If an investigation is pending at the time you close your Company account, we may hold your funds as described herein. If you are later determined to be entitled to some of the funds, we will release those holds for you.
11. Suspension of Services. Company may, in its sole discretion, suspend the Services at any time in its sole discretion upon notice to you. Company may selectively terminate one or more of Merchant’s approved customers or customer locations or certain Services, in whole or in part, without terminating this Agreement. Merchant’s obligations with respect to any Transaction shall be deemed incurred and existing on the posted transaction date of the Transaction.
12. Third Party Assessments. Notwithstanding any other provision of this Agreement, Customer shall be responsible for all fees, fines, assessments, penalties, loss allocations, costs of funds for advance settlements or delayed activities, and other amounts imposed or assessed to Customer, Company, Acquirer, or Bank in connection with this Agreement by third parties such as, but not limited to, Associations and third-party service providers (including telecommunication companies) to the extent that such amounts are not the direct result of the gross negligence or willful misconduct of Acquirer, Bank or Company as applicable.
13. Taxes, Information Filings and Backup Withholding. Customer agrees to pay all federal, state, and local sales, use, income, property and excise taxes, which may be assessed in connection with the Services and related products provided under this Agreement. Customer agrees and understands that Company or its designee will provide information reporting to the Internal Revenue Services and applicable state treasurers for all reportable payment transactions of Customer as defined in IRC § 6050W. If necessary, Company or its designee will conduct backup withholding on the revenue generated by such reportable payment transactions.
14. Bankruptcy. This Agreement constitutes an extension of financial accommodations by Company to Customer within the meaning of Section 365 of the Bankruptcy Code. The right of Customer to receive any amounts from Company hereunder is subject and subordinate to Chargebacks, Return Entries, recoupment, lien, set-off and security interest rights of Company regardless of whether they are liquidated, unliquidated, fixed, contingent, matured, or un-matured.
15. Fees and Charges. Customer agrees to pay all fees listed or described in this Agreement and the Application and Order Form (if applicable). Pass-through charges from third parties, including, but not limited to, Payment Card Processing assessments and interchange related Fees, may be changed by banks, Associations, processors or other third parties from time to time. Company will provide Customer with as much notice as is reasonably possible in the event of any such changes in pass-through charges. From time to time, Company may change all non-pass through rates, Fees and charges set forth in the Agreement. Company will provide a minimum of 30 days written notice to Customer of all amendments to non-pass through rates, Fees, and charges. Notice may be given on the Customer Statement. Should Company take any action against Customer to collect sums due hereunder, Customer agrees to pay all costs associated with such collection efforts, including but not limited to reasonable attorney’s fees. If Customer does not pay sums due to Company within thirty (30) days of the invoice date, Company may charge and Customer agrees to pay a late fee of 1.5% per month on the outstanding balance, or the highest amount allowed by law, whichever is less.
16. Return Entry Resulting From Debit Block. Customer will ensure that debits from its Operating Account for Fee Collection are not blocked if funds are not settled to Customer net of Company and third party fees. If a Return Entry results from such a debit block Customer will pay a debit block administration Fee as provided on the Application.
17. Non-Sufficient Funds (NSF). In the event an ACH Transaction is rejected as a result of Customer not having sufficient funds (NSF) in Customer’s Account, (i) Company may attempt to process the charge again within thirty (30) days and Customer agrees to pay a NSF Fee as identified in the Application for each processing attempt.
18. Amendment by Company. Company may amend or modify this Agreement and any such amendment or modification will be effective and binding on Customer upon notice. Customer’s continued use of Services after the effective date of any such amendment or modification shall signify Customer’s acceptance of, and agreement to, abide by the terms and conditions contained in any such amendment or modification.
19. Indemnification. Customer shall indemnify, defend, and hold harmless Company and its directors, officers, employees, affiliates and agents from and against all proceedings, claims, losses, damages, demands, liabilities and expenses whatsoever, including all reasonable legal and accounting fees and expenses and all reasonable collection costs, incurred by Company its directors, officers, employees, affiliates and agents resulting from or arising out of the Services in this Agreement, Customer’s payment activities, the business of Customer or its customers, any sales transaction acquired by Acquirer or Member Bank, any noncompliance with the Rules (or any rules or regulations promulgated by or in conjunction with the Associations) by Customer or its agents (including any TPSP), any issue, problems, or disputes between Acquirer and any Customer or customer of Customer, or Bank and Customer, any Data Incident (as defined below), any infiltration, hack, breach, or violation of the processing system of Customer, TPSP, or any other third party processor or system, or by reason of any breach or nonperformance of any provision of this Agreement, on the part of Customer, or its employees, agents, TPSPs, or customers. The indemnification obligations hereunder shall survive the termination of the Agreement.
“Data Incident” is defined as any alleged or actual compromise, unauthorized access, disclosure, theft, or unauthorized use of a Card or Cardholder information or ACH information, regardless of cause, including without limitation, a breach of or intrusion into any system, or failure, malfunction, inadequacy, or error affecting any server, wherever located, or hardware or software of any system, through which Card information resides, passes through, and/or could have been compromised.
20. Limitation of Liability. Neither Party shall be liable for lost profits (except as expressly provided otherwise herein), lost business or any incidental, special, consequential or punitive damages (whether arising out of circumstances known or foreseeable by the other Party) suffered by such Party, their customers or any third party in connection with the Services. However, nothing in the foregoing sentence is in any way intended, and shall not be construed, to limit (i) Customer’s obligation to pay any fees, assessments or penalties due under this Agreement, including but not limited to those imposed by telecommunications services providers, VISA, MasterCard and/or other Association(s); or (ii); Customer’s obligation to indemnify Company pursuant to this Agreement. In no event will Company be liable for any damages or losses (i) that are wholly or partially caused by Customer, or its employees, agents, or TPSPs. Further, Company shall not be liable to Customer or Customer’s customers or any other person for any of the following:
- Any loss caused by a Transaction downgrade resulting from defective or faulty software or equipment; or
- Any loss or liability resulting from the product or service of a third party.
21. Limitation of Damages. COMPANY SHALL NOT BE LIABLE FOR ANY PUNITIVE, INDIRECT, SPECIAL, OR CONSEQUENTIAL LOSSES OR DAMAGES TO CUSTOMER, CUSTOMER’S CUSTOMERS OR TO ANY THIRD PARTY IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE SERVICES TO BE PERFORMED BY COMPANY PURSUANT TO THIS AGREEMENT. IN NO CASE SHALL CUSTOMER BE ENTITLED TO RECOVER DAMAGES FROM COMPANY THAT EXCEED THE FEES RETAINED BY COMPANY FROM THIS AGREEMENT DURING THE ONE (1) MONTH PERIOD IMMEDIATELY PRIOR TO THE EVENT GIVING RISE TO THE CLAIM FOR DAMAGES.
22. Warranty Disclaimer. CUSTOMER ACKNOWLEDGES THAT COMPANY HAS NOT PROVIDED ANY WARRANTIES, EXPRESS OR IMPLIED, WRITTEN OR ORAL, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR PURPOSE WITH RESPECT TO THE SERVICES PROVIDED HEREIN. SHOULD THERE BE ERRORS, OMISSIONS, INTERRUPTIONS, OR DELAYS RESULTING FROM COMPANY’S PERFORMANCE OR FAILURE TO PERFORM OF ANY KIND, COMPANY’S LIABILITY SHALL BE LIMITED TO CORRECTING SUCH ERRORS, IF COMMERCIALLY REASONABLE. CUSTOMER HEREBY ACKNOWLEDGES THAT THERE ARE RISKS ASSOCIATED WITH THE ACCEPTANCE OF CARDS AND CUSTOMER HEREBY ASSUMES ALL SUCH RISKS EXCEPT AS MAY BE EXPRESSLY SET FORTH HEREIN.
24. Ownership. Customer acknowledges and agrees that all right, title and interest in and to Company Intellectual Property, shall be owned solely and exclusively by Company and that Company may use the Company Intellectual Property in any manner. Customer will only receive a right to access and use the Company Intellectual Property on the terms expressly set forth herein. Company expressly reserves all rights in the Company Intellectual Property not specifically granted to Customer, including any update, adaptation, translation, customization or derivative work thereof. Company alone shall own all rights title and interest in and to any suggestions, enhancements requests, feedback, or recommendations provided by Customer or a third party.
25. Customer Obligations. Customer represents and warrants that access to the Service will be solely by Authorized User IDs. Company may rely on any Authorized User ID, instruction or information that meets the Service’s automated criteria or which is believed by Company to be genuine. Company may assume a person entering an Authorized User ID and password is, in fact, that user, and the Service will be made available and respond accordingly. Company may assume that the latest email addresses and registration information on file with the Service are accurate and current unless Customer or an Authorized User has provided Company with notice of unauthorized use or potential unauthorized use as required in this Agreement, if applicable.
26. Prohibitions on Use. Customer shall not: (a) decompile, disassemble, reverse engineer or otherwise attempt to obtain or perceive the source code from which any software component of the Services are compiled or interpreted, and Customer acknowledges that nothing in this Agreement will be construed to grant Customer any right to obtain or use such code; (b) allow third parties other than Authorized Users to gain access to the Services; (c) use the Services to provide timesharing, subscription service, hosting, or outsourcing services; (d) knowingly introduce into the Service or Company’s systems any software, data or equipment having an adverse impact on the Service; or (e) extract content other than Customer Data from, or altering in any way the Service or its components or features, or using or accessing the Service except for the purposes specifically authorized in this Agreement or an Order Form. Customer shall ensure that it and its Authorized Users comply with the prohibitions and limitations of this Agreement and shall indemnify Company against any loss or damage resulting from any failure of Customer or its Authorized Users to so comply.
27. Statistical Data. Anonymous aggregated data may be used by Company (i) as necessary to perform the Company Services; (ii) to generate anonymous learnings, logs and data regarding the use of Company’s products, services and technologies, in order to improve such products, services and technologies, and to create and distribute reports and other materials that include or are based on anonymous aggregated data related to the provision of Services generally; and (iii) to analyze such anonymous aggregated data to provide insight to customers through Company’s services generally (“Insights”).
28. Business Directory.
- Customer hereby agrees and consents, on behalf of itself and all authorized employees and representatives of Customer, to the Company’s retention, assembly and use (subject to compliance with all applicable law) of (a) contact information, and (b) billing, payments, and remittance preference information supplied by Customer in connection with Customer’s use of the Services with respect to both (1) Customer, and (2) all Customer Business Partners (hereinafter defined) for purposes of inclusion into Company’s “Business Directory” of all businesses who have connected to the Company’s automated bill payment ecosystem, provided that all such contact information shall be kept confidential and shall not be disclosed by Company to any third party, other than subcontractors of the Company. As used herein, the term “Customer Business Partners” means any third party business entities in connection with whom Company has provided billing and/or payment processing Services on Customer’s behalf during the Term of this Agreement.
- If Customer elects to receive the eSolutions Package, Customer will receive a dedicated eSolutions team to help develop and execute plans to promote digital transformation of buyers’ payments. The eSolutions Package also includes: twelve (12) Months of eSolutions support, Metrics/reporting, Account Review, Goal Setting, On Demand eSolutions Training & Certification, six (6) Standard eSolutions Campaigns, Sample Inserts/Onserts, Best Practices, two (2) Custom email campaigns, Call Campaign (100 Print Customers), and Payment Issuer Communication.
29. Notice. Except for notices provided by Company to Customer on the Customer Statement, all notices, requests, demands or other instruments, which may be or are required to be given by any Party herein, shall be in writing and each shall be deemed to have been properly given (i) three Business Days after being sent by certified mail, return receipt requested or (ii) upon delivery by a nationally recognized overnight delivery service to the addresses listed herein for the respective Parties. Notices shall be addressed as follows: If to Company: Billtrust, Inc., 1009 Lenox Drive, Suite 101, Lawrenceville, New Jersey 08648, Attn: General Counsel. If to Customer: The address provided for in the Company Payments Application. Any Party may change the address to which subsequent notices are to be sent by notice to the other Parties given as set forth above in this Section.
- Rights to Dispute Charges; Reports; Invoices. You expressly agree that your failure to notify us that you have not received any settlement funds within three (3) business days from the date that settlement was due to occur, or fail to reject any report, notice, or invoice within thirty (30) business days from the date the report or invoice is made available to you, shall constitute your acceptance of the same. In the event you believe that Company has failed in any way to provide the Services, you agree to provide Company with written notice, specifically detailing any alleged failure, within sixty (60) days of the date on which the alleged failure first occurred.
- Review of Records; Investigations. You shall review your account Transaction records on a regular basis and notify Company immediately of and actual or suspected unauthorized activity through your account. Customer shall assist Company in any and all investigations of Transactions in a timely manner and will provide written reports of investigated transactions to Company upon Company’s request.
- Confidentiality. Neither Party shall disclose to any third Party the Confidential Information disclosed by the other Party and shall not use any such Confidential Information for any purpose other than the purpose for which it was originally disclosed to the receiving Party. Each Party agrees to treat Confidential Information with the same degree of care and security as it treats its most confidential information, but in no circumstance less than a reasonable degree of care. Each Party may disclose such Confidential Information to employees and agents who require such knowledge to perform services under this Agreement, provided that such employees and agents are subject to obligations of confidentiality in regards to the protection of the Confidential Information no less binding than those set forth herein. Confidential Information shall not include information that (i) is known to the receiving Party at the time it receives Confidential Information; (ii) has become publicly known through no wrongful act of the receiving Party; (iii) has been rightfully received by the receiving Party from a third Party authorized to make such communication without restriction; (iv) has been approved for release by written authorization of the disclosing Party; or (v) is required by law to be disclosed. Confidential Information shall include Personal Data. In the event either Party receives a subpoena or other validly issued administrative or judicial process requesting Confidential Information, the recipient shall promptly notify each other Party of such receipt and may, thereafter, comply with such subpoena or process to the extent permitted by law. The terms and conditions and fees associated with this Agreement are specifically included in the definition of Confidential Information. The obligations of the Parties under this Section will survive termination of this Agreement for whatever reason, and will bind the Parties, their successors and assigns.
- Independent Contractor. In the performance of its duties herein, each Party shall be an independent contractor, not an employee or agent of the other Party.
- Cooperation. In their dealings with one another, each Party agrees to act reasonably and in good faith and to fully cooperate with each other in order to facilitate and accomplish the matters contemplated by this Agreement.
- Entire Agreement. This Agreement supersedes any other agreement, whether written or oral, that may have been made or entered into by any Party (or by any officer or officers of any Party) relating to the matters covered herein and constitutes the entire agreement of the Parties hereto. In the event that there is a conflicting term between the Application and the Agreement, the terms of the Agreement supersedes the Application.
- Assignment. This Agreement may not be assigned by Customer without the prior written consent of Company. A change in control of Customer as a result of a sale, reorganization, merger or otherwise, shall be deemed an assignment and shall require the written consent of Company.
- Captions. Captions in this Agreement are for convenience of reference only and are not to be considered as defining or limiting in any way the scope or intent of the provisions of this Agreement.
- Governing Law, Arbitration. This Agreement shall be governed and construed in accordance with the laws of the State of Delaware without regard to its principles of conflict of laws. Any controversy or claim arising out of or relating to this contract, or the breach thereof, shall be settled by arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules. The number of arbitrators shall be one. The place of arbitration shall be in New Jersey. Judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction thereof.
- Power of Attorney. Customer appoints Company as its attorney-in-fact to execute such documents as necessary or desirable to accomplish perfection of any security interests. The appointment is coupled with an interest and shall be irrevocable as long as Customer owes any amount to Company.
- Attorneys’ Fees. If Company takes legal action against Customer for any amounts due to Company or if Customer is required to indemnify Company pursuant to this Agreement, Customer shall pay reasonable costs and attorneys’ fees incurred by Company whether suit is commenced or not. Attorneys’ fees are due whether or not an attorney is an employee of Company or its affiliates.
- Setoff. In addition to any other legal or equitable remedy available to it in accordance with this Agreement or by law, Company may set off any amounts due to Company under this Agreement against (i) any amounts which Company would otherwise deposit to the Operating Account, (ii) any other amounts Company may owe Customer under this Agreement, or (iii) against any property of Customer in the possession or control of Company.
- No Waiver. Any delay, waiver, or omission by a Party to exercise any right or power arising from any breach or default of the other Party in any of the terms, provisions or covenants of this Agreement shall not be construed to be a waiver of any subsequent breach or default of the same or any other terms, provisions or covenants on the part of the Party. Any waiver shall not be deemed to modify any of the terms of the Agreement. All remedies afforded by this Agreement for a breach hereof shall be cumulative.
- Bankruptcy. Customer shall notify Company within five days upon filing of voluntary or involuntary bankruptcy proceedings by or against Customer. The Parties acknowledge that this Agreement constitutes an extension of financial accommodations by Company to Customer within the meaning of Section 365 of the Bankruptcy Code. The right of Customer to receive any amounts due from Company hereunder is expressly subject and subordinate to Chargebacks, Return Entries, recoupment, lien, set-off and security interest rights of Company regardless of whether such Chargebacks, Return Entries, recoupment, lien, set-off and security interest rights are claims that are liquidated, unliquidated, fixed, contingent, matured, or un-matured.
- Compliance with Laws. Customer represents and warrants that it has obtained all necessary regulatory approvals, certificates and licenses to provide any services it intends to offer and that it is in compliance with the regulations of the Federal Trade Commission and the Federal Communications Commission and shall comply with all present and future federal, state and local laws and regulations of the United States pertaining to Transactions, including, without limitation, the Federal Fair Credit Reporting Act, the Federal Truth-in-Lending Act, the Electronic Fund Transfers Act, the Federal Equal Credit Opportunity Act, as amended, and the Telephone Disclosure and Dispute Resolution Act, the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), the Standards for Privacy of Individually Identifiable Health Information (the “Privacy Rule”) and the Standards for Security of Electronic Protected Health Information (the “Security Rule”) promulgated thereunder, the Health Information Technology for Economic and Clinical Health Act (Division A, Title XIII and Division B, Title IV, of the American Recovery and Reinvestment Act of 2009, Pub. L. 111-5) (the “HITECH Act”) and the regulations implementing the HITECH Act, as applicable.
- Survival. In the event of termination, all obligations of Customer incurred or existing under this Agreement prior to termination shall survive the termination.
- Force Majeure. Company shall be excused from performing any of its obligations under this Agreement that are prevented or delayed by any occurrence not within Company’s control including, but not limited to, strikes or other labor matters, destruction of or damage to any building, natural disasters, pandemics, accidents, war, riots, emergency conditions, interruption of transmission or communications facilities, equipment failure, or any regulation, rule, law, ordinance or order of any federal, state or local government authority.
- Severability. If any provisions of this Agreement shall be held, or deemed to be, or shall, in fact, be, inoperative or unenforceable as applied in any particular situation, such circumstance shall not have the effect of rendering any other provision or provisions herein contained invalid, inoperative, or unenforceable to any extent whatsoever. The invalidity of any one or more phrases, sentences, clauses or sections herein contained shall not affect the remaining portions of this Agreement or any part hereof. It is the Parties’ desire that if any provision of this Agreement is determined to be ambiguous, then the rule of construction that such provision is to be construed against its drafter shall not apply to the interpretation of the provision.
APPENDIX I TO AGREEMENT
“ACH” means the Automated Clearing House.
“Account” means a demand deposit account or other deposit account Company or Customer has with a financial institution that is permitted to be linked to a Service.
“Acquirer” shall mean WorldPay, or other acquirer contracted with Company, which is the entity contracted by Company to submit sales drafts and transaction information to the Associations on behalf of Company and to receive and pay to Company settlement funding for such sales transactions.
“Address Verification” means a service that allows Customer to verify Cardholder’s billing address with Issuer.
“Associations” means MasterCard International Inc., VISA U.S.A. Inc., Discover, and certain similar entities approved by Company, Bank, and Acquirer.
“Authorization” means an affirmative response by or on behalf of an Issuer, to Customer’s request to affect a Card Transaction, that a Card Transaction is within the Cardholder’s available credit limit and that the Cardholder has not reported the Card lost or stolen. All Card Transactions require Authorization.
“Authorized User” means one of Customer’s employees, representatives, consultants, contractors or agents and any other person expressly authorized by Customer in connection with Customer’s business affairs to use the Service and who have been provided with their own unique Authorized User identification and password by Customer (or by Company at Customer’s request).
“Bank” shall mean Fifth Third Bank, or other bank selected by Company, which is the financial institution contracted through Processor that is a member of the Associations and provides Association sponsorship for card transactions submitted by Company for processing.
“Business Day” means any day other than: Saturday or Sunday; or a day on which banking institutions in Arizona are authorized by law or executive order to be closed; or a day on which the Federal Reserve Bank is closed.
“Card(s)” means a Visa, MasterCard, American Express or Discover Network credit card or debit card, and other such cards accepted by Company, Bank, and Acquirer.
“Card-Not-Present” means transactions that are not Card-Present Transactions.
“Card-Present Transaction” means a Card Transaction in which the Card is swiped through a terminal, register or other device, capturing the Card information encoded on the magnetic strip or Chip.
“Cardholder” means a person authorized to use a Card.
“Chargeback” means a Card Transaction that Company returns to Customer pursuant to this Agreement.
“Company Intellectual Property” means all right, title and interest including any copyright, trademark, patent, trade secret or similar right in and to: (a) the Services, including the software applications, processes, infrastructure, designs, documentation, policies, procedures training materials, and other components used to deliver the Service; (b) any developments created during the provision of Services; (c) any templates, maps, routines, insights, system interaction output, operational efficiencies and the like related to the Services developed with or without Customer input; and (d) any update, adaptation, translation, customization or derivative work of all of the above.
“Customer Data” means any data that any Authorized User loads or enters into the Service. Customer Data includes “Personal Data,” which is any information relating to an identified or identifiable natural person.
“Application” means the document by which Customer applies to participate in Transactions using our products and services.
“CVV/CID” means a service that allows Customer to verify Cardholder’s possession of Card through the identification of unique digits on Card.
“Electronic Funds Transfer Act” means the law passed by the US congress in 1978, which set out the rights and obligations of consumers and their financial institutions regarding the use of electronic systems to transfer funds.
“Fees” means any amounts to be paid by Customer in connection with any Transaction as set forth in the Order Form, Application or otherwise in this Agreement, including but not limited to an amount equal to a specified percentage of the total cash price of each draft, a specified amount per Card Transaction, any processing fees collected from cardholder (convenience fee and or payment plan setup fees) and additional fees such as a monthly terminal fee, monthly statement fee, and installation fees, and any fees, charges, or penalties assessed against Company as applicable, by any Association, Issuer, Acquirer, Bank, or any other third party.
“Forced Sale” means a Card Transaction processed without an approved electronic authorization number being obtained for the full amount of the sales Transaction at the time the Transaction is processed.
“Issuer” means an Association member that issued a Card to a Cardholder.
“IVR” means interactive voice response unit used for an Authorization.
“Member Bank” shall collectively refer to Acquirer and Bank.
“Operating Account” means the demand deposit account(s) established by Customer at a financial institution(s) for processing Fees, charges and credits under this Agreement.
“Order Form” means any form that Customer and Company execute for the purpose of ordering Services.
“Party” means the Customer or the Company and “Parties” means the Customer and the Company.
“Password” means confidential, unique personal numbers, codes, marks, signs, public keys, or other information composed of a string of characters used as a means of authenticating and accessing a Service.
“Payment Card Processing” means the acceptance of a Card or information embossed on the Card for payment for goods sold and/or leased or services provided to Cardholders by Customer and receipt of payment from Company whether the transaction is approved, declined, or processed as a Forced Sale.
“Payor” means a person authorized to use a Card or pay by ACH.
“Pre-Authorized Recurring Order Transactions” means Transactions which have been pre-authorized by the Cardholder and for which the goods or services are to be delivered or performed in the future by Customer without having to obtain approval from the Cardholder each time.
“Regulation E” means the regulation published by the “Federal Reserve.”
“Rules” means the by-laws, operating regulations and/or all other rules, guidelines, policies and procedures of VISA, MasterCard, Discover, American Express and/or other networks (which are available on websites such as http://usa.visa.com/merchants/, http://www.mastercard.com/us/merchant/ and http://www.discovernetwork.com/merchants/), and all other applicable rules, regulations and requirements of Member Bank, Company providers, banks, institutions, organizations, associations, or networks which govern or affect any services provided under this Agreement, and all state and federal laws, rules and regulations which govern or otherwise affect the activities of Customer, including, but not limited to, the Federal Trade Commission (“FTC”), as any or all of the foregoing may be amended and in effect from time to time, and the regulations and requirements of Member Bank or Company.
“Security Procedures” means, unless Company and Customer agree otherwise, the security requirements and procedure necessary to verify the authenticity of Entries.
“Services” means the Card Services as defined in Appendix II.
“Customer Statement” means a statement of all charges and credits to the Operating Account.
“Transaction” means a transaction in connection with which payment is made via ACH (a Card (a “Card Transaction”). Transaction also includes credits and voids.
APPENDIX II TO AGREEMENT
BPN Card Processing Services
If included in the Services, Company shall provide, and Customer shall receive, the services described in this Appendix II (the “Card Services”). Customer agrees that pursuant to any such Card Services it will be receiving under the terms of the Agreement it will also be bound by the terms and conditions of this Appendix II.
- COMPANY OBLIGATIONS AND REQUIREMENTS.
- Card Services. Company will provide Customer the Card Services indicated on the Application, as it may be amended. Company may at any time impose limits on the dollar volume of daily, weekly, or monthly Card Transactions and dollar limits per Card Transaction. Company may reject attempted Card Transactions at the sole discretion of Company, Bank or Acquirer. Customer shall use the Card Services only for the goods or services set forth in the Application. Customer shall immediately notify Company if it has or will probably have annual Card sales volume greater than $1 million for any Association or $2 million total.
- Electronically Transmitted Transactions. Company will pay Customer by a credit to an Operating Account using one or more settlement methods at its discretion, including, without limitation, next day funding and 2-3 business days funding. The payment will equal the sum of Card Transactions processed since the previous credit, net of processed refunds or credits. If Customer elects to pay Company and third party fees through deductions to Customer settlements, all fees, including refunds and credits will be netted from settlements directed by Company to the Customer’s Operating Account.
- Provisional Credit. Any credits to the Operating Account are provisional only and subject to revocation and recovery by Company until the Card Transaction is final and no longer subject to chargeback by the Issuer, Cardholder, or Associations.
- Customer Statement. Company shall make available a Customer Statement on no less than a monthly basis by any reasonable means in Company’s sole discretion. The Customer Statement shall be deemed accurate and affirmed by Customer in all respects except for any items that Customer specifically disputes in written notice provided within twenty (20) days after the Customer Statement became available to Customer.
- Chargebacks. Company is not in any way responsible for Chargebacks or any related Fees. Company may chargeback to Customer and recover by any means any Card Transactions and any Chargeback Fees charged by Company, as well as any Association fine or assessment, for any reason.
- CUSTOMER OBLIGATIONS AND REQUIREMENTS.
- Adjustments and Returns. Customer will maintain a fair exchange and return policy and make adjustments with respect to goods and services sold or leased to its customers whenever appropriate. If any charges are written off or cancelled, or any price is adjusted on a Card Transaction, Customer will transmit a credit or return Card Transaction. If the credit or return transactions in any day exceeded the amount of sales draft transactions, Company shall charge the Operating Account for the excess. Customer shall make no cash refunds on Card Transactions and shall handle all credit adjustments as provided in this Section. Sales drafts for nonrefundable Card Transaction must be conspicuously marked as a “final sale” and “no returns” on the customer’s copy of the sales draft. All Customers must notify Cardholders in writing of the applicable reservation/no show policy on all advance reservations. The Cardholder must be notified of the exact number of days required for reservation deposit refunds.
- Customer Complaints. Customer shall respond promptly to inquiries from Cardholders and shall resolve any disputes amicably. Customer will ensure that the Cardholder understands who is responsible for delivery of products (whether physical or digital), provision of services, customer service and all other obligations based on the Card Transaction. Company may charge Customer reasonable Fees and reimbursement, in addition to any applicable Association Fees or charges, for excessive Cardholder inquiries, refunds, or Chargebacks. Customer will maintain the following information in writing for each claim or defense asserted by a Cardholder:
- The Cardholder’s name;
- A unique identifier to reference the transaction in communications with Company;
- The date and time the Cardholder asserted the claim or defense;
- The nature of the claim or defense; and
- Any action that Customer took in an attempt to resolve the dispute.
Upon request, Customer shall furnish Company with this information in writing within ten (10) days.
- Record Retention. Customer shall retain all original sales drafts or legible microfilm or electronic copies of all sales drafts and Transaction records for at least three years.
- Each Card Transaction is genuine and arises from a bona fide transaction by the Cardholder directly with you;
- Each Card Transaction represents a valid and enforceable obligation for the amount shown on the sales draft and does not involve the use of a Card for any other purpose;
- Each Card Transaction represents an obligation of the Cardholder for the amount thereof;
- No Card Transaction is subject to any dispute, set off or counterclaim;
- Cardholder will not be required, as a condition to initiating a Card Transaction, to waive rights to dispute such Card Transaction;
- Each Card Transaction amount is only for merchandise or services (including taxes, but without any surcharge) sold, leased, or rented to a Cardholder by you and, except for any delayed delivery or advance deposit transactions authorized by this Agreement, that merchandise or service was actually delivered to or performed for the Cardholder when that Card Transaction was submitted for processing;
- No sales draft has any alteration not authorized by the Cardholder.
- All information and data you provide to us, or for which you engage a third party to provide to us, is complete, truthful, accurate, valid, your lawful property, and you have the right to communicate such information.
- You will not engage in any acceptance practice or procedure that discriminates against, or discourages the use of, any particular card type elected by you and approved by us, in favor of any competing card brand also elected and approved.
- You will honor all cards within the card types accepted and approved in accordance with this Agreement.
- You and your third-party service providers are legally authorized to sell any product or services offered and have obtained all necessary regulatory approvals and certificates (hereafter, “Certificates”). You will provide us any copies of Certificates immediately upon receipt of our request.
- Use of Marks. Merchant will display prominently at its place of business, where payments are accepted for card present transactions, Card emblems and other promotional material and literature provided by Company. Subject to the prior written consent of Company and upon such conditions as are imposed by Company, Customer may use Card service marks or design marks in its advertisement and promotional materials.
- Payment Card Industry Security Requirements. Customer represents and warrants that it is, and will remain compliant with the Payment Card Industry Data Security Standard (“PCI-DSS”) during the Term of this Agreement. Customer agrees to provide Company with a current copy of its PCI AOC (Attestation of Compliance or appropriate PCI Self SAQ (Self-Assessment Questionnaire) the earlier of (a) ninety (90) days from go live, or (b) ninety (90) days from Customer’s first payment of the Services. Information regarding such standards can be obtained at www.visa.com/cisp and www.pcisecuritystandards.org.
- Security Breaches. You will immediately notify us of any suspected, alleged, or confirmed compromised data (“Compromised Data Event”), regardless of the source, including any from any of your third-party service providers. We or servicers may engage a forensic vendor approved by an Association. You must cooperate with the forensic vendor so that it may immediately conduct an examination of your equipment, systems, and your third-party service providers’ procedures and records and issue a written report of its findings. Upon your discovery of any suspected or actual Compromised Data Event, you will not alter or destroy any related records. You will maintain complete and accurate documentation regarding any modifications made to the records. You will share with us and our servicers information related to your or any Associations’ investigation related to any actual or suspected Compromised Data Event (including, but not limited to, forensic reports and systems audits), and we and our servicers may share that information with Associations. Upon notice to you, we or our servicers, or the respective representatives of each may conduct remote electronic scans of your systems to confirm compliance with the requirements of the Associations and applicable laws. You must promptly cooperate with any such parties to facilitate the scans.
- Customer is responsible for the security of Cardholder data.
- Customer and each payment card brand have ownership of Cardholder data and may use such data ONLY for assisting these parties in the completion of Payment Card Processing Transactions, supporting a loyalty program, providing fraud control services, or for other uses specifically required by law.
- In the event this Agreement is terminated by either of the Parties, each Party agrees to continue to treat account holder data as confidential.
- Customer must immediately notify Visa USA Risk Management, through its acquirer, of the use of a Customer Servicer, and ensure the Customer Servicer implements and maintains all of the security requirements, as specified in the Rules.
- Web Site Requirements for E-Commerce Customers. A web site operated by the Customer that accepts Card Transactions must contain all of the following information:
- Complete description of the services offered;
- Return merchandise and refund policy, which includes the communication of the return policy during the order process and the requirement that the cardholder must be allowed to select a “click to accept” option or other affirmative button to acknowledge the policy;
- Terms and conditions must be displayed on the same screen view as the Company screen used to present the total purchase amount or within the sequence of web pages the cardholder accesses during the purchase process;
- Customer service contact including e-mail address or telephone number;
- Transaction currency;
- Export or legal restrictions;
- Delivery policy;
- The security method offered for transmission of payment data such as Secure Sockets Layer or 3-D Secure; and
- Address of the Customer outlet’s permanent establishment, including the Customer outlet country.
The above information must be provided either (i) on the same screen view as the Company screen used to present the total purchase amount or (ii) within the sequence of web pages the Cardholder accesses during the purchase process.
- Third Party Service Providers. Customer will not use any suppliers and/or third party service providers (“TPSP’s”) unless they comply with PCI and/or the Payment Application Data Security Standard (“PA-DSS”), depending on the type of TPSP, as required by the Rules. Customer shall cause its TPSP to complete any steps or certifications required by any Association (e.g., registrations, PA-DSS, PCI, audits, etc) and to cooperate with Acquirer in completing any such steps or certifications (if applicable), and in performing any necessary due diligence on such TPSP. Customer shall be solely responsible for any and all applicable Fees, costs, expenses and liabilities associated with such steps, registrations and certifications. Neither Acquirer, nor Bank, nor Company shall in any event be liable to Customer or any third party for any actions or inactions of any TPSP used by Customer, even if Acquirer, Bank or Company introduced or recommended such TPSP.
Company may terminate this Agreement, or any or all of the Services provided hereunder, immediately in any of the following circumstances:
- Chargebacks in excess of Association monitoring guidelines;
- Customer’s percentage of error Card Transactions or retrieval requests is excessive in the opinion of Company; or
- Customer appears on the Association Terminated Merchant File.
- INDEMNIFICATION AND LIABILITY.
- Indemnification. In addition to any other indemnification obligations under this Agreement, Merchant shall indemnify and hold Company and Member Bank harmless from all losses, claims, damages, liabilities and expenses, including reasonable attorneys’ fees and costs arising out of any of the following:
- Card-Not-Present Transactions;
- Unauthorized Payment Card Processing Transactions;
- Prohibited Payment Card Processing Transactions;
- Authorizations; or
- Accuracy and completeness of Customer data and Transactions.
- Limitation of Liability. In addition to any other limitations of liability in this Agreement, Company and Member Bank shall not be liable to Merchant or Merchant’s customers or any other person for any loss or liability resulting from the denial of credit to any person or Merchant’s retention of any Card or any attempt to do so.
- Indemnification. In addition to any other indemnification obligations under this Agreement, Merchant shall indemnify and hold Company and Member Bank harmless from all losses, claims, damages, liabilities and expenses, including reasonable attorneys’ fees and costs arising out of any of the following:
- AUDITS. At any reasonable time (during normal business hours) upon reasonable notice to you, you shall allow auditors, including the auditors of any Association or any third party designated by Company Member Bank, or the applicable Association, to review the files held and the procedures followed by you at any or all of your offices or places of business. You agree that the cost of such audit shall be borne by you. You shall assist such auditors as may be necessary for them to complete their audit. In the event that a third-party audit is required by an Association, Member Bank or regulatory agency, and/or required by the Rules or applicable law, Company may, at its option, and at Customer’s sole expense, either retain a third party to perform the audit, or require that Customer directly retain a specific third party auditor. If Company requires that Customer directly retain the auditor, Customer shall promptly arrange for such audit to be performed, and will provide Company, Member Bank, and the Associations with a copy of any final audit report.
- COLLECTION AND USE OF CARD TRANSACTION INFORMATION.
- Documenting Card Transactions. Merchant shall submit the following information to Company in connection with Transaction processing:
- The DBA name of Merchant, name of Merchant and Merchant’s address;
- Merchant customer service telephone number;
- Merchant Internet address;
- Merchant Number assigned by Member Bank;
- The Card account number, validation date and/or expiration date of the Card, if one appears on the Card;
- Name, address and telephone number of Cardholder; and
- Such additional information as may be required by Company or Member Bank and/or the Associations, from time to time.
- Documenting Card Transactions. Merchant shall submit the following information to Company in connection with Transaction processing:
Merchant shall not submit a Card Transaction (electronically or otherwise) until Merchant has performed its obligations to the Cardholder in connection with the Card Transaction or obtained Cardholder’s consent for a Pre-Authorized Recurring Order Transaction. Merchant must not transmit a Card Transaction that Merchant knows or should have known to be fraudulent or not authorized by the Cardholder. Merchant is responsible for its employees’ actions. Merchant may transmit a Card Transaction that effects a prepayment for services or full prepayment of custom-ordered merchandise if Merchant advises Cardholder of the immediate billing at the time of the Card Transaction and within time limits established by the Associations.
- Authorization for Payment Card Processing Transactions. Merchant shall obtain Authorization for Payment Card Processing Transactions as follows:
- Electronically Transmitted Transaction. Customer shall submit each Card Transaction for Authorization to Company’s designated authorization center, which shall respond with the Issuer’s authorization or rejection of the Card Transaction and shall capture and process for Customer the information relating to the Card Transaction.
- Card-Present Transactions. If a terminal or software application is inoperable at the time of an Authorization request for a Card-Present Transaction, the Card Transaction may be manually authorized by entering it as a Forced Sale, provided the approval number is also entered, and Customer shall be subject to an additional IVR authorization Fee as outlined in the Application.
- Card-Not-Present Transactions. The following additional requirements apply to Card-Not-Present Transactions:
- All Card-Not-Present Transactions are at Customer’s risk. As to each Card-Not-Present Transaction, Customer warrants to Company that the person whose name is submitted as Cardholder either made or authorized another to make the purchase;
- All Card-Not-Present Transactions must be electronically authorized;
- Customer may accept a Pre-Authorized Recurring Order Transaction only if the Cardholder executes and delivers to Customer a written request therefor, which shall be maintained by Customer and made available upon request to Company. All annual billings must be reaffirmed at least once a year. Customer shall not deliver goods or perform services covered by a Pre-Authorized Recurring Order Transaction after receiving notification from the Cardholder that the pre-authorization is cancelled or from Company that the Card covering the Pre-Authorized Recurring Order Transaction is not to be honored; and
- Customer shall verify Cardholder’s address through the Association network and only accept as approved those Card Transactions receiving at least a partial match or system unavailable response.
- Prohibited Card Transactions. Customer shall not do any of the following with respect to any Card Transaction:
- Establish a minimum below the amount allowed by the Associations; provided, however, you may establish a minimum transaction amount as a condition for honoring Cards, provided that the minimum transaction amount does not differentiate between Associations and/or issuers and the minimum transaction amount does not exceed $10.00 (or any higher amount established by applicable law or the Rules).
- Establish a maximum sale amount as a condition for honoring Cards; provided, however, you may establish a maximum sale amount as a condition for honoring Cards if you are a department, agency or instrumentality of the U.S. Government, you are a corporation owned or controlled by the U.S. Government, or your primary business is reflected by one of the following MCCs: 8220 (Colleges, Universities, Professional Schools and Junior Colleges), 8244 (Schools, Business and Secretarial), or 8249 (Schools, Trade and Vocational), provided that the maximum transaction amount does not differentiate between Associations and/or issuers.
- Use Merchant’s own Card, or one to which Merchant has access, to process a Card Transaction for the purpose of obtaining credit for Merchant’s own benefit;
- Initiate a Card Transaction credit without a balance in the Operating Account equal to or greater than the credit;
- Disburse funds in the form of cash.
- Accept a Card to collect or refinance an existing debt;
- Issue a Card Transaction credit for return goods or services acquired in a cash transaction;
- Make any cash refund to a Cardholder who has made a purchase with a Card. All Card Transaction credits will be issued to the same Card account number as the sale;
- Charge any fee or impose any surcharge contrary to the Rules.
- Disclosure and Storage of Card Transaction Information.
- A Merchant must not disclose a Card account number, personal information, or other Card Transaction information to third Parties other than to Company or Merchant Services or Member Bank for the sole purpose of:
- Assisting the Merchant in completing the transaction; or
- As specifically required by law.
- A Merchant must store all material containing Card account numbers or imprints (such as transaction receipts, car rental agreements and carbons) in an area limited to selected personnel and render all data unreadable prior to discarding. A Merchant must not do any of the following:
- Retain or store full contents of any track on the magnetic stripe subsequent to a Card Transaction;
- Retain or store CVV/CID data subsequent to Authorization of a Card Transaction; and
- Request the CVV/CID data on any paper form.
- Sell or disclose cardholder account numbers, personal information, or other Card Transaction information.
- Use and Disclosure of BIN Information. A Merchant that receives BIN information from Company or Member Bank must not use such information for any reason other than to identify Visa debit category products at the point of sale, unless authorized by Visa.
- A Merchant must not disclose a Card account number, personal information, or other Card Transaction information to third Parties other than to Company or Merchant Services or Member Bank for the sole purpose of:
- AMENDMENTS TO CARDS AND/OR CARD SERVICES.
Amendments to Cards and/or Card Services. Company or Member Bank may amend or delete Cards or Card Services listed in the Application by notifying Merchant in writing. All provisions of this Agreement shall apply to Cards or Card Services added to this Agreement. Company shall notify Merchant of the Fees to be charged for processing the additional Cards and Card Services. Acceptance by Merchant of a new approved Card as payment for a Card Transaction or continued use of Payment Card Processing Service after Company or Member Bank has sent Merchant notice of an amendment shall constitute Merchant’s agreement to the amendment and the Fees or charges related to these additions.
APPENDIX III TO AGREEMENT
MERCHANT SERVICES AGREEMENT FOR CUSTOMERS
This MERCHANT SERVICES AGREEMENT FOR CUSTOMERS (“SUBMERCHANTS”) (“Sub-Merchant Agreement”) is made among WORLDPAY, LLC, having its principal office at 8500 Governors Hill Drive, Symmes Township, OH 45249-1384 and its designated Member Bank (collectively “Acquirer”) and Customer (“Customer” or “Sub-merchant”) in connection with the agreement between Sub-merchant and FACTOR SYSTEMS, LLC DBA: Billtrust (“Provider”). Acquirer will provide Sub-merchant with certain payment processing services (“Services”) in accordance with the terms of this Sub-Merchant Agreement. In consideration of Sub-merchant’s receipt of credit or debit card funded payments, and participation in programs affiliated with Mastercard International Inc. (“Mastercard”), VISA U.S.A. Inc. (“VISA”), Discover (“Discover”), and certain similar entities (collectively, “Associations), Sub-merchant is required to comply with the Operating Regulations (defined below) as they pertain to applicable credit and debit card payments. In addition, if Sub-merchant meets certain requirements under the Operating Regulations or an Association or the Operating Regulations otherwise require, Sub-merchant may be required to enter into a direct relationship with an entity that is a member of the Associations. By executing this Sub-Merchant Agreement, Sub-merchant has fulfilled such requirement. However, Acquirer understands that Sub-merchant may have contracted with Provider to obtain certain processing services and that Provider may have agreed to be responsible to Sub-merchant for all or part of Sub-merchant’s obligations contained herein.
NOW, THEREFORE, in consideration of the foregoing recitals and of the mutual promises contained herein, the parties agree as follows:
1. Certain Sub-merchant Responsibilities. Sub-merchant agrees to comply, and to cause third parties acting as Sub-merchant’s agent (“Agents”) to comply, with the Association’s and other payment network’s by-laws, operating regulations and/or all other rules, policies and procedures, including but not limited to the Payment Card Industry Data Security Standard, the VISA Cardholder Information Security Program, the Mastercard Site Data Protection Program, and any other program or requirement that may be published and/or mandated by the Associations or payment networks (collectively “Operating Regulations”). Sub-merchant may review the VISA, Mastercard, and Discover websites for a copy of the Visa, Mastercard and Discover regulations. The websites are: https://usa.visa.com/support/small-business/regulations-fees.html and http://www.mastercard.com/us/merchant/ and http://www.discovernetwork.com/merchants/. Sub-merchant also agrees to comply with all applicable state, federal, and local laws, rules, and regulations (“Laws”). Without limiting the foregoing, Sub-merchant agrees that it will fully comply with any and all anti-money laundering laws and regulations, including but not limited to the USA PATRIOT Act, the Bank Secrecy Act, the Federal Trade Commission and obligations imposed by the US Treasury’s Office of Foreign Assets Control (OFAC). For purposes of this section, Agents include, but are not limited to, Sub-merchant’s software providers and/or equipment providers.
If appropriately indicated in Sub-merchant’s agreement with Provider, Sub-merchant may be a limited-acceptance merchant, which means that Sub-merchant has elected to accept only certain Visa and Mastercard card types (i.e., consumer credit, consumer debit, and commercial cards) and Sub-merchant must display appropriate signage to indicate the same. Acquirer has no obligation other than those expressly provided under the Operating Regulations and applicable law as they may relate to limited acceptance. Sub-merchant, and not Acquirer, will be solely responsible for the implementation of its decision for limited acceptance, including but not limited to policing the card type(s) accepted at the point of sale.
Sub-merchant shall only complete sales transactions produced as the direct result of bona fide sale made by Sub-merchant to cardholders, and is expressly prohibited from presenting sales transactions which are produced as a result of sales made by any person or entity other than Sub-merchant, or for any purposes related to any illegal or prohibited activity, including but not limited to money-laundering or financing of terrorist activities.
Sub-merchant may set a minimum transaction amount to accept a card that provides access to a credit account, under the following conditions: i) the minimum transaction amount does not differentiate between card issuers; ii) the minimum transaction amount does not differentiate between Mastercard, Visa, or any other acceptance brand; and iii) the minimum transaction amount does not exceed ten dollars (or any higher amount established by the Federal Reserve). Sub-merchant may set a maximum transaction amount to accept a card that provides access to a credit account, under the following conditions: Sub-merchant is a i) department, agency or instrumentality of the U.S. government; ii) corporation owned or controlled by the U.S. government; or iii) Sub-merchant whose primary business is reflected by one of the following MCCs: 8220, 8244, 8249 – Schools, Trade or Vocational; and the maximum transaction amount does not differentiate between Mastercard, Visa, or any other acceptance brand.
2. Sub-merchant Prohibitions. Sub-merchant must not i) require a cardholder to complete a postcard or similar device that includes the cardholder’s account number, card expiration date, signature, or any other card account data in plain view when mailed; ii) add any tax to transactions, unless applicable law expressly requires that a Sub-merchant impose a tax (Any tax amount, if allowed, must be included in the transaction amount and not collected separately); iii) request or use an account number for any purpose other than as payment for its goods or services; iv) disburse funds in the form of travelers checks if the sole purpose is to allow the cardholder to make a cash purchase of goods or services from Sub-merchant; v) disburse funds in the form of cash unless Sub-merchant is dispensing funds in the form of travelers checks, TravelMoney cards, or foreign currency (in such case, the transaction amount is limited to the value of the travelers checks, TravelMoney cards, or foreign currency, plus any commission or fee charged by the Sub-merchant), or Sub-merchant is participating in a cash back service; vi) submit any transaction receipt for a transaction that was previously charged back to the Acquirer and subsequently returned to Sub-merchant, irrespective of cardholder approval; vii) accept a Visa consumer credit card or commercial Visa product issued by a U.S. issuer to collect or refinance an existing debt; viii) accept a card to collect or refinance an existing debt that has been deemed uncollectable; or ix) submit a transaction that represents collection of a dishonored check. Sub-merchant further agrees that, under no circumstance, will Sub-merchant store cardholder data in violation of the Laws or the Operating Regulations including but not limited to the storage of track-2 data. Neither Sub-merchant nor its Agent shall retain or store magnetic-stripe data subsequent to the authorization of a sales transaction.
3. Settlement. Upon receipt of Sub-merchant’s sales data for card transactions, Acquirer will process Sub-merchant’s sales data to facilitate the funds transfer between the various Associations and Sub-merchant. After Acquirer receives credit for such sales data, subject to the terms set forth herein, Acquirer will fund Sub-merchant, either directly to the Sub-merchant-Owned Designated Account or through Provider to an account designated by Provider (“Provider Designated Account”), at Acquirer’s discretion, for such card transactions. Sub-merchant agrees that the deposit of funds to the Provider Designated Account shall discharge Acquirer of its settlement obligation to Sub-merchant, and that any dispute regarding the receipt or amount of settlement shall be between Provider and Sub-merchant. Acquirer will debit the Provider Designated Account for funds owed to Acquirer as a result of the Services provided hereunder, provided that Acquirer may also debit Sub-merchant’s designated demand deposit account (“Sub-merchant-Owned Designated Account”) upon receipt of such account information from Sub-merchant or Provider, or if Acquirer deposits settlement funds into the Sub-merchant-Owned Designated Account. Further, if a cardholder disputes a transaction, if a transaction is charged back for any reason, or if Acquirer reasonably believes a transaction is unauthorized or otherwise unacceptable, the amount of such transaction may be charged back and debited from Sub-merchant or Provider.
4. Term and Termination. This Sub-Merchant Agreement shall be binding upon Sub-merchant upon Sub-merchant’s execution. The term of this Sub-Merchant Agreement shall begin, and the terms of the Sub-Merchant Agreement shall be deemed accepted and binding upon Acquirer, on the date Acquirer accepts this Sub-Merchant Agreement by issuing a merchant identification number, and shall be coterminous with Provider’s agreement with Sub-merchant.
Notwithstanding the foregoing, Acquirer may immediately cease providing Services and/or terminate this Agreement without notice if (i) Sub-merchant or Provider fails to pay any amount to Acquirer when due, (ii) in Acquirer’s opinion, provision of a service to Sub-merchant or Provider may be a violation of the Operating Regulations or any Laws, (iii) Acquirer believes that Sub-merchant has violated or is likely to violate the Operating Regulations or the Laws, (iv) Acquirer determines Sub-merchant poses a financial or regulatory risk to Acquirer, Member Bank, or an Association, (v) Acquirer’s agreement with Provider terminates, (vi) any Association de-registers Provider, (vii) Acquirer ceases to be a member of the Associations or fails to have the required licenses, or (viii) Acquirer is required to do so by Member Bank or any of the Associations.
5. Limits of Liability. Sub-merchant agrees to provide Acquirer, via a communication with Provider, with written notice of any alleged breach by Acquirer of this Sub-Merchant Agreement, which notice will specifically detail such alleged breach, within thirty (30) days of the date on which the alleged breach first occurred. Failure to so provide notice shall be deemed an acceptance by Sub-merchant and a waiver of any and all rights to dispute such breach.
EXCEPT FOR THOSE EXPRESS WARRANTIES MADE IN THIS SUB-MERCHANT AGREEMENT, ACQUIRER DISCLAIMS ALL WARRANTIES, INCLUDING, WITHOUT LIMITATION, ANY EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. Sub-merchant’s sole and exclusive remedy for any and all claims against Acquirer arising out of or in any way related to the transactions contemplated herein shall be termination of this Sub-Merchant Agreement. In the event that Sub-merchant has any claim arising in connection with the Services, rights, or obligations defined in this Sub-Merchant Agreement, Sub-merchant shall proceed against Provider and not against Acquirer, unless otherwise specifically set forth in the Operating Regulations. In no event shall Acquirer have any liability to Sub-merchant with respect to this Sub-Merchant Agreement or the Services. Sub-merchant acknowledges Acquirer is only providing this Sub-Merchant Agreement to assist in Provider’s processing relationship with Sub-merchant, that Acquirer is not liable for any action or failure to act by Provider, and that Acquirer shall have no liability whatsoever in connection with any products or services provided to Sub-merchant by Provider. If Provider is unable to provide its services to Sub-merchant in connection with this Sub-Merchant Agreement and Acquirer elects to provide those services directly, Sub-merchant acknowledges and agrees that the provisions of this Sub-Merchant Agreement will no longer apply and the terms of Acquirer’s then-current Bank Card Merchant Agreement, which would be provided to Sub-merchant upon request, will govern Acquirer’s relationship with Sub-merchant. If Provider subsequently provides its services to Sub-merchant in connection with this Sub-Merchant Agreement, Acquirer will cease to provide such services after receipt of notice from Provider and this Sub-Merchant Agreement will govern Acquirer’s relationship with Sub-merchant.
6. Miscellaneous. This Sub-Merchant Agreement is entered into, governed by, and construed pursuant to the laws of the State of Ohio without regard to conflicts of law provisions. This Sub-Merchant Agreement may not be assigned by Sub-merchant without the prior written consent of Acquirer. This Sub-Merchant Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors, transferees and assignees. This Sub-Merchant Agreement is for the benefit of, and may be enforced only by, Acquirer and Sub-merchant and is not for the benefit of, and may not be enforced by, any other party. Acquirer may amend this Sub-Merchant Agreement upon notice to Sub-merchant in accordance with Acquirer’s standard operating procedure. If any provision of this Sub-Merchant Agreement is determined to be illegal or invalid, such illegality or invalidity of that provision will not affect any of the remaining provisions and this Sub-Merchant Agreement will be construed as if such provision is not contained in the Sub-Merchant Agreement. “Member Bank” as used in this Sub-Merchant Agreement shall mean a member of VISA, Mastercard and/or Discover, as applicable, that provides sponsorship services in connection with this Sub-Merchant Agreement. As of the commencement of this Sub-Merchant Agreement, Member Bank shall be Fifth Third Bank, N. A., located in Cincinnati, OH, 45263. The Member Bank is a party to this Sub-Merchant Agreement. The Member Bank may be changed, and its rights and obligations assigned to another party by Acquirer at any time without notice to Sub-merchant.
Sub-Merchant agrees to the terms of this Sub-Merchant Agreement as of the Effective Date of the Agreement.