Card payment processing services terms and conditions
These Terms and Conditions apply to your card processing program. Together, the Merchant Application and these Terms and Conditions make up the Merchant Processing Agreement (“Agreement”). For simplicity, we refer to ourselves (i.e., eDebit Direct, LLC “eDebit Direct Cards”) as “ISO,” “we,” “our,” or “us” in this document. We refer to you (i.e., the legal entity or sole proprietorship on the Merchant Application) as “you” or “your” or “Merchant.” Other parties may also be parties to this Agreement (e.g., Member Bank, Guarantor, etc.). Capitalized terms used in this Agreement which are not defined herein shall have the meaning given to them in the Merchant Application or these Terms and Conditions.
Member Bank, Partners and ISO are collectively referred to herein as the “Provider” and, subject to the requirements of the Network Rules, Member Bank and ISO allocate the duties and obligations allocated to Provider as they deem appropriate in their sole discretion and may jointly or individually assert or exercise the rights or remedies provided to Provider hereunder. Member Bank, ISO, and Merchant agree as follows.
In addition to terms otherwise defined in this Agreement, capitalized terms shall have the meaning ascribed to them in this Article I.
1.01 “Account” means a commercial checking or demand deposit account maintained by Merchant for the crediting of collected funds and the debiting of fees and charges under this Agreement.
1.02 “ACH” means the Automated Clearing House paperless entry system controlled by the Federal Reserve Board.
1.03 “American Express” means the Cards bearing the Marks of, and Card Network operated by, American Express Travel Related Services Company, Inc. or its affiliates.
1.04 “Authorization” means a computerized function or a direct phone call to a designated number to examine individual Transactions to obtain approval from the Card Issuer to charge the Card for the amount of the sale in accordance with the terms of this Agreement and the Network Rules.
1.05 “Card” means (i) a valid credit card or debit card in the form issued under license from a Card Network (“Bank Card”); or (ii) any other valid credit card or debit card or other payment device approved by Member Bank and accepted by Merchant.
1.06 “Card Issuer” means the financial institution or company which has provided a Card to a Cardholder.
1.07 “Card Network” means Visa U.S.A., Inc., MasterCard International, Inc., American Express Travel Related Services Company, Inc., DFS Services LLC (the owner of Discover) and their affiliates, or any other payment networks approved by Member Bank that provide Cards accepted by Merchant.
1.08 “Card Not Present” or “CNP” means that an Imprint of the Card is not obtained at the point-of-sale.
1.09 “Cardholder” (sometimes referred to as “Card Member” in certain Card Network materials) shall mean any person authorized to use the Cards or the accounts established in connection with the Cards.
1.10 “Cardholder Information” means any non-public, sensitive information about a Cardholder or related to a Card, including, but not limited to, any combination of Cardholder name plus the Cardholder’s social security number, driver’s license or other identification number, or credit or debit card number, or other bank account number.
1.11 “Chargeback” means the procedure by which a Transaction (or disputed portion thereof) is returned to Provider by a Card Issuer for any reason, including, but not limited to, cases where such item does not comply with the applicable Network Rules.
1.12 “Discover Card” means a Card bearing the Discover Marks and accepted as part of the DFS Services Network.
1.13 “Guarantor” has the meaning set forth on the Merchant Application.
1.14 “Guaranty” has the meaning set forth on the Merchant Application.
1.15 “ISO” means the Independent Sales Organization (“ISO”) as set forth on the Merchant Application.
1.16 “Member Bank” is the Member Bank defined in the Bank Disclosure section of the Merchant Application.
1.17 “Merchant” means the legal entity or sole proprietor listed on the Merchant Application.
1.18 “Merchant Application” has the meaning set forth on the Merchant Application.
1.19 “Merchant Processing Agreement (“Agreement”)” means the Merchant Application, the Guaranty and these Terms and Conditions, and any supplementary documents referenced herein, and schedules, exhibits and amendments to the foregoing.
1.20 “Network Rules” means the rules, regulations, releases, interpretations and other requirements (whether contractual or otherwise) imposed or adopted by any Card Networks and related authorities, including without limitation those of the PCI Security Standards Council, LLC and the National Automated Clearing House Association (including, with respect to EBT, the Quest Operating Rules and with respect to PIN debit cards, the rules, regulations, policies and procedures of the applicable debit network).
1.21 “Provider” as provided by the introductory paragraph to these Terms and Conditions, means ISO and Member Bank together.
1.22 “Terms and Conditions” means this document which together with the Guaranty and Merchant Application constitute the Merchant Processing Agreement.
1.23 “Transaction” means any sale of products or services, or credit for such, from a Merchant for which the Cardholder makes payment through the use of any Card and which is presented to Provider for collection.
1.24 “Transaction Record” means evidence of a purchase, rental or lease of goods or services by a Cardholder from, and other payments to, Merchant using a Card, including preauthorized orders and Recurring Transactions, regardless of whether the form of such evidence is in paper or electronic form or otherwise.
1.25 “Voice Authorization” means a direct phone call to a designated number to obtain credit approval on a Transaction from the Card Issuer, whether by voice or voice-activated systems.
2.01 Honoring Cards. Merchant will accept all valid Cards when properly presented by Cardholders in payment for goods or services, subject to applicable Network Rules requiring Merchant to elect whether it will accept credit only, debit only or both debit and credit cards. Merchant’s election is set forth in the Merchant Application. Except to the extent explicitly provided by the Network Rules, Merchant may not establish minimum or maximum amounts for Card sales as a condition for accepting any Card. Merchant may, subject to applicable Law and the Network Rules, (i) impose a surcharge, under certain conditions and with proper disclosure to a Cardholder who elects to use a Card in lieu of payment by cash, check or other method of payment, or (ii) offer cash discounts to Cardholders making payment by cash or check. Merchant shall not engage in any acceptance practice that discriminates against or discourages the use of a Card Network’s Cards in favor of any other Card Network’s Cards or favor any particular Card Issuer over any other Card Issuers. Many states prohibit or limit cases where Merchant may surcharge a Cardholder or offer cash discounts and the Card Networks impose restrictions on surcharging and cash discounting, so Merchant should carefully consider and comply with all applicable Law and the Network Rules before Merchant begins to surcharge Cardholders or offer any cash discount.
2.02 Advertising. Subject to the Network Rules, Merchant may prominently display the promotional materials of the Provider in its place(s) of business. Merchant’s use of promotional materials and use of any trade name, trademark, service mark or logo type (collectively, the “Marks”) associated with a Card is limited to informing the public that the Card will be accepted at Merchant’s place(s) of business. During the term of this Agreement, Merchant may use promotional materials and Marks pursuant to and in strict compliance with the terms of this Agreement and the Network Rules. Upon notification by any Card Network or Provider, or upon termination of this Agreement, Merchant shall discontinue the use of such Card Network’s Marks and return any inventory or promotional materials to Provider. Merchant may not use any promotional materials or Marks associated with the Card Network in any way which suggests or implies that a Card Network endorses any goods or services other than Card payment services. Merchant’s website, if any, must prominently display the name of the Merchant and the name that will appear on the Cardholder statement.
2.03 Card Acceptance. When accepting a Card, Merchant will follow the steps and guidelines set forth in the Network Rules or otherwise provided by Provider from time to time for accepting Cards and in particular will: (a) determine in good faith and to the best of its ability that the Card is valid on its face; (b) obtain Authorization from the Card Issuer to charge the Cardholder’s account; (c) comply with the additional terms set forth in this Agreement with respect to Telephone Orders, Mail Orders, Internet, Preauthorized Orders and Installment Orders and with respect to any Card Not Present Transactions; (d) document the approved Transaction in accordance with this Agreement and the Network Rules; and (e) deliver a true and completed copy of the Transaction Record to the Cardholder at the time the goods are delivered or services performed or, if the Transaction Record is prepared by a point-of-sale terminal, at the time of the sale.
2.04 Authorization. Merchant will obtain an Authorization for all Transactions using a means approved by Provider. If Merchant cannot obtain an electronic Authorization through the use of a terminal, Merchant will request a Voice Authorization from Provider’s designated authorization center and legibly print the authorization number on the Transaction Record. Merchant will not obtain or attempt to obtain Authorization unless Merchant intends to submit a Transaction for the authorized amount if Authorization is given. Merchant may not divide a single Transaction between two or more Transaction Records on a single Card to avoid Authorization limits that may be set by the Card Issuer. An Authorization only confirms sufficient available credit and is not a guarantee that the Transaction will not be subject to dispute or Chargeback and does not warranty Cardholder identity. Provider may refuse to process any Transaction Record: (a) unless a proper authorization number or approval code has been recorded; (b) if Provider determines the Transaction Record is or is likely to become uncollectible from the Cardholder; or (c) if Provider has reason to believe the Transaction Record was prepared in violation of this Agreement or the Network Rules. Merchant will use, and may not circumvent, fraud identification tools requested by Provider, including address verification system processing and CVV2 processing, and acknowledges that use of these tools may prevent Merchant from accepting certain Cards and may not prevent fraudulent usage; any fraudulent Transaction may result in a Chargeback for which Merchant is fully liable.
2.05 Retention and Retrieval of Cards. With card-present Transactions, Merchant will use its best efforts, by reasonable and peaceful means, to retain or recover a Card when receiving such instructions when making a request for Authorization or if Merchant has reasonable grounds to believe the Card is counterfeit, fraudulent or stolen. Merchant’s obligations under this section do not authorize a breach of the peace or any injury to persons or property, and Merchant will hold Provider harmless from any claim arising from any injury to person or property or other breach of the peace in connection with the retention or recovery of a Card.
2.06 Multiple Transaction Records; Partial Consideration. Merchant may not prepare more than one Transaction Record for a single sale or for a single item but will include all goods and services purchased in a single Transaction in the total amount on a single Transaction Record, except for: (a) purchases in separate departments of a multiple department store; (b) partial payment, installment payment, delayed delivery or an advance deposit; or (c) delayed or amended charges governed by Network Rules for travel and entertainment merchants and related Transactions.
2.07 Returns and Adjustments; Credit Vouchers. Merchant’s policy for the exchange or return of goods sold and the adjustment for services rendered will be established and posted in accordance with the Network Rules of the applicable Card Networks. Merchant will disclose to a Cardholder before a Transaction is made if: (a) no refund, or less than a full refund, will be given; (b) returned merchandise will only be exchanged for similar merchandise of comparable value; (c) only a credit toward purchases will be given; or (d) special conditions or circumstances apply (e.g., late delivery, delivery charges, or other non-credit terms). If Merchant does not make these disclosures, a full refund in the form of a credit to the Cardholder’s Card account must be given. Disclosures must be made on all copies of Transaction Records or invoices, in letters approximately 1/4″ high in close proximity to the Cardholder signature space or on an invoice issued at the time of sale or presented for signature. Any change in Merchant’s return or cancellation policy must be submitted in writing to Provider at least fourteen (14) days prior to the change, and Provider may refuse to process any Transaction Record made subject to a revised policy of which Provider has not been notified.
2.08 Cash Payments. Merchant may not receive any payments from a Cardholder for charges included in any Transaction resulting from the use of any Card nor receive any payment from a Cardholder to prepare and present a Transaction for the purpose of effecting a deposit to the Cardholder’s account.
2.09 Cash Advances; Scrip Purchases. Unless otherwise approved in advance by Provider, Merchant may not deposit any Transaction for the purpose of obtaining or providing a cash advance either on Merchant’s Card or the Card of any other party and may not accept any Card at a scrip terminal, and either action will be grounds for Provider’s immediate termination of this Agreement.
2.10 Duplicate Transactions. Merchant may not deposit duplicate Transactions. Provider may debit Merchant for any adjustments for duplicate Transactions and Merchant is liable for any Chargebacks resulting therefrom.
2.11 Deposit of Fraudulent Transactions. Merchant may not accept or deposit any fraudulent or unauthorized Transactions and may not present for processing or credit any Transaction which originated with any other merchant or any source other than Transactions arising from bona fide purchases from Merchant for the approved goods and services. If Merchant deposits any such Transaction, Provider may: (a) immediately terminate this Agreement; (b) withhold funds and demand an escrow; or (c) report Merchant to the applicable Card Network. Merchant’s employees’ and agents’ actions are chargeable to Merchant.
2.12 Collection of Pre-Existing Debt. Merchant may not prepare and present any Transaction representing the refinancing of an existing Cardholder obligation, including, but not limited to, obligations previously owed to Merchant, arising from dishonor of a Cardholder’s personal check or relating to a Chargeback, or representing the collection of any other pre-existing indebtedness, including collection of delinquent accounts on behalf of third parties.
2.13 Data Security/Personal Cardholder Information. Except as otherwise provided by the Network Rules, Merchant may not, as a condition of sale, require Cardholders to provide personal information as a condition for honoring Cards unless such information is required to provide delivery of goods or services or Merchant has reason to believe the identity of the person presenting the Card may differ from that of the Cardholder. Merchant will not release, sell or otherwise disclose any Cardholder Information to any person other than Provider or the applicable Card Network, except as expressly authorized in writing by the Cardholder or as required by Law or the Network Rules.
(a) Safeguards. Merchant will maintain appropriate administrative, technical and physical safeguards for all Cardholder Information to (i) ensure confidentiality; (ii) protect against anticipated threats or hazards to security or integrity; (iii) protect against unauthorized access or use that could result in substantial harm or inconvenience; and (iv) properly dispose of Cardholder Information to ensure no unauthorized access. Merchant will maintain all safeguards in accordance with applicable Law and the Network Rules.
(b) Compliance with Card Network Rules. Merchant represents, warrants and covenants that it is and will remain in compliance with Network Rules related to data security, data integrity and safeguarding Cardholder Information, including PCI, DISC, SDP, DSR and CISP, and any data security guidelines or operating guides provided by Provider. Merchant will cause its service providers, subcontractors and agents to comply with these requirements and will report any noncompliance immediately. Merchant will encrypt all debit, credit or stored value card numbers whether in storage, transport or backup and will not store data security codes on its systems, network or software.
(c) Annual Certification. Merchant will provide an annual certification to Provider certifying compliance with the data security provisions of this Agreement, including applicable Card Network requirements, and will provide annual certifications for Merchant’s service providers, subcontractors and agents. To validate PCI DSS compliance, Merchant must complete a SAQ and, if applicable, a vulnerability scan, and may be assessed a noncompliance fee if it does not validate annually.
(d) Information Use Limitations. Merchant may not sell, disclose or make Cardholder Information available in a manner not provided for in this Agreement without Provider’s prior written consent. Merchant may disclose Cardholder Information to service providers, subcontractors and agents who need such information to provide services described in this Agreement, provided they assume confidentiality obligations and there is a written agreement requiring compliance with data security provisions and Network Rules, or where disclosure is required by legal process or Law.
(e) Response to Unauthorized Access. Merchant will notify Provider within twenty-four (24) hours after becoming aware of any actual or potential security breach resulting in unauthorized access to Cardholder Information and will provide assistance that Provider, Card Issuer, regulators, governmental authority or any Card Network deems necessary to contain and control the incident. Such assistance may include preserving records and compiling information to enable investigation, filing suspicious activity reports (if applicable), notifying regulators and notifying affected Cardholders, and Merchant will bear the cost of Cardholder notification unless the access was due to Provider’s acts or omissions.
(f) Miscellaneous. Merchant may not hold Provider liable for acts or omissions of other merchants, service providers, Card Issuers, Card Networks, financial institutions or others without a written contractual relationship with Provider or over which Provider has no control. These provisions supplement indemnification, audit, confidentiality and other similar provisions and survive termination. Merchant may not store discretionary Card read data such as CVV2 data, PIN data, address verification data or any other information prohibited by Network Rules. Provider may disclose Merchant and Transaction information to any Card Network for network duties, promotion, analytics, reporting and other lawful business purposes, including marketing and transactional communications. Merchant agrees it may receive Card Network communications, including via autodialed SMS or automated calls and fax.
2.14 Compliance with Laws and Network Rules. Merchant will comply with all applicable Laws and Network Rules and may not: (a) accept Cardholder payments for previous Card charges incurred at the Merchant location; (b) require a Cardholder to complete a postcard or similar device including account data in plain view when mailed; (c) add tax to transactions unless permitted by Law, and then only as part of the transaction amount; (d) enter any Transaction Record into interchange that was previously subject to Chargeback; (e) request or use an account number for any purpose other than payment for goods or services; (f) disburse funds as travelers cheques if the sole purpose is to allow a cash purchase; (g) disburse cash except as allowed for certain merchants or services; (h) accept a Card for manual cash disbursement; (i) accept a Card to collect or refinance uncollectible existing debt; (j) enter a Transaction representing collection of a dishonored check; or (k) accept a Card for unlawful Internet gambling. Merchant will pay all Card Network fines, fees, penalties and other assessments attributable to Merchant’s processing or business, and Card Networks may require limitation or termination of Merchant’s participation.
2.15 Merchant’s Business. Merchant will notify Provider immediately if it intends to (a) transfer or sell any substantial part of its total assets or liquidate; (b) change the basic nature of its business; (c) change ownership or transfer control; (d) enter into any joint venture, partnership or similar arrangement involving a non-party; (e) alter approved monthly volume, average or maximum ticket; (f) change its return policies or fulfillment house; or (g) change its Account. Merchant will notify Provider promptly in writing upon becoming subject to any bankruptcy or insolvency petition or proceeding. Failure to provide notice may be deemed a material breach and grounds for termination, and Provider may terminate if any such changes occur.
2.16 Merchant’s Representations and Warranties. Merchant represents and warrants that: (a) all information in the Merchant Application or other documents delivered to Provider is true, complete and properly reflects Merchant’s business, financial condition and principals, partners, owners or officers; (b) Merchant has authority to execute and perform this Agreement, which is duly authorized and will not violate Law or conflict with any other agreement; (c) Merchant holds all licenses required to conduct its business and is qualified to do business where required; and (d) there is no action, suit or proceeding pending or, to Merchant’s knowledge, threatened that would substantially impair its ability to operate or adversely affect its financial condition or operations.
2.17 Merchant’s Covenants. Merchant covenants that: (a) each Transaction Record presented is genuine and not the result of fraudulent activity, a prohibited Transaction, or a deposit on behalf of a non-authorized business; (b) each Transaction Record is the result of a bona fide purchase of goods or services in the stated amount; (c) Merchant will perform all obligations to the Cardholder related to the Transaction; (d) Merchant will comply with Provider’s procedures, and the Transaction will not involve any element of credit beyond what is set forth in this Agreement and will not be subject to defenses, disputes, offsets or counterclaims under Network Rules, the Consumer Credit Protection Act or other Law; and (e) any Credit Voucher represents a bona fide refund or adjustment on a Transaction for which a Transaction Record has been accepted by Provider.
2.18 Third Parties. Merchant may not use any third party service provider to assist with Transactions unless it has disclosed such use to Provider in writing and the third party is fully compliant with Laws and Network Rules and registered with the Card Network if required. Merchant is bound by the acts and omissions of any third party service provider and is responsible for its compliance. Merchant will indemnify and hold Provider harmless from any loss related to Merchant’s use of third parties. Provider is not responsible for any third party service provider used by Merchant and is not required to process Transactions received in non-approved formats. Provider has no responsibility or liability for hardware, software or services Merchant receives under a separate agreement with a third party.
2.19 Recourse. Merchant acknowledges that ISO performs the services contemplated and is responsible to Merchant for any failure to perform such services in accordance with this Agreement. Member Bank satisfies settlement files based on ISO instructions and is not responsible for independently verifying their accuracy. To the greatest extent permitted by Network Rules, Merchant’s sole recourse for failure by Provider is against ISO and not Member Bank.
2.20 PreAuthorized Transactions. If Merchant accepts a preauthorized order, the Cardholder shall execute and deliver a written preauthorization request to Merchant, which Merchant will retain and provide upon Provider’s request. Merchant will not deliver goods or perform services covered by a preauthorization after receiving notice that the preauthorization is cancelled or that the card is not to be honored.
2.21 PreAuthorization Health Care Transactions. If Merchant is a “Health Care Merchant” and accepts preauthorized health care Transactions, Merchant agrees to comply with Network Rules related to such Transactions.
2.22 Recurring Transactions. If Merchant accepts a recurring transaction (a “Recurring Transaction”) for periodic delivery or performance of goods or services, the Cardholder shall complete and deliver an order form authorizing such charges, stating the frequency and duration. For renewals, the Cardholder shall complete a subsequent order form. A Recurring Transaction may not include partial payments for a single Transaction or periodic payments on which Merchant assesses additional finance charges. Merchant must retain the order form for the duration of the recurring charges and provide it upon request. Merchant must record, retain and produce the “ship to address” and address verification code where applicable. Merchant must not complete an initial or subsequent Recurring Transaction after receiving a cancellation notice or a response that the Card is not to be honored.
2.23 Limited Acceptance.
(a) If appropriately indicated, Merchant shall be a limited acceptance merchant, meaning Merchant has elected to accept only certain Visa and MasterCard Card types. Merchant may elect to accept only nonPIN based debit/stored value/electronic benefit transactions, only credit transactions, or all credit and signature debit transactions, but must accept all valid Visa or MasterCard Card types issued by a nonU.S. issuer if it accepts any Visa or MasterCard Card types. Merchant is not required to accept Cards of other Card Networks, except that Diner’s International Cards carrying the MasterCard Mark must be accepted if Merchant accepts MasterCard transactions of the same type. Provider has no obligation other than as provided under Network Rules and Law, and does not police card types at the point-of-sale. Merchant is solely responsible for implementing limited acceptance and policing Card Network types for submitted Transactions. If Merchant submits a Transaction for a card type it has elected not to accept, Provider may process it and Merchant will pay applicable fees and assessments. Merchant will comply with all Laws and Network Rules for the processed Card Network type.
(b) If Merchant has chosen to accept Discover Cards, Merchant must accept Discover Cards at all establishments, including for purchases, charitable contributions and Cash Over Transactions (subject to Network Rules). Merchant must create a Transaction Record for each Discover Transaction and deliver at least one copy to the Cardholder. Merchant may issue a Cash Over in connection with a Discover Transaction, must obtain a single Authorization for the aggregate amount and must include both purchase and Cash Over amounts on the Transaction Record.
3.01 Acceptance. Provider will accept from Merchant all Transaction Records deposited under this Agreement and will present them to the appropriate Card Issuers for collection. Merchant must transmit Transaction Records and Credit Vouchers on the same or next business day after origination. Presentment, collection, reassignment or rejection of Transaction Records are subject to this Agreement and Network Rules. Provider will provisionally credit the value of collected Transaction Records to Merchant’s Account and may adjust amounts for Chargebacks, fees, penalties, late submission charges, reserve deposits, negative batch deposits and items without final payment.
3.02 Endorsement. By presenting Transaction Records to Provider for collection and payment, Merchant sells and assigns all rights, title and interest in each Transaction Record completed in conformity with Provider’s procedures. Presentment constitutes an endorsement by Merchant, and Provider may supply such endorsement on Merchant’s behalf.
3.03 Prohibited Payments. Provider may receive payment of any Transaction Record presented and paid by Provider unless and until there is a Chargeback. Unless specifically authorized in writing, Merchant may not collect or attempt to collect any Transaction Record, including Chargebacks, and will hold in trust for Provider and promptly deliver any payment Merchant receives, along with Cardholder name, account number and accompanying payment information.
3.04 Chargebacks. Merchant is responsible for all Chargebacks related to its Transactions and is liable to Provider for any Transaction disputed under Network Rules. Merchant authorizes Provider to offset funds due to Merchant or debit the Account or Reserve Account for all Chargebacks and agrees to cooperate with Provider regarding Chargebacks. Merchant may not initiate a sale Transaction to collect a Chargeback and will pay current fees for each Chargeback and any fines or assessments imposed by Card Networks or Card Issuers.
3.05 Reserve Account. Member Bank may establish and Merchant agrees to fund a non interest bearing Reserve Account, in an amount determined by Member Bank, funded by debits to Merchant’s accounts, deductions or offsets from payments, letters of credit, pledged certificates of deposit or other security or increased fees. The Reserve Account may be established at any time for reasons including duplicate Transactions, attempts to circumvent “call center” messages, breaches of this Agreement, inaccuracies in the Merchant Application, changes in business type without approval, fraud or unauthorized charges, excessive Chargebacks, excessive document retrieval requests, financial instability or cessation of business, or termination of this Agreement. Collected funds may be placed in the Reserve Account, and additional deposits may be required. Unless Member Bank determines otherwise, the Reserve Account will remain in place for the later of twelve (12) months or such period during which Cardholder disputes remain valid. Account debit and credit provisions apply to the Reserve Account and survive termination until it is closed, and any remaining balance after expenses and losses are paid will be disbursed to Merchant.
4.01 Termination.
(a) Without Cause. Provider may terminate this Agreement without cause upon thirty (30) days’ advance written notice.
(b) For Cause. Provider may terminate this Agreement immediately upon notice if it reasonably determines that, among other conditions, Merchant has violated this Agreement or Network Rules, experienced a material adverse change in financial condition, become subject to insolvency proceedings, provided false or misleading information, exceeded acceptable Chargeback ratios, maintained overdrafts, processed fraudulent or unauthorized Transactions, failed to pay amounts due, failed to perform obligations, caused Provider to be in breach of Network Rules, had guaranties revoked, raised circumstances harming Card Network goodwill, or otherwise caused Provider’s security or safety concerns.
4.02 Effect of Bankruptcy. Any account or security held by Provider is not subject to preference, claim or stay by reason of bankruptcy or similar Law. The acquisition of Transactions is a financial accommodation, and if Merchant becomes a debtor in bankruptcy, this Agreement may not be assumed or enforced, and Provider will be excused from performance.
4.03 Effect of Termination; Early Termination Fee. Upon termination, Provider may withhold disbursements for Transactions in process. If terminated for cause, Provider may be required to report Merchant to Card Network and industry databases including MATCH, and Merchant consents to such reporting and waives claims related to it. Merchant will cease requesting Authorizations upon termination, and any Authorization obtained afterward will not reinstate the Agreement. Merchant will return all Provider property, forms and equipment; obligations for Transactions prior to termination survive, including Chargebacks and related expenses. Provider is not liable for damages due to termination. Upon request, Merchant will provide all Transaction Records and Credit Vouchers retained at termination. Upon termination, all amounts due to Provider accelerate and become immediately due, and if the Agreement is terminated before the Initial Term ends for any reason other than Provider’s uncured material breach, Merchant will pay the early termination fee stated in the Merchant Application plus Provider’s costs and attorneys’ fees, which are agreed to be a reasonable estimate of harm and not a penalty.
5.01 Account Monitoring. Provider will monitor Merchant’s Transaction activity and may suspend disbursement of funds upon reasonable grounds for a reasonable period to investigate suspicious or unusual Transactions, with good faith efforts to notify Merchant. Provider is not liable for any loss attributed to such suspension.
5.02 Forms. Merchant will use only forms or transmission modes for Transaction Records and Credit Vouchers that are provided or approved in advance by Provider and may not use such forms for nonTransaction purposes.
5.03 Indemnification. Merchant will defend, indemnify and hold Provider and its related parties harmless from any Damages arising from, directly or indirectly, security breaches of Cardholder Information, breaches of representations or terms, negligence or willful misconduct, or violations of Law or Network Rules by Merchant or its service providers, except where caused by Provider’s gross negligence, willful misconduct or breach. Merchant will reimburse Provider for Card Network assessments, fines or penalties and authorizes Member Bank to deduct such sums from the Account, Reserve Account or settlement amounts.
5.04 Records. Merchant will preserve Transaction Records, Credit Vouchers and any written Cardholder authorization for the longer of two (2) years after completion, the period required by Law or Network Rules, or until any dispute is resolved.
5.05 Requests for Copies. Upon request, Merchant will promptly provide Provider with original or legible copies of Transaction Records and other documentary evidence reasonably requested for legal compliance or to respond to Cardholder account questions.
5.06 Exclusivity. During the Term, Merchant will not enter into an agreement with any other entity for similar processing services and Provider will be Merchant’s exclusive provider of Card processing services set forth in this Agreement.
5.07 Fees and Charges. Merchant will pay Provider the fees and charges set forth on the Merchant Application, including additional charges for transactions failing to meet lowest interchange requirements. Fees will be debited via ACH or withheld from daily payments. Provider may change fees, including adding fees for additional services, upon thirty (30) days’ written notice.
5.08 Security Interest. This Agreement constitutes a security agreement under the Colorado Commercial Code, and Merchant grants Provider a security interest in Transactions, Transaction Records, accounts receivable and payment rights, accounts, deposits and other property and funds related to this Agreement and its proceeds, to secure Merchant’s obligations. Provider may exercise its security interest by setoff or otherwise if Merchant breaches obligations or if future proceeds are unlikely to cover anticipated Chargebacks, credits, fees and adjustments. Provider may require additional security and restrict withdrawals pending exercise of secured party rights. Merchant will execute documents and obtain consents to perfect Provider’s security interests and represents that no other party has a lien on pledged collateral without Provider’s consent. Merchant may sell and assign future Transaction receivables to Provider and its partners but may not sell or assign them to others without Provider’s written consent.
5.09 Modifications to Agreement. Provider may amend this Agreement, including fees, by mailing written notice at least thirty (30) days prior to the effective date, and the amendment becomes effective unless Merchant terminates before such date. Continued processing after the period constitutes acceptance. The Agreement is also subject to amendment to conform to Network Rules and Law, which may require shorter notice. Merchant may not terminate solely due to amendments necessary to comply with Network Rules, Law or judicial decisions.
5.10 Warranty Disclaimer. PROVIDER MAKES NO WARRANTIES REGARDING THE USE, OPERATION OR PERFORMANCE OR NONPERFORMANCE OF SOFTWARE AND SYSTEMS UTILIZED FOR THIS AGREEMENT, WHETHER EXPRESS OR IMPLIED, AND EXPRESSLY DISCLAIMS ALL IMPLIED WARRANTIES, INCLUDING ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
5.11 Limitation of Liability. Provider’s liability per Transaction is limited to the amount of the Transaction Record less applicable fees. Provider and its agents are not liable for indirect, incidental, exemplary, punitive, special or consequential damages, including lost profits. Merchant waives all claims unless written notice is provided within thirty (30) days after Merchant knew or should have known of the occurrence. Merchant will indemnify Provider for claims related to paid Transaction Records or losses due to Merchant’s breach and reimburse Provider for associated expenses, including attorneys’ fees. Overall liability is limited to the lesser of fees paid during the last three (3) months (excluding passthrough costs) or fifty thousand dollars ($50,000).
5.12 Waiver. Provider’s failure to enforce any provision does not constitute a waiver of the right to enforce the same or other provisions in the future.
5.13 Written Notices. Written notices and communications are deemed delivered when hand delivered or emailed with confirmation, and upon mailing when sent first class mail, postage prepaid, to the addresses or email address provided in the Merchant Application or this Agreement.
5.14 Choice of Law; Jurisdiction; Waiver of Jury Trial. Colorado law governs this Agreement. Any claim must be initiated and maintained exclusively in state or federal courts in Denver County, Colorado. To the extent permitted, Merchant and Provider waive the right to trial by jury and agree that actions will be tried by a judge.
5.15 Entire Agreement; Assignability. This Agreement expresses the entire understanding of the parties. Member Bank may assign this Agreement without Merchant’s or ISO’s consent. Merchant or ISO may not assign without Member Bank’s prior written consent. This Agreement binds and benefits successors and assigns.
5.16 Deposit Account. Merchant will maintain an Account at a bank that is a member of the Federal Reserve ACH system and approved by Provider, and will authorize debits for credits and debits related to this Agreement. Merchant may not close or change the Account during the Term and for one (1) year thereafter without Provider’s prior written approval. Merchant is liable for all fees and costs associated with the Account and overdrafts and grants Provider a security interest in the Account to secure obligations, and will execute documents and obtain consents as requested to protect that security interest. Merchant will maintain sufficient funds in the Account for all contemplated Transactions and related fees.
5.17 Credit and Financial Inquiries; Additional Locations; Inspections. Provider may make credit inquiries it considers necessary before and after acceptance of this Agreement and may require written consents, financial statements, tax returns and other information. Merchant may accept Cards only at approved locations, and additional locations require Provider’s consent. Provider may inspect locations and audit compliance, including data security and Card Network compliance. Merchant will make records available and facilities accessible for such audits, bearing its own expenses, and audits will not unreasonably interfere with business.
5.18 Marketing of NonCard Services. Provider may offer additional products and services from time to time. Merchant may decline offers or be deemed to accept them and be liable for payment. If an additional product or service is offered by ISO independently, ISO is solely responsible and Merchant may not assert claims against Member Bank related to it, and vice versa for products or services offered solely by Member Bank.
5.19 Force Majeurs. Parties are released from liability if they fail to perform obligations due to events beyond their reasonable control, including acts of God, natural disasters, war, terrorism, civil commotion, equipment breakdown, or governmental orders or regulations.
5.20 No ThirdParty Beneficiary. No other person or entity is a third party beneficiary of this Agreement.
5.21 Sever ability; Conflict with Network Rules. If any provision is held invalid or unenforceable, the remaining provisions remain effective. In the event of conflict between this Agreement and Network Rules, Network Rules govern.
5.22 Confidentiality. Merchant will protect Provider Confidential Information from unauthorized disclosure with at least reasonable care and not use it except in performing obligations under this Agreement. Provider Confidential Information includes scientific, technical or business information, software, hardware, records, supplier and customer information, processes, trade secrets, financial information and similar proprietary information. Nondisclosure obligations continue during the Term and for at least three (3) years thereafter for non trade secret information, and for as long as trade secrets retain that status (but no less than three (3) years).
Terms Below Are Additional Terms Applicable Specifically to American Express Card Acceptance (capitalized terms not defined elsewhere shall have the meanings assigned in the American Express Network Rules). In the event of a conflict between the terms below and other terms of this Agreement, the terms below control for American Express transactions only. Merchant shall be bound by American Express Network Rules, including the Merchant Operating Guide.
A5.23 Transaction Data. Merchant authorizes Provider and/or its affiliates to submit American Express Transactions and receive settlement from American Express or Member Bank on Merchant’s behalf.
A5.24 Marketing Message Opt-Out. Merchant may opt out of future commercial marketing communications from American Express by contacting Provider but may still receive transactional or relationship messages.
A5.25 American Express as Third Party Beneficiary. American Express shall have third party beneficiary rights, but not obligations, to the terms of this Agreement applicable to American Express Card acceptance to enforce such terms against Merchant.
A5.26 American Express Opt-Out. Merchant may opt out of accepting American Express at any time without affecting its rights to accept Cards bearing Marks of other Card Networks.
A5.27 Refund Policies. Merchant’s American Express refund policies must be at least as favorable as for other Card Networks and disclosed at the time of purchase in compliance with Law. Merchant may not bill or attempt to collect from any Cardholder for an American Express Transaction unless a Chargeback has been exercised, Merchant has paid for such Chargeback, and has the right to do so.
A5.28 Establishment Closing. If Merchant closes any Establishments, it must notify ISO immediately, ensure policies are conveyed and posted as required, and for Advance Payment or Delayed Delivery Charges either deliver goods/services or issue credit for undelivered portions.
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