Payment Services Agreement
THIS AGREEMENT CONTAINS AN ARBITRATION CLAUSE.
Dated: September 22, 2016. Any subsequent changes to this Payment Services Agreement will be dated and can be found and read in the corresponding Payment Services Agreement on the ProPay website.
This Payment Services Agreement (“Agreement”) is a legal agreement between you (“you,” “your”) and ProPay, Inc., a Utah corporation (“ProPay,” “we,” “our,” “us”) governing your use of a ProPay Account (as defined below) and our payment processing services (collectively, the “Services”). You must accept all of the terms of this Agreement to use the Services.
1. THE SERVICE.
The Services are intended to be used for business purposes and not for personal, family, or household use. The Services allow you to accept payment from your customers using credit and debit cards (“Card(s)”) validly issued by members of Visa, MasterCard, Discover, and American Express (collectively “Card Brands”). As the provider of the Services, we have certain obligations under the Card Brand regulations.
2. PROPAY ACCOUNT.
You must open an account with us (“ProPay Account” or “Account”) to use the Services. The proceeds from your Card transactions processed using the Services go into your ProPay Account. Our sponsor banks require certain information to open a ProPay Account. You must provide accurate and complete information and keep the information up-to-date. We rely on this information for underwriting and to meet our obligations under applicable federal and state laws and other regulatory requirements. You must only use the Services for the business purpose described by you in applying for a ProPay Account. On an ongoing basis, you will provide us with the current address of each of your offices, all “doing business as” (DBA) names used by you, and a complete description of goods sold and services provided by you. If the scope or nature of your business or the type of products or services you offer changes, you must notify us prior to the change. You are liable to us for all losses and expenses incurred by us arising out of your failure to report changes to us.
3. REQUIRED INFORMATION, VERIFICATION.
Our sponsor banks and the Card Brands require us to verify your identity, credit, business operations, and compliance with the obligations under this Agreement. In order to open and maintain a ProPay Account, you must provide us sufficient information and documentation as requested by us, including information to verify your identity, financial statements, and customer information. You authorize us to make, from time to time, any business and personal credit inquiries, identity-verification inquiries, and other inquiries considered necessary to review the acceptance and continuation of this Agreement. You also authorize any person or credit reporting agency to compile information to answer those inquires and to furnish that information to us. We reserve the right to decline your application for any reason. We are required to report certain information to our sponsor banks or Card Brands, including the names of any principles and country of domicile.
4. COMPLIANCE WITH LAWS AND RULES.
5. HARDWARE AND SOFTWARE REQUIREMENTS.
You are required to provide and maintain your own compatible hardware and software necessary to use the Services. For access to our website via the internet, at a minimum, you must provide: (1) An Internet browser that supports 128-bit encryption, (2) a computer with Internet capable of supporting the foregoing, (3) Sufficient electronic storage capacity on your computer's hard drive, and (4) a printer that is capable of printing from the applicant's browser and e-mail software. It is highly recommended that you use a firewall and frequently updated anti-virus software. For use of our mobile app, you must have: (1) a compatible mobile phone on a supported carrier, (2) a wireless Internet connection or data coverage to download, install, and use the app, and (3) a compatible card reader device. Charges may apply from your Internet provider or mobile phone carrier for Internet or data usage.
6. PROCESSING LIMITS.
There are no monthly processing minimums. We establish the processing limits on your ProPay Account. We will assign a maximum dollar amount per sales ticket and an aggregate maximum dollar amount of Card transactions per calendar month. You may request an increase in your Account per sales ticket limit or your monthly processing sales volume by submitting a request to us. Any increase shall be at our sole discretion, and we reserve the right to reverse and decrease any increase previously authorized. Any increase granted by us may be conditional upon and require the establishment of a Reserve Account (defined below).
7. TRANSACTION PROCESSING
In order to process Card transactions, you must familiarize yourself with and adhere to the applicable Rules. The following sections address some but not all of the Rules that must be adhered to in order to process Card transactions. For instance, chapter 4 of the American Express Merchant Reference Guide – US contains a description of Rules you must follow for American Express transaction processing. It is your responsibility to understand and follow all Rules.
8. CARD ACCEPTANCE.
You will honor, without discrimination, any valid Card properly tendered by a Cardholder. “Cardholder” means a person possessing a Card and asserting to be the person in whose name the Card is issued. You may elect not to accept Visa or MasterCard branded debit cards, but you must provide ProPay with prior written notice of such election. You will identify the Cardholder when accepting payment and will request the Card expiration date and ZIP code or postal code from the Cardholder's billing address. It is also highly recommended that you obtain the security code from each Card. You must not honor any Card if the Card has expired or if the Card number is listed on a current Electronic Warning Bulletin file. You will properly disclose to the Cardholder, at the time of the Card transaction, your name, return policy, and other limitations you may have on accepting returned merchandise. Our name will appear in conjunction with your name on Cardholders’ statements. You will not accept any payments from a Cardholder relating to previous charges for merchandise or services, and if you receive such payments, you will promptly remit them to us.
9. CARD AUTHORIZATION.
You must obtain authorization via methods acceptable to us prior to completing any Card transaction. You must follow any instructions received during the authorization process. Upon receipt of authorization, you may consummate only the transaction authorized. Where authorization is obtained, you will be deemed to warrant the true identity of the customer as the Cardholder. Transactions will be deemed invalid on Cards that are expired, whether or not an authorization has been obtained.
Authorizations are not a guarantee of acceptance or payment of a Card transaction and do not waive any provision of this Agreement or otherwise validate a fraudulent transaction or a transaction involving the use of an expired Card. We may refuse to authorize any transaction, and we are not liable to you if authorization for a transaction is not given. You will not have any claim against, or right to receive payment from, a Cardholder or any other customer in any Card transaction if we refuse to authorize the transaction for any reason.
You will deliver to the Cardholder at the time of the transaction a complete and legible receipt from the Card transaction or refund. You must retain the merchant copy of the receipt in accordance with the applicable Card Brand information security and confidentiality requirements for at least 3 years following the date of completion of the Card transaction (or such longer period as the Rules may require).
11. RECURRING TRANSACTIONS.
For recurring transactions, you must obtain a written request from the Cardholder for such goods and services to be charged to the Cardholder's account, the frequency of the recurring charge, and the duration of time during which such charges may be made. You must obtain such written consent before the first recurring transaction, and you must notify the Cardholder that he or she is able to discontinue consent for recurring billing charges at any time. You must retain evidence of such written consent for recurring transactions for twenty-four months (24) from the date you submit the last recurring billing charge. If this Agreement is terminated for any reason, you will, at your own cost, advise all individuals and establishments to whom you submit recurring billing charges that you no longer accept the Card for amounts owed by such establishments or by such individual. The termination of a Cardholders' ProPay Account constitutes immediate cancellation of the Cardholder's consent for recurring billing charges. We have no obligation to notify you of such cancellation, nor shall we have any liability to you arising from any such cancellation. You will not complete any recurring transaction after receiving a cancellation notice from the Cardholder, notice from us to not complete a recurring transaction, or a response that the Card is not to be honored.
12. FUTURE DELIVERY.
You will not accept a Card transaction for the sale of goods or services for future delivery. If, however, you have clearly disclosed your intentions to the Cardholder and the Cardholder agrees, you may submit the following types of charges to us before you deliver the goods purchased to the Cardholder: (a) charges representing deposits on (i) custom or special orders (provided that in doing so you are in compliance with applicable law) and (ii) mail orders for items not in inventory at the time the order is placed; and (b) charges representing advance, partial, or full payment for items the Cardholder requests you to deliver at a later date. If a Cardholder disputes any of these charges, we will have the right to Full Recourse for such charge. You represent and warrant to us that you will not rely on any proceeds or credit resulting from such transactions to purchase or furnish goods or services. You will maintain sufficient capital to provide for the delivery of goods or services at the agreed upon future date, independent of any credit or proceeds resulting from Card transactions taken in connection with future delivery transactions.
13. E-COMMERCE TRANSACTIONS.
You may process e-commerce transactions only if the transactions have been encrypted by a third party vendor acceptable to us. You are liable for all chargebacks and losses related to e-commerce transactions, whether or not encrypted. Encryption is not a guarantee of payment and will not waive any provision of this Agreement or otherwise validate a fraudulent transaction.
For goods to be shipped on e-commerce transactions, you may obtain authorization up to seven calendar days prior to the shipment date. You need not obtain a second authorization if the Card transaction amount is within 15% of the authorized amount, provided that the additional amount represents shipping costs. Your website must contain all of the following information: (i) complete description of the goods or services offered, (ii) return and refund policies, (iii) customer service contact, including email address or telephone number, (iv) transaction currency (such as U.S. or Canadian dollars) (v) any export or legal restrictions, if known, and (vi) delivery policy.
14. PROHIBITED PRACTICES.
You must not accept Card transactions for donations from Pennsylvania residents for non-profits, religious organizations, charities and political campaigns. You may not split transactions into multiple Card transactions except where: (a) partial payment is entered on the transaction record and the balance of the transaction amount is paid in cash or by check at the time of transaction; or, (b) the amount represents an advance deposit in a Card transaction completed in accordance with this Agreement and the Rules. You will not use the Services to accept amounts representing the refinancing of an existing uncollectible obligation, debt, or dishonored check of a Cardholder. You may not process transactions for, receive payments on behalf of, or (unless required by Law) redirect payments to a third party. You agree that we may, within our sole discretion, suspend the Services for a reasonable period of time required to investigate suspicious or unusual activity. ProPay shall have no liability for any losses you may attribute to any suspension of funds disbursement. We do not allow the Service to be used for high risk transactions or transactions for illegal activities. Such activities are prohibited by us and are in violation of the High Risk Transactions/Acceptable Use Policy found at http://www.propay.com/legal-agreements/high-risk-acceptable-use-policy. You agree to be bound by the High Risk Transactions/Acceptable Use Policy and understand that, if you use the Services in contravention of the High Risk Transactions/Acceptable Use Policy, we may incur substantial liability and/or suffer significant damages, including, without limitation, fines and other related expenses from the Card Brands, our sponsor banks, payment processors, and service providers, the amount of which may be extremely difficult and impracticable to ascertain. In the event that you engage in the prohibited behavior above, we may fine you $500.00 USD and/or take legal action against you to recover losses that are in excess of the amount fined. You acknowledge and hereby agree that $500.00 USD is reasonable minimum estimate of our damages, considering all currently existing circumstances, including, without limitation, the relationship of the sum to the range of harm to us that reasonably could be anticipated and the anticipation that proof of actual damages may be impractical or extremely difficult to ascertain. In addition to the fines above, if you engage in the behavior described in, or sell goods or services including access to content, in violation of, the High Risk Transactions/Acceptable Use Policy of this Agreement, you hereby acknowledge liability to us for any and all damages suffered by us, without limitation despite other language in this Agreement to the contrary. Without limiting the foregoing, you agree to reimburse us for any and all costs, expenses, and fines levied on us by the Card Brands, our sponsor banks, payment processors, or service providers as a result of your use of the Services or your ProPay Account in violation of this Agreement. We may reverse Card transactions we deem to violate this Agreement, the Laws, Rules, or Policies, and you agree to reimburse us for any such reversal. You agree that we are entitled to invoke the security interest we have, as set forth in this Agreement and all other rights we have, pursuant to a violation of the High Risk Transaction/Acceptable Use Policy of this Agreement, in order to collect the fines levied against you, or other losses incurred by us, as set forth in this Agreement.
15. FRAUDULENT TRANSACTIONS.
You will not present for processing or credit, directly or indirectly, any transaction not originated as a result of a Card transaction directly between you and a Cardholder or any transaction you know or should know to be fraudulent or not authorized by the Cardholder. We will refer perpetrators of fraudulent transactions, in our discretion, to the appropriate law enforcement agency.
16. PROPAY MERCHANT SERVICES AGREEMENT.
We may require that you enter into a Merchant Services Agreement if certain Card processing volume thresholds are met by your use of the Services. We will notify you if this occurs. Your continued use of the Services after we notify you will constitute your agreement to the Merchant Services Agreement.
17. DEPOSIT OF FUNDS.
This Agreement is a contract of financial accommodation within the meaning of the Bankruptcy Code, 11 U.S.C. § 365, as amended from time to time. Our sponsor banks will deposit to the non-interest bearing pooled account titled in the name of our sponsor bank for the benefit of all ProPay Accountholders (“Member Operating Account”) all amounts of Card transactions complying with the terms of this Agreement and the Rules. The Member Operating Account is maintained by our sponsor banks for the clearing and settlement of transactions of all ProPay Accountholders, including those to your ProPay Account. A statement of the balance of your funds in the Member Operating Account and in your ProPay Account is provided by us to you on periodic statements that can be accessed by you online on our website. All amounts owing under this Agreement will remain in the Member Operating Account until: (i) the funds are released by you at your discretion; (ii) you inform our sponsor bank in accordance with our instructions, to release the funds to the Checking Account (defined below) designated by you in accordance with the Electronic Funds Transfer Agreement, which is incorporated herein by reference; or (iii) you use our prepaid debit card for the purchase of goods and services from an authorized merchant in accordance with the Cardholder Agreement, which is incorporated herein by reference. You acknowledge that all credits provided to you are provisional and subject to chargebacks and adjustments in accordance with this Agreement and the Rules, whether or not a transaction is charged back by the Card issuer. We may revoke or reverse at any time any credit given to you in the following circumstances: (i) the Card transaction was not made in compliance with all terms and conditions of this Agreement and the Laws, Rules, and Policies; (ii) the Cardholder disputes liability to us for any reason, including but not limited to those chargeback rights enumerated in the Rules; (iii) the Card transaction was not directly between you and the Cardholder; or (iv) a deposit to your ProPay Account was made erroneously. If revoking or reversing a credit deposited to your ProPay Account results in a negative balance in your ProPay Account, we may immediately debit your Checking Account as authorized under section 19. If you have chosen to activate our prepaid debit card to access the funds in your ProPay Account, you irrevocably authorize the transfer of funds from your ProPay Account to the issuing bank card account for purchases or ATM withdrawals you make using the prepaid debit card and any reserve amount which may be required by said issuing bank. You acknowledge that your obligation to us for all amounts owed under this Agreement arise out of the same transaction as our sponsor banks' obligation to place funds in the Member Operating Account with respect to transactions processed pursuant to the terms of this Agreement for your ProPay Account. All Card transaction proceeds and deposits are subject to audit and final verification by us, and may be adjusted for inaccuracies. The funds in the Member Operating Account may be eligible for FDIC pass-through insurance up to the maximum amount as set forth in FDIC regulations, as amended from time to time.
You will pay us fees for the Services as outlined in this Agreement. Such fees will be calculated and debited from amounts due to you concurrently with transaction activity or will be netted out from the funds due you under this Agreement. You will immediately pay us any amount incurred by us attributable to you under this Agreement, including but not limited to chargebacks, credits, fines imposed by Card Brands, as applicable, and non-sufficient fund fees and ACH debits that overdraw amounts due to you under the ProPay Account, Reserve Account, or at any other financial institution for any amount you owe us under this Agreement or under any contract now existing or later entered into between you and us. You may be granted processing credit. This processing credit may only be used by you to offset processing fees you may owe to us. We may, at our sole discretion, cancel any processing credit granted to you. You must pay Account Fees for opening and renewing your ProPay Account. Your ProPay Account is eligible for annual Terms and may be eligible for a month-to-month Terms, depending on your ProPay Account configuration. If you select an annual Term and cancel your ProPay Account within 30 days of the date of your payment of your annual Account Fee, we will refund a portion of your annual Account Fee to you. If you cancel your ProPay Account 30 days or more after the date of your payment of your annual Account Fee, your annual Account Fee will not be refunded and your ProPay Account will be cancelled. If you have not cancelled your ProPay Account and if the annual Account Fee is not paid by midnight on the anniversary date, the annual Account Fee will be assessed on a monthly basis (the annual Account Fee payable monthly shall be calculated by multiplying the previous annual fee by two and then dividing by 12) until you take action to renew, upgrade, or cancel your ProPay Account. If you select a month-to-month Term and cancel your ProPay Account you will not be refunded any monthly Account Fee already paid. In the event any annual or monthly Account Fee is not paid in full for any reason, this Agreement may be terminated and your ProPay Account closed. To reopen the ProPay Account or renew any of the Service, an application may be required and all fees, including an Account Fee and/or Reactivation Fee may apply. You will be charged the following fees unless they are waived, adjusted by special arrangement, or changed by affiliate company specific pricing:
|Discount Fee for Visa, MasterCard, and Discover Volume
||Up to 3.5%
|Discount Fee for American Express Volume
||Up to 3.75%
|Authorization / Per Transaction Fee
||Up to $0.35
|Void Fee (before capture)
|Refund Fee (after capture)
|Account Annual Fee
||Up to $99.95
|Month-to-Month Renewal Fee for Trial and Basic ProPay Accounts
(for accounts with insufficient funds to pay their Account Annual fee)
|Two times the previous Annual Fee divided by 12
|Monthly Maintenance Fee (for ProPay Accounts with no Account Annual Fee)
||$5.00 per month after 180 days of inactivity
|Month-to-Month Early Termination Liquidated Damages (for ProPay Accounts with month-to-month Term that to terminate within 180 days of the Effective Date).
|| $25.00 per chargeback
|Insufficient Funds Fee
||$20.00 each occurence
|Processing Fee (for unclaimed property transferred to a governmental body)
||$80.00 or as set by statute
|Printed Monthly Statement Fee
||Up to $10.00
|Investigation Fee (up to 3 hours)
||$20.00 per investigation
|Extended Investigation Fee (for each hour beyond 3 to investigate or respond to government order)
||$180 per hour
|Merchant is also responsible for any transaction related fees that are assessed by the Card Brands or Bank, including, but not limited to, assessments, pass through fees, cross border fees, FANF, and network access fees, as adjusted or allocated by ProPay.
|Electronic Funds Transfer Fees & Limitations
|ACH Out Fee
||Between $0.10 and $0.35 (depending on ProPay Account type)
|ACH Debit (transferring Funds into your ProPay Account, maximum of $250 per transfer and $1,000 per month. If you wish to increase the maximum, please contact a customer service representative. The maximum for your particular ProPay Account may be increased or decreased in ProPay’s sole discretion upon notice from ProPay.)
|ACH Return Item/NOC Fee (insufficient funds in or closure of your ProPay or Bank Account, or if the account number or other information you provided is incorrect.)
|Intra-ProPay Transfer Fee (transferring funds between your ProPay Account and any other ProPay Account)
|ACH Fee Schedule
(if you are approved by ProPay to accept ACH payments from customers)
|ACH Payment Fee (per transaction)
|Notification of Change Fee (per item)
|Return Item Fee (insufficient funds, etc.) (per item)
|ACH stop Payment/Customer Cancelation Fee (per item)
19. CHECKING ACCOUNT.
The transfer of funds by you into and out of your ProPay Account is governed by the terms and conditions of the ProPay Electronic Funds Transfer Agreement. You hereby agree to the terms and conditions of the ProPay Electronic Funds Transfer Agreement as amended from time to time, and which is incorporated into this Agreement by reference as if fully set forth herein.
You may establish and maintain a checking account (“Checking Account”) at the financial institution of your choice to facilitate payment for Card transactions and the transfer of amounts due you from your ProPay Account in accordance with the ProPay Electronic Funds Transfer Agreement. You irrevocably authorize our sponsor banks and us to immediately debit the Checking Account associated with your ProPay Account for the transfer of your funds as established pursuant to the Electronic Funds Transfer Agreement for any and all fraudulent transactions, any negative balance in your ProPay Account, and for fees, other penalties, or any amounts you owe us or our sponsor banks under this Agreement, unless other terms have been agreed upon between us and your Affiliated Company. You agree that our sponsor bank and we shall not incur any liability for any loss, costs, or fees incurred by you that are the result of such debits by us.
20. DISPUTES, INQUIRIES, AND CHARGEBACKS.
We are responsible for handling disputes between you and any Cardholder, inquiries from a Card Brand, credits, and customer service relating to any Card transaction. Customers sometimes dispute transactions, which may lead to Card transactions being reversed, otherwise known as “chargebacks.” You will pay us on demand for the amount of all chargebacks. You accept responsibility for all chargebacks and will be liable to us for the total amount of any sale for which the Cardholder disputes the validity of the sale. You authorize us to offset from incoming transactions and to debit the Member Operating Account, your ProPay Account, and/or the Reserve Account to recover any chargeback. You will fully cooperate with us in complying with the Rules regarding chargebacks. We may suspend the Services and stop releasing funds represented by Card transactions to you until you reimburse us for all unpaid chargebacks. Furthermore, if you are an independent sales consultant you authorize us to report any chargeback not reimbursed by you within 30 days (“Unpaid Chargeback”) to your affiliated company, as applicable. You must not reenter or reprocess any Card transaction that has been charged back. Instead you must allow the chargeback process to proceed to its conclusion as described in each Card Brand’s Rules. If you disagree with a chargeback, the Rules allow you to request a chargeback reversal. A reversal request must be made within the applicable Card Brand’s timeline in its Rules. You will also promptly provide us with any information we request in response to an inquiry from an Card Brand. A Card Brand will make an inquiry when it needs information about a disputed transaction. In order to be able to respond to an inquiry, you need to maintain records and follow business practices that are in accordance with the Rules. Excessive Activity will be a breach of this Agreement. "Excessive Activity" shall mean: chargebacks in excess of .50% of the transaction ratio of your Card transactions; or, chargebacks in excess of .50% of the transaction ratio of the dollar amount of your Card transactions; or, returns in excess of 3% of the transaction ratio of your Card transactions; or, denied transactions in excess of 5% of the transaction ratio of your Card transactions. You authorize, upon the occurrence of Excessive Activity, us to take additional action it deems necessary, including, but not limited to, suspension of processing privileges or creation or maintenance of a Reserve Account in accordance with this Agreement.
21. CUSTOMER CONTACT.
You authorize us to contact your customers or their bank if we determine that such contact is necessary to find out information about any payment transaction between you and the customer. Also, you will provide to us upon our request, contact information for your customers as deemed necessary and reasonable by us.
22. REFUND CREDITS.
You will issue a credit memorandum, instead of making a cash advance, a disbursement, or a refund on any Card transaction. Our sponsor bank will debit from the amounts owing you under your ProPay Account for the total face amount of each credit memorandum submitted. You will not submit a credit relating to any Card transaction not originally submitted to us, nor will you submit a credit that exceeds the amount of the original Card transaction. You will, within the time period specified by applicable law, provide us with a credit memorandum or credit statement for every return of goods or forgiveness of debt for services that were the subject of a Card transaction.
23. USE OF TRADEMARKS.
Your use of Card Brand marks will fully comply with the Rules. Your use of our marks must comply with our policies and instructions. Your right to use our marks and the Card Brand marks will cease upon termination of this Agreement. The Card Brands are the sole and exclusive owners of their marks. We are the sole and exclusive owner of our marks. You agree to not to contest the ownership of the marks for any reason. We may require changes to your website or otherwise that we deem necessary or appropriate to ensure that you remain in compliance with the Rules governing the use of our and the Card Brand trademarks. We may at any time, immediately and without advance notice, prohibit the use any of the trademarks for any reason.
24. INFORMATION SECURITY.
You must keep all systems and media containing account, Cardholder, or transaction information (physical or electronic, including but not limited to account numbers, and card imprints,) in a secure manner, to prevent access by or disclosure to anyone other than your authorized personnel. You must destroy in a manner that will render the data unreadable all such media that you no longer deem necessary or appropriate to store (except for receipts maintained in accordance with this Agreement, Laws, Rules, and Policies). Further, you must take all steps reasonably necessary to ensure Cardholder information is not disclosed or otherwise misused. You may not retain or store magnetic stripe or CVV2, CVC2, or CID data after authorization. You must notify us in the event you use any agent that will have access to Cardholder data. Card Brand regulations mandate that all agents that access, store, transmit, or process Cardholder data must be registered and comply with the established data security standards of PCI DSS and PA-DSS.
If you store Cardholder account numbers, expiration dates, and other personal Cardholder data in a database, you must follow Card Brand guidelines on securing such data. You must, at all times, remain in compliance with the PCI DSS and PA-DSS, as applicable, and as mandated by the Card Brands and our sponsor bank. If you share your ProPay Account password with any third party, we deem that you authorized the action taken by the third party regarding your ProPay Account, whether or not such authority actually exists.
In the event of breach of, intrusion of, compromise of, or otherwise unauthorized access to Cardholder account information which is stored and in the possession of you or your agents, you must immediately notify us and provide us with information relating and pertaining to the type, nature, and extent of Cardholder account information which has been compromised. Further, you must cooperate with us regarding reasonable requests for information and details regarding the compromise of Cardholder account information. You will make all reasonable, good faith efforts to remedy and address the cause of said breach, intrusion, compromise, or otherwise unauthorized access to Cardholder account information. You shall maintain industry "best practices" regarding continuity procedures and systems to ensure security of Cardholder account information in the event of a disruption, disaster, or failure of your respective data storage system and/or facility.
25. THIRD PARTY SERVICE PROVIDERS.
You may be using special services or software provided by a third party to assist you in processing transactions, including authorizations and settlements, or accounting functions. You are responsible for ensuring compliance with the requirements of any third party in using their products. We are not responsible for any transaction until the point in time we receive data about the transaction. We have relationships with the Card Brands to provide the Services. The Card Brands have the right to enforce any provision of the Card Brand Rules and to prohibit you and us from engaging in any conduct that the Card Brands deem could injure or could create a risk of injury to the Card Brands, including injury to reputation, or that could adversely affect the integrity of the interchange system, the Card Brands’ Confidential Information as defined in the Rules, or both. You will not take any action that could interfere with or prevent the exercise of this right by the Card Brands.
26. SECURITY INTEREST, RESERVE, RECOUPMENT, PERSONAL GUARANTEE.
Because we are financially responsible for actions taken by you using the Services, we require certain protective measures as outlined below.
26.a. This Agreement will constitute a security agreement under the Uniform Commercial Code. You grant to us a security interest in and lien upon: (a) all funds representing amounts owing you under this Agreement at any time in the Member Operating Account, regardless of the source of such funds; (b) all funds at any time in the Reserve Account (as defined below), regardless of the source of such funds; (c) present and future Card transactions; and, (d) any amount which may be due to you under this Agreement, including, without limitation all rights to receive any payments or credits under this Agreement (collectively, the "Secured Assets"). You agree to provide other security to us upon request to secure your obligations under this Agreement. These security interests and liens will secure all of your obligations under this Agreement and any other agreements now existing or later entered into between you us including, but not limited to, your obligation to pay any amounts due and owing to us. We may exercise this security interest without notice or demand of any kind by making an immediate withdrawal or freezing of your Secured Assets. Upon our request, you will execute one or more financing statements or other documents to evidence this security interest. You represent and warrant that no other person or entity has a security interest in the Secured Assets. With respect to such security interests and liens, we will have all rights afforded under the Uniform Commercial Code and any other applicable law and in equity. You must obtain from us written consent prior to granting a security interest of any kind in the Secured Assets to a third party. You agree that this is a contract of recoupment. As such, we are not required to file a motion for relief from a bankruptcy action automatic stay to realize on any of the Secured Assets. Nevertheless, you agree not to contest or object to any motion for relief from the automatic stay filed by us. You authorize us and appoint us your attorney in fact to sign your name to any financing statement used for the perfection of any security interest or lien granted hereunder.
26.b. For the purpose of providing a deposit and a source of funds to pay us for amounts owed by you, you shall deposit to an account maintained by us titled to our sponsor banks, initially or at any time in the future, as requested in good faith by us, sums sufficient to satisfy your current and/or future obligations as determined by us (“Reserve Account”). Funds, if any, in the Reserve Account shall remain in the Reserve Account until each of the following has occurred: (a) this Agreement has been terminated; and, (b) you have paid us in full all amounts owing or that could ever be owed under this Agreement, including, without limitation, all outstanding or uncollected amounts and potential chargebacks. Our sponsor banks shall have sole control of the Reserve Account. Our sponsor banks or we may, at any time, require that the amount on deposit in the Reserve Account be increased and shall have sole discretion as to the amount from time to time. In no event shall you be entitled to a return of any sums remaining in the Reserve Account for 270 days following the effective date of termination of this Agreement. We have the right to debit your funds in the Member Operating Account to establish, increase, or maintain funds in the Reserve Account. We may deposit into the Reserve Account funds we would otherwise be obligated to pay you, for the purpose of establishing, increasing, or maintaining the Reserve Account in accordance with this section, if we determine such action is reasonably necessary to protect our interests. You understand and agree that if you are required to establish a Reserve Account, you have an obligation under this Agreement to maintain at all times a balance in the Reserve Account sufficient to protect us against losses resulting from transactions initiated by you. We may, without notice to you, apply funds deposited in your Reserve Account against any outstanding amounts you owe us under this Agreement or any other agreement between you and us. Also, we may debit your Reserve Account to exercise our rights under this Agreement to collect any amounts due to us including, without limitation, rights of set-off and recoupment.
26.c. We have the right of recoupment and set-off. This means that we may offset any outstanding or uncollected amounts owed to us from: (a) any amounts owed to you that we would otherwise be obligated to deposit into the Member Operating Account, (b) any other amounts we may owe you under this Agreement or any other agreement, and (c) the Checking Account which you may have associated with your ProPay Account in accordance with the Electronic Funds Transfer Agreement. You acknowledge that in the event of a bankruptcy proceeding, in order for you to provide adequate protection under Bankruptcy Code § 362 to us, you must create or maintain the Reserve Account as required by us, and we will have the right to offset against the Reserve Account for any and all obligations which you may owe to us, without regard to whether the obligations relate to Card transactions initiated or created before or after the filing of the bankruptcy petition.
26.d. As a primary inducement to us to enter into this Agreement, by electronically signing the Application, you jointly and severally, unconditionally and irrevocably, guarantee the continuing full and faithful performance and payment by you as an individual (“Guarantor”) of each of your duties and obligations to us pursuant to this Agreement, as it now exists or amended from time to time, with or without notice. Guarantor understands further that we may proceed directly against the Guarantor without first exhausting our remedies against any other person or entity responsible to it or any security held by us. This guarantee will not be discharged or affected by the death of the Guarantor, will bind all heirs, administrators, representatives and assigns and may be enforced by or for the benefit of any of our successors. Guarantor understands that the inducement to us to enter into this Agreement is consideration for the guarantee, and that this guarantee remains in full force and affect even if the Guarantor receives no additional benefit from the guaranty.
You are obligated to pay all taxes and other charges imposed by any governmental authority on the Services provided under this Agreement. You understand that this does not obviate your responsibility for your tax liability incurred with the sale of goods or services regarding transaction activity associated with your ProPay Account.
28. REPRESENTATIONS AND WARRANTIES.
You will not sell Card account information, and you will not disclose to any third party Cardholders' account information or other personal information, except to an agent of yours assisting in completing a Card transaction, or as required by law. You will not use for your own purposes, will not disclose to any third party, and will retain in strictest confidence all information and data belonging to or relating to our business (including without limitation the terms of this Agreement), and will safeguard such information and data by using the same degree of care, but no less than a reasonable amount of care, that you use to protect your own confidential information. You authorize us to disclose your name and address to any third party who requests or otherwise has a reason to know such information, and any information we have to law enforcement or as required by the legal process.
You indemnify and hold us and the Card Brands harmless and will defend us for and from any of your acts or omissions with respect to your use of the Services, including funds in the Member Operating Account, and/or Reserve Account. You also indemnify and hold harmless our sponsor bank for acting in accordance with any instruction from you or us regarding your use of the Services. Further, you shall indemnify and hold harmless our sponsor banks, the Card Brands, and us, and their and our employees, officers, directors, shareholders and agents from any and all loss, cost, expense, claim, damage, and liability (including attorneys' fees and costs) paid or incurred by any one or more of them, arising from, caused by, or attributable to, any of the following: (1) any Card transaction processed under this Agreement, (2) any breach by you of this Agreement and those related to any bankruptcy proceeding; (3) willful misconduct, fraud, intentional tort or negligence by you or that of your employees, agents or representatives; (4) theft, embezzlement, or unauthorized use with respect to your ProPay Account; or (5) action by us exercising any right we have under this Agreement, Laws, Rules, or Policies.
31. LIMITATION OF LIABILITY.
Any liability the Card Brands and we have under this Agreement, whether to you or any other party, whatever the basis of the liability, will not exceed in the aggregate the difference between the amount of fees we received from you during the month in which the transaction out of which the liability arose accrued and any assessments, chargebacks, and offsets against such fees which arose during that month. If more than one month is involved, the aggregate amount of the Card Brands and our liability will not exceed the lowest amount determined in accordance with the previous sentence for any one month involved. In no event shall our agents, officers, directors, employees, the Card Brands, or we be liable for indirect, special, or consequential damages.
32. DISCLAIMER OF WARRANTIES.
THE SERVICES ARE PROVIDED “AS IS.” WE MAKE NO WARRANTY, EXPRESS OR IMPLIED, REGARDING THE SERVICES, AND NOTHING CONTAINED IN THIS AGREEMENT WILL CONSTITUTE SUCH A WARRANTY. WE DISCLAIM ALL IMPLIED WARRANTIES AND CONDITIONS, EXPRESS, IMPLIED OR STATUTORY, INCLUDING WITHOUT LIMITATION THOSE OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, THE IMPLIED WARRANTIES OF TITLE AND/OR NON-INFRINGEMENT. WE DO NOT WARRANT THAT THE SERVICES WILL BE UNINTERRUPTED OR ERROR FREE, NOR DO WE MAKE ANY WARRANTY AS TO THE PERFORMANCE OR ANY RESULTS THAT MAY BE OBTAINED BY THE USE OF THE SERVICES. We shall make reasonable efforts to ensure that all transaction requests are processed in a timely manner. However, we make no representations or warranties regarding the amount of time needed to complete processing because the Services are largely dependent upon many factors outside of our control, such as delays in the banking system or the U.S. or international mail service. Some states do not allow the disclaimer of implied warranties, so the foregoing disclaimer may not apply to you. This warranty gives you specific legal rights and you may also have other legal rights that vary from state to state. EACH PARTY ACKNOWLEDGES THAT IT HAS NOT ENTERED INTO THIS AGREEMENT IN RELIANCE UPON ANY WARRANTY OR REPRESENTATION EXCEPT THOSE SPECIFICALLY SET FORTH HEREIN.
33. TERM AND TERMINATION.
This Agreement will become effective on the date accepted by you ("Effective Date") and will remain in effect for the length of the Initial Term selected by you at the time of sign-up ("Initial Term") and is renewable for successive terms the same length as the Initial Term ("Renewal Term"), unless terminated earlier according to this Agreement. You may terminate this Agreement by providing notice of intent not to renew at least 30 days prior to the expiration of the then current term. ProPay enters into this agreement on the expectation that there will be at least 180 days of account activity, therefore in the event that you elect the month-to-month Term and elect to terminate within 180 days of the Effective Date, you agree to pay liquidated damages of $20 at the time of termination to account for revenue lost. You acknowledge that this amount is a genuine pre-estimate of damages and not a penalty. Additionally, we may terminate this Agreement at any time, with or without cause, and without prior notice. Our rights of termination under this Agreement are cumulative. Any provisions of this Agreement that protect our interests and any provisions which by their nature are intended to survive termination of this Agreement shall survive termination of this Agreement.
34. ACTION UPON TERMINATION AND UNCLAIMED PROPERTY.
We are required to report your name to the Card Brands when your ProPay Account is terminated due to the reasons listed in the Rules issued by the applicable Card Brand. You waive and hold us harmless for all claims and liabilities you may raise as a result of such reporting. Upon the expiration of the applicable time period regarding account inactivity as mandated by state law, your ProPay Account will be formally terminated. Thirty (30) days after the termination of your ProPay Account, funds due to you from your ProPay Account, or otherwise in the possession of us and attributable to you, shall be remitted to any state or other governmental body as a result of any unclaimed property or similar laws, subject to a processing fee, or to us if allowed.
35. ACCOUNT INACTIVITY.
Failure to present any transaction for clearing and settlement or failure to add funds or access funds in your ProPay Account by means of a prepaid debit or stored value card, as applicable, or by means of an electronic transfer as defined in the Electronic Funds Transfer Agreement, for the (1) the applicable time period as mandated or allowed by state law, or (2) twenty-four months, whichever is less, may result in your ProPay Account being terminated.
36. IRS REPORTING.
To comply with IRS 1099-K reporting requirements, we may be required to file a form 1099-K with the U.S. Internal Revenue Service (IRS). We may collect 28% federal backup withholding upon transaction settlement, on behalf of the IRS, from you if you do not supply your legal name, SSN or EIN, or if you fail to respond to a request from us to verify the same. All withholdings will be remitted to the IRS as required by law. To avoid potential backup withholdings, you should notify us any time there is a change to your SSN, EIN, legal name, or business address, and ensure you respond to any request for verification and record update from us.
37. RIGHTS AND REMEDIES CUMULATIVE.
The rights conferred upon us, our sponsor banks, and the Card Brands in this Agreement are not intended to be exclusive of each other or of any other rights and remedies we have under this Agreement, at law, or in equity. Rather, each and every right we have at law or in equity will be cumulative and concurrent and in addition to every other right.
38. ENTIRE AGREEMENT.
This Agreement, including, Policies, the completed Application, the Rules, and any amendment or supplement to this Agreement or other referenced agreements, all of which are incorporated into this Agreement, constitutes the entire agreement between the parties, and all prior or other agreements or representations, written or oral, are superseded by this Agreement.
39. GOVERNING LAW, JURISDICTION, WAIVER OF JURY TRIAL.
This Agreement will be governed by and construed in accordance with the laws of the State of Utah, except where Federal law is applicable. YOU AGREE THAT ALL PERFORMANCES AND TRANSACTIONS UNDER THIS AGREEMENT WILL BE DEEMED TO HAVE OCCURRED IN UTAH AND THAT YOUR ENTRY INTO AND PERFORMANCE OF THIS AGREEMENT WILL BE DEEMED TO BE THE TRANSACTION OF BUSINESS WITHIN THE STATE OF UTAH. YOU AND WE CONSENT TO AND AGREE THAT, THE EXCLUSIVE JURISDICTION AND VENUE FOR ANY DISPUTES HEREUNDER SHALL BE AN APPROPRIATE FEDERAL OR STATE COURT LOCATED IN SALT LAKE CITY, UTAH. YOU AND WE WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY ACTION CONCERNING ANY RIGHTS OR DISPUTES UNDER THIS AGREEMENT.
The headings used in this Agreement are inserted for convenience only and will not affect the interpretation of any provision. The language used will be deemed to be the language chosen by the parties to express their mutual intent, and no rule of strict construction will be applied against any party.
This Agreement may be assigned by us, but may not be assigned by you directly or by operation of law, without the prior written consent of us. Any purported assignment without our consent is void. If you sell your business, and the new owners incur chargebacks, the original owner and all original guarantors will be held personally liable for all chargebacks and any other liabilities of the new owners.
42. ELECTRONIC SIGNATURE, COMMUNICATION, AND NOTICES.
Your electronic signature, including, without limitation clicking “Agree and Continue” or an action of similar meaning or significance, shall be the legal equivalent of your manual signature. YOU AGREE TO TERMS OF THE PROPAY ELECTRONIC COMMUNICATIONS AGREEMENT AS AMENDED FROM TIME TO TIME ("E-COMMUNICATIONS AGREEMENT"), WHICH MAY BE OBTAINED UPON REQUEST OR AT: HTTP://WWW.PROPAY.COM/LEGAL-AGREEMENTS/ELECTRONIC-COMMUNICATION-AGREEMENT, AND WHICH IS INCORPORATED INTO THIS AGREEMENT BY REFERENCE AS IF FULLY SET FORTH HEREIN. Any written notice under this Agreement will be deemed given and delivered upon the earlier of: (a) actual receipt, (b) five days after being deposited in the United States mail, and addressed, if to us, to: ProPay, Inc., 3400 N Ashton Blvd, Suite 200, Lehi, UT 84043, and if to you: to the last address shown on our records, or (c) one business day after being sent by email or other electronic communication if to you at the last email address provided by you to us and if to ProPay at http://www.propay.com/propay-company/contact-propay/. Additionally, updates and changes published to our website constitute notice to you as of the date of publication.
You will immediately notify us of any bankruptcy, receivership, insolvency or similar action or proceeding initiated by or against you. You will include us on the list and matrix of creditors as filed with the Bankruptcy Court, whether or not a claim may exist at the time of filing, and failure to do so will be cause for immediate termination or any other action available to us under applicable Rules or Law. You acknowledge that this Agreement constitutes an executory contract to make a loan, or extend other debt financing or financial accommodations to or for the benefit of you, and, as such, cannot be assumed or assigned in the event of your bankruptcy.
44. ATTORNEYS' FEES.
You will be liable for and will indemnify and reimburse us for all attorneys' fees, with our without suit, court costs, collection agency fees (not to exceed 50% of the amount owed), and other costs and expenses paid or incurred by us in the enforcement of this Agreement, or in collecting any amounts due from you to us or resulting from any breach by you of this Agreement.
This Agreement and the Policies referenced and incorporated in this Agreement may be amended, modified, or revised at any time without notice. While we may notify you as the Agreement or Policies are modified, it is your sole responsibility to review and maintain familiarity with the Agreement and Policies, including any changes that may be made to these documents, respectively, from time to time thereto, and you are bound by any changes. The amendments to this Agreement and/or Policies referenced herein will become effective and binding upon you immediately and contemporaneously as the amendments are published to our website (www.propay.com). In the event you do not agree to the aforementioned amendments and do not wish to be bound the terms and conditions thereto, you shall provide written notice to us (including by submitting to ProPay Customer Service at http://www.propay.com/propay-company/contact-propay/) by providing your name, your current email address on file with us, the last four (4) digits of your Social Security Number and a statement that you do not agree to the terms. If you do not agree to the terms of the amendment, your account will be terminated and closed. Notwithstanding the foregoing, changes to fees authorized by this Agreement will be effective upon the giving of notice to you and any fee increase, change in Rules, or other requirement imposed by Card Brands may be passed on to you and will be effective upon the giving of notice to you.
46. SEVERABILITY AND WAIVER.
If any provision of this Agreement is held invalid, illegal, void, or unenforceable by reason of any judicial decision, all other provisions of this Agreement shall nevertheless remain in full force and effect. No course of dealing, delay, or failure to enforce any provision or exercise any right under this Agreement by us shall be construed as a waiver or estoppel of such provision or right, nor shall it amend this Agreement or affect the validity of this Agreement or curtain our ability to enforce such provision or exercise such right in the future. All waivers must be in writing and signed by us.
47. AGENCY RELATIONSHIP.
You authorize us with respect to the Services to act as your agent for the limited purposes of holding, receiving, and disbursing funds on your behalf. Your authorization permits us to generate an electronic funds transfer to process each payment transaction. This authorization will continue until your ProPay account is closed or terminated. You agree that our receipt of transaction proceeds satisfies your customers’ obligations to you. We will remit to you funds actually received by us on your behalf, less amounts owed to us, subject to any chargebacks or reserve withheld or applied as per this agreement.
48. FORCE MAJEURE.
No party will be liable to the other party for any failure or delay in its performance of this Agreement if such failure or delay arises out of causes beyond the control and without the fault or negligence of such party.
Notwithstanding anything in this Agreement to the contrary, we may require that any claim or dispute under this Agreement ("Dispute") be resolved exclusively and finally by binding arbitration, administered by the National Arbitration Forum ("NAF") and conducted under its rules, except as otherwise provided below. For the purposes of this section, "Dispute" means any dispute, controversy, or claim arising out of or relating to this Agreement, negotiations leading to the Agreement, its interpretation, any act of any party related to the Agreement, or the breach, termination, applicability, or validity thereof. The arbitration will be conducted before a single arbitrator, and will be limited to our Dispute with you. You may not bring a Dispute on behalf of others or join others in any similar claims (you may not bring or participate in a class action). As the parties to the Dispute agree, the arbitration shall be held in Utah by submission of documents, by telephone, online, or in person. Any decision rendered in such arbitration proceedings shall be final and binding on each of the parties to the Dispute and judgment may be entered thereon in any court of competent jurisdiction. Should any party bring a Dispute in a forum other than NAF, the arbitrator may award the other party or parties their reasonable costs and expenses, including actual attorneys' fees, incurred in staying or dismissing such other proceedings or in otherwise enforcing compliance with this dispute resolution provision. You understand that you would have had a right to litigate disputes through a court, and that you have expressly and knowingly waived that right and agreed to resolve any Dispute through binding arbitration. The parties intend that the Federal Arbitration Act (9 U.S.C. §§ 1 et seq.) shall govern this arbitration provision. Information on arbitration procedure may be obtained from the NAF on-line at www.arb-forum.com, by calling 800-474-2371 or by writing to P.O. Box 50191, Minneapolis, MN, 55405.
50. PROCESSING ACH (IF APPROVED BY PROPAY).
If approved by ProPay, you may accept payment via automated clearing house transactions (“ACH”) from your customers. You must comply with the National Automated Clearing House Association ("NACHA") rules. Copies of the NACHA Operating Rules and Guidelines are available for review online at www.achrulesonline.org. You must not accept ACH transactions for donations from Pennsylvania residents for non-profits, religious organizations, charities and political campaigns. You must not request an ACH transfer that violates the Rules or Laws. You agree not to initiate any ACH debits or credits to or from a savings account, or a foreign bank or the branch of a foreign bank in a U.S. territory. The term foreign bank does not include: (i) A U.S. agency or branch of a foreign bank; and (ii) An insured bank organized under the laws of a U.S. territory. To enable you to make and accept ACH payments, you authorize us to originate credit or debit records for the purpose of a funds transfer (“Entries”) into the ACH network. We will use reasonable efforts to originate Entries on your behalf in accordance with this Agreement. You must only submit Entries for bona fide transactions with your customers made in the ordinary course of business in accordance with this Agreement, the Rules, and Laws. You shall obtain and maintain appropriate authorizations in accordance with the Rules from each of your customers for each ACH transaction. All disputes between you and any of your customers relating to any ACH transaction must be resolved between you and that customer. If ProPay receives any notice of an ACH dispute or NACHA inquiry, we will forward such notice directly to you. ProPay bears no financial responsibility for any disputed transaction. You must maintain an unauthorized return rate, as described in the NACHA Regulations, below 0.5% of originating debits.
Important Note: The following sections apply only if you accept American Express Cards. If there is a conflict between any of the following sections and any other section of this agreement as it applies to American Express Cards, the following sections will govern.
51. INDUSTRY-SPECIFIC REQUIREMENTS.
Section 12 of the American Express Merchant Reference Guide – US contains an overview of the policies and procedures you must follow if your business is certain industries, for example, apartment rentals, automobile industry, travel industries. It is your responsibility to familiarize yourself with and adhere to the applicable requirements of section 12 of the American Express Merchant Reference Guide - US.
52. CUSTOMER SERVICE INFORMATION.
You must maintain customer service information that is readily available for review by American Express Cardholders transacting with you. The customer service information should provide clear instructions on how to contact you, including an active customer service email address and telephone number.
53. THIRD-PARTY BENEFICIARY.
You understand and covenant that you are not a third-party beneficiary under our agreement with American Express, including all schedules and exhibits, or the American Express Rules. You acknowledge and agree that American Express is a third-party beneficiary under this Agreement between you and ProPay. This means American Express has the rights, but not the obligation, to enforce the terms of this Agreement against you.
You authorize us to submit American Express Card transactions to, and receive payment from, American Express on your behalf. You authorize us to disclose Card transaction data and data about you to American Express, its affiliates, agents, subcontractors, and employees, and further authorize these entities to use such information to perform services, operate and promote the American Express network, perform analytics and create reports, and for any other lawful business purpose, including as described in the American Express Rules. You authorize American Express to use your name, address, and website address in any media.
55. REFUND POLICY.
Your refund policy for purchases made with an American Express Card must be at least as favorable as your refund policy for purchases made with any other Cards. Your refund policy must be disclosed to Cardholders at the time of purchase and must be in compliance with the Rules and Laws.
56. ARBITRATION AGREEMENT (AS TO CLAIMS INVOLVING AMERICAN EXPRESS.
If you or ProPay is not able to resolve a Claim against American Express, or a Claim against ProPay or any other entity that American Express has a right to join, this section explains how Claims may be resolved through arbitration. You or American Express may elect to resolve any Claim by binding individual arbitration.
Claims will be decided by a neutral arbitrator. If arbitration is elected by any party, neither you nor ProPay nor American Express will have the right to litigate or have a jury trial on that Claim in court. Further, you, we, and American Express will not have the right to participate in a class action or in a representative capacity or in a group of persons alleged to be similarly situated pertaining to any Claim subject to arbitration under this Agreement. Arbitration procedures are generally simpler than the rules in court. An arbitrator's decisions are final and binding, and the arbitrator's final decision on a Claim generally is enforceable as a court order with very limited review by a court. Other rights you, we, or American Express would have in court may also not be available in arbitration.
i. Initiation of Arbitration. Claims may be referred to either JAMS or AAA, as selected by the party electing arbitration. Claims will be resolved pursuant to this section 56 and the selected organization's rules in effect when the Claim is filed, except where those rules conflict with this Agreement. Contact JAMS or AAA to begin an arbitration or for other information. Claims may be referred to another arbitration organization if all parties agree in writing, if American Express selects the organization and you select the other within 30 days thereafter or if an arbitrator is appointed pursuant to section 5 of the Federal Arbitration Act, 9 U.S.C. §§ 1-16 (FAA). Any arbitration hearing will take place in the federal judicial district where your headquarters is located or New York, NY, at your election.
ii. Limitations on Arbitration. If any party elects to resolve a Claim by arbitration, that Claim will be arbitrated on an individual basis. No Claim is to be arbitrated on a class or purported representative basis or on behalf of the general public or other persons allegedly similarly situated. The arbitrator's authority is limited to Claims between you, ProPay, and American Express. An arbitration award and any judgment confirming it will apply only to the specific case brought by you, ProPay or American Express and cannot be used in any other case except to enforce the award as between you, ProPay and American Express. This prohibition is intended to, and does, preclude you from participating in any action by any trade Card Brand or other organization against American Express. Notwithstanding any other provision in this Agreement, if any portion of these Limitations on Arbitration is found invalid or unenforceable, then the entire section 56 (other than this sentence) will not apply, except that you, ProPay, and American Express do not waive the right to appeal that decision.
iii. Previously Filed Claims/No Waiver. You, ProPay, or American Express may elect to arbitrate any Claim that has been filed in court at any time before trial has begun or final judgment has been entered on the Claim. You, ProPay, or American Express may choose to delay enforcing or to not exercise rights under this section 56, including the right to elect to arbitrate a Claim, without waiving the right to exercise or enforce those rights on any other occasion. For the avoidance of any confusion, and not to limit its scope, this section applies to any class-action lawsuit relating to the "Honor All Cards," "non-discrimination," or "no steering" provisions of the American Express Merchant Regulations, or any similar provisions of any prior American Express Card acceptance agreement, that was filed against American Express prior to the effective date of the Agreement to the extent that such claims are not already subject to arbitration pursuant to a prior agreement between Merchant and American Express.
iv. Arbitrator's Authority. The arbitrator will have the power and authority to award any relief that would have been available in court and that is authorized under this Agreement. The arbitrator has no power or authority to alter the Agreement or any of its separate provisions, including this section 56.
v. Split Proceedings for Equitable Relief. You, ProPay, or American Express may seek equitable relief in aid of arbitration prior to arbitration on the merits if necessary to pre-serve the status quo pending completion of the arbitration. This paragraph shall be enforced by any court of competent jurisdiction, and the party seeking enforcement is entitled to seek an award of reasonable attorneys' fees and costs to be paid by the party against whom enforcement is ordered.
vi. Small Claims. American Express will not elect arbitration for any Claim you properly file in a small claims court so long as the Claim seeks individual relief only and is pending only in that court.
vii. Governing Law/Arbitration Procedures/Entry of Judgment. The arbitration agreement in this section 56 is made pursuant to a transaction involving interstate commerce and is governed by the FAA. The arbitrator shall apply New York law and applicable statutes of limitations and honor claims of privilege recognized by law. The arbitrator shall apply the rules of the arbitration organization selected, as applicable to matters relating to evidence and discovery, not federal or any state rules of procedure or evidence, provided that any party may ask the arbitrator to expand discovery by making a written request, to which the other parties will have 15 days to respond before the arbitrator rules on the request. If your Claim is for $10,000 or less, you may choose whether the arbitration will be conducted solely based on documents submitted to the arbitrator, through a telephonic hearing, or by an in-person hearing under the rules of the selected arbitration organization. At the timely request of a party, the arbitrator will provide a written opinion explaining his/her award. The arbitrator's decision will be final and binding, except for any rights of appeal provided by the FAA. Judgment on an award rendered by the arbitrator may be entered in any state or federal court in the federal judicial district where your headquarters or your assets are located.
viii. Confidentiality. The arbitration proceeding and all information submitted, relating to or presented in connection with or during the proceeding, shall be deemed confidential information not to be disclosed to any person not a party to the arbitration. All communications, whether written or oral, made in the course of or in connection with the Claim and its resolution, by or on behalf of any party or by the arbitrator or a mediator, including any arbitration award or judgment related thereto, are confidential and inadmissible for any purpose, including impeachment or estoppel, in any other litigation or proceeding; provided, however, that evidence shall not be rendered inadmissible or non-discoverable solely as a result of its use in the arbitration.
ix. Costs of Arbitration Proceedings. You will be responsible for paying your share of any arbitration fees (including filing, administrative, hearing or other fees), but only up to the amount of the filing fees you would have incurred if you had brought a claim in court. American Express will be responsible for any additional arbitration fees. At your written request, American Express will consider in good faith making a temporary advance of your share of any arbitration fees, or paying for the reasonable fees of an expert appointed by the arbitrator for good cause.
x. Additional Arbitration Awards. If the arbitrator rules in your favor against American Express for an amount greater than any final settlement offer American Express made before arbitration, the arbitrator's award will include: (1) any money to which you are entitled as determined by the arbitrator, but in no case less than $5,000; and (2) any reasonable attorneys' fees, costs and expert and other witness fees incurred by you.
xi. Definitions. For purposes of this section 56 only, (i) American Express includes its affiliates, licensees, predecessors, successors, or assigns, any purchasers of any receivables, and all agents, directors, and representatives of any of the foregoing, (ii) you includes your affiliates, licensees, predecessors, successors, or assigns, any purchasers of any receivables and all agents, directors, and representatives of any of the foregoing, and (iii) Claim means any allegation of an entitlement to relief, whether damages, injunctive or any other form of relief, against American Express or against ProPay or any other entity that American Express has the right to join, including, a transaction using an American Express product or network or regarding an American Express policy or procedure.
57. AMERICAN EXPRESS CARD ACCEPTANCE (BRAND) REQUIREMENTS.
You must accept the American Express Card as payment for goods and services (other than those goods and services prohibited under American Express Rules, section 3.3, “prohibited uses of the Card”) sold, or (if applicable) for charitable contributions made, at all of your Establishments, except as expressly permitted by state statute. You are jointly and severally liable for the obligations of your Establishments under the Agreement.
Except as expressly permitted by Law, you must not: indicate or imply that you prefer, directly or indirectly, any Other Payment Products over the American Express Card; try to dissuade American Express Cardholders from using the American Express Card; criticize or mischaracterize the American Express Card or any of American Express’s services or programs; try to persuade or prompt American Express Cardholders to use any Other Payment Products or any other method of payment (e.g., payment by check); impose any restrictions, conditions, disadvantages or fees when the American Express Card is accepted that are not imposed equally on all Other Payment Products, except for electronic funds transfer, or cash and check; suggest or require American Express Cardholders to waive their right to dispute any transaction; engage in activities that harm American Express’s business or the American Express Brand (or both); promote any Other Payment Products (except your own private label card that you issue for use solely at your Establishments) more actively than you promote the American Express Card; or convert the currency of the original sale gransaction to another currency when requesting authorization or submitting transactions (or both).
You may offer discounts or in-kind incentives from your regular prices for payments in cash, ACH funds transfer, check, debit card or credit/charge card, provided that (to the extent required by Law): (i) you clearly and conspicuously disclose the terms of the discount or in-kind incentive to your customers, (ii) the discount or in-kind incentive is offered to all of your prospective customers, and (iii) the discount or in-kind incentive does not differentiate on the basis of the issuer or, except as expressly permitted by applicable state statute, payment card network (e.g., Visa, MasterCard, Discover, JCB, American Express). The offering of discounts or in-kind incentives in compliance with the terms of this paragraph will not constitute a violation of the provisions set forth above in this section 56.
Whenever payment methods are communicated to customers, or when customers ask what payments are accepted, you must indicate your acceptance of the American Express Card and display American Express’s Marks (including any American Express Card application forms you may provide receive) as prominently and in the same manner as any Other Payment Products. You must not use American Express’s Marks in any way that injures or diminishes the goodwill associated with the Mark, nor in any way (without American Express’s prior written consent) indicate that American Express endorses your goods or services. You shall only use American Express’s Marks as permitted by the Agreement and shall cease using American Express’s Marks upon termination of the Agreement.
Any and all American Express Cardholder Information is confidential and the sole property of the Issuer, American Express or its affiliates. Except as otherwise specified, you must not disclose American Express Cardholder Information, nor use nor store it, other than to facilitate Transactions at your Establishments in accordance with the Agreement.
Definitions. For purposes of this section 56 only, (i) American Express Brand means the American Express name, trademarks, service marks, logos, and other proprietary designs and designations and the imagery owned by American Express or an American Express affiliate and the goodwill associated with all of the foregoing and with all the goods and services now and in the future provided, marketed, offered, or promoted by American Express or an American Express affiliate; (ii) Cardholder Information means any information about American Express Cardholders and transactions, including, but not limited to, transaction data, and Cardholder name, addresses, Card numbers, and Card identification (CIDs) numbers; (iii) Establishment means any or all of your and your affiliates' locations, outlets, websites, online networks, and all other methods for selling goods and services, including methods that you adopt in the future; (iv) Issuer means any entity (including American Express and its affiliates) licensed by American Express or an American Express affiliate to issue American Express Cards and to engage in the Card issuing business; (v) Marks means American Express names, logos, service marks, trademarks, trade names, taglines, or other proprietary designs or designations; (vi) Other Payment Products means any charge, credit, debit, stored value, prepaid, or smart cards, account access devices, or other payment cards, services, or products other than the American Express Card.
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