Last updated: June 9, 2021
These merchant services terms
and conditions (“Terms and Conditions”) are for merchant card payment
processing services among the merchant (“Merchant”) that signed the merchant services
application (“Merchant Application”), Wells Fargo
Bank, N.A. (“Member
and ProPay, Inc. (“ProPay”). The
Merchant Application and the Terms and Conditions are part of the “Merchant
Agreement” as defined below. Subject to Card Brand Rules (defined
below) , ProPay and Member Bank reserve the right to allocate duties and
obligations amongst themselves as they agree appropriate in their sole
discretion, and Member Bank or ProPay may jointly or individually assert or
exercise any rights or remedies provided hereunder. If Merchant wishes to
address any act or omission by, or make or bring any claim or action against, Member
Bank or ProPay relating to this Merchant Agreement, it shall first discuss such
issue with ProPay prior to making or bringing any claim or action against
Member Bank (in which case ProPay shall address the issue as agreed with Member
Bank). Member Bank is responsible for sponsoring Merchant with Visa and
Mastercard, and for settlement of Merchant sales funds. Unless otherwise
noted, all other products, services and obligations to Merchant are the sole
responsibility of ProPay.
Member Bank, as a member of
Visa® U.S.A. Inc. (“Visa”) and Mastercard®
International Incorporated (“Mastercard”), provides transaction processing and other services and
products in connection with financial services provided by Visa and Mastercard.
ProPay provides transaction processing and other services and products in
connection with financial services provided by American Express®
Travel Related Services Company, Inc. (“American Express”), and DFS Services LLC (“Discover”) . If Merchant elects and is approved to participate in the
American Express OptBlue Program, Merchant agrees to comply with the American
Express OptBlue Merchant Operating Guide, which may be accessed at www.americanexpress.com/merchantopguide. Visa, Mastercard, American
Express, and Discover are collectively defined as the “Card Brands” and their cards are each
a “Card”. If elected by Merchant, ProPay will settle American Express
and Discover transactions. Member Bank does not sponsor ProPay into the
American Express network and Discover network, is not providing or agreeing to
provide Merchant any services hereunder with respect to American Express and
Discover transactions, and has no responsibility or liability to Merchant for
American Express and Discover transactions.
ProPay, as an agent of Member
Bank, provides payment card processing services. Merchant is engaged in the
business of selling goods and services, and desires that ProPay and Member Bank
provide the services described in the Merchant Agreement (the “Merchant Services”) on the terms and
conditions of this Merchant Agreement.
APPLICATION AND INFORMATION. By completing the Merchant Application, Merchant
applies for the Merchant Services. In their sole and absolute discretion,
ProPay and/or Member Bank may accept or reject Merchant’s Application. Merchant
may present Transactions to ProPay only for the activities and in the volumes
described on the Merchant Application. “Transaction” means a purchase by Card of goods or services
from Merchant or a refund by Merchant to a Card done through Merchant Services.
The earlier date of the presentation of the first Transaction, including any
test Transaction, by Merchant to ProPay or the date ProPay approves the
Merchant Application signifies the effective date of the Merchant Agreement (“Effective
Date”). By either Merchant’s signature on the Merchant Application or
Merchant’s processing a Transaction (including a test Transaction) with ProPay,
Merchant affirmatively accepts and agrees to be bound by the Merchant Agreement.
If Merchant fails to submit Transactions for processing within 120 days after
the Effective Date for any reason other than ProPay’s failure to perform its
obligations under the Merchant Agreement, then Merchant shall pay to ProPay as
damages (and not as a penalty) $100 for each 30 day period in which Merchant
processes no Transactions. Damages shall begin accruing as of the 121st day
following the Effective Date and shall stop accruing as soon as Merchant begins
processing Transactions under this Merchant Agreement.
AGREEMENT; INCORPORATION OF ADDITIONAL TERMS AND PROVISIONS.
exhibits to these Terms and Conditions, as amended from time to time, are part
of these Terms and Conditions, as are the Merchant Application, fee schedule,
and the Card Brand Rules, and are hereinafter individually and collectively
referred to as the “Merchant Agreement.” “Card Brand Rules” means
the by-laws, operating regulations, rules, policies, and procedures of the Card
Brands, as in effect from time to time. Without limiting the foregoing, this
Agreement includes the provisions required by: (a) the Visa International
Operating Regulations relating to the Merchant Chargeback Monitoring Program,
the Merchant Agreement Requirements, and Merchant Card Acceptance (the “Visa Regulations”); and (b) section 5.1 and
sections 5.6 through 5.12 of the Mastercard Rules (the “Mastercard Rules”); and (c) chapter 4,
“transaction processing”, chapter 11, “chargebacks and inquiries,” and chapter
12, “specific industries” of the American Express Merchant Operating Guide, and
Exhibit C “American Express Card Acceptance”. Copies of the Visa Regulations (http://corporate.visa.com/about-visa/our-business/operating-regulations.shtml) and the Mastercard Rules
(http://www.Mastercard.com/us/merchant/pdf/BM-Entire_Manual_public.pdf) are available for review
online. The American Express Merchant Operating Guide, which is a summary of
the above-referenced American Express regulations, is available at www.americanexpress.com/merchantopguide. Merchant shall
periodically review the contents of the Card Brand Rules to ensure it remains
in compliance with them.
following documents (as found at https://www.propay.com/us/legal, as may be amended from time to
time by ProPay with or without prior notice to Merchant) are incorporated into
Electronic Communication Agreement; (d) the Electronic Funds Transfer Agreement;
and (e) the ProPay High Risk Acceptable Use Policy. Violation of any of the
foregoing may result in any one or more of the following: (i) refusal of an
authorization to process Transactions; (ii) suspension of the Merchant
Services; and/or (iii) immediate termination of this Merchant Agreement.
accepting Cards for the purchase of Merchant’s goods or services, Merchant
shall comply with the requirements of the Merchant Agreement, including but not
limited to the Card Brand Rules, as the same are revised from time to time.
of Valid Transactions.
(a) Merchant will submit to ProPay
a Transaction only if the Transaction is made or approved by the cardholder who
is issued the Card used for the Transaction. The burden
of verifying the identity of the cardholder and the cardholder’s authority to
initiate a Transaction rests solely with Merchant. Merchant will not
submit directly or indirectly: (i) any Transaction that Merchant knows or
should have known to be fraudulent or not authorized by the cardholder; (ii)
any Transaction that results from a transaction outside of Merchant’s normal
course of business, as described on the Merchant Application; or (iii) any
Transaction using a Card issued to Merchant or Merchant’s business owners,
family members, or principals.
(b) If at any time the volume
of Transactions substantially exceeds or decreases from the projected annual
volume stated on the Merchant Application, or if at any time ProPay suspects
fraud, money laundering or violations of the Card Brand Rules, ProPay may, in
its sole and absolute discretion and in addition to other remedies that the ProPay
may have: (i) refuse to process the excessive or suspect Transactions; (ii)
process the Transactions and retain the funds received from processing until
such time as the excess or suspect Transactions are found to be valid or
invalid and processed in accordance with the Card Brand Rules; (iii) suspend
processing and/or terminate the Agreement; or (iv) amend the Merchant Agreement
to protect the interests of ProPay.
to Merchant for Valid Transactions.
(a) Member Bank and ProPay will
provide provisional credit to Merchant for each undisputed and valid
Transaction that Merchant submits to ProPay by crediting Merchant’s ProPay
Account, provided Member Bank and ProPay have received settlement for the valid
Transaction through the interchange procedures specified by the relevant Card Brand.
Member Bank and ProPay are not obligated to provide provisional credit to
Merchant for Transactions submitted that are not valid Transactions, and may
suspend or discontinue any provisional credit in Member Bank’s and/or ProPay’s
sole and absolute discretion, including for any reason that would justify
termination of the Merchant Agreement. Each provisional credit from Member Bank
and ProPay to Merchant will be subject to adjustment, including revocation,
upon ProPay’s further review and verification. Provisional credit to
Merchant for a Transaction disputed by a cardholder for any reason is not
(b) Member Bank is responsible
for providing settlement funds to Merchant, and ProPay shall not have access to
or hold settlement funds. Member Bank deposits Transaction proceeds into a
non-interest-bearing, aggregated account at Member Bank in the name of Member
Bank for the benefit of all ProPay’s merchant customers. The subaccount shown
in ProPay’s software for tracking Merchant’s funds in the aggregated account is
Merchant’s “ProPay Account”. Merchant’s ProPay Account is not an actual
account at Member Bank. Funds will remain in the Merchant’s ProPay Account
until: (i) such funds are released by Merchant at its discretion, as evidenced
on ProPay's website; or (ii) Merchant informs ProPay to release such funds to
the bank account designated by Merchant in accordance with the Electronic Funds
Transfer (“Designated Account”).
(c) Merchant may utilize
multiple ProPay Accounts to allow for easier reporting of Transactions. Such additional
ProPay Accounts require approval by ProPay and are subject to the terms of this
Merchant Agreement. Merchant is responsible for any additional fees or costs
associated with having multiple ProPay Accounts. These additional ProPay
Accounts collectively count toward underwriting limits for Merchant, as such
collective limits are established by Member Bank.
(d) Merchant will promptly
provide ProPay or Member Bank with any information it requests in response to
an inquiry from a Card Brand. A Card Brand may make an inquiry when it needs
information about a disputed Transaction. In order to be able to respond to an
inquiry, Merchant must maintain records and follow business practices that are
in accordance with the Card Brand Rules.
(e) “Chargeback” means a
Transaction returned by a Card issuer to Member Bank. Merchant must not reenter
or reprocess any Transaction that has been charged back. Instead Merchant must
allow the Chargeback process to proceed to its conclusion. If Merchant
disagrees with a Chargeback, Merchant may make a reversal request pursuant to
applicable Card Brand Rules. Merchant acknowledges that regardless of its
refund or return policy, Chargebacks will be handled in accordance with this
Merchant Agreement and Card Brand Rules regarding returns and Chargebacks. Merchant
is liable to ProPay and Member Bank for the amount of all Chargebacks, Card
Brand fines, and associated fees. Merchant authorizes ProPay and Member Bank to deduct,
recoup, or offset from incoming Transactions and to debit Merchant’s ProPay
Account, the Merchant Reserve Account, and the Billing Reserve described below
to recover any Chargeback. Member Bank may suspend accepting Transactions or
releasing funds represented by Transactions to Merchant until Merchant
reimburses Member Bank for all unpaid Chargebacks.
(f) Merchant is liable to ProPay
and Member Bank for the amount by which credit Transactions processed on any day exceed valid
Transactions submitted on that day. ProPay and Member Bank may deduct the
amount of any credit Transaction processed for Merchant in the same manner as
it would a Chargeback.
Restrictions. Merchant may not (i)
indicate or imply that the Card Brands, ProPay or Member Bank endorses any
Merchant goods or services, (ii) refer to a Card Brand, ProPay or Member Bank
in stating eligibility for Merchant’s products, services or membership, or
(iii) use any marks, symbols or logos owned by any Card Brand, ProPay or Member
Bank for any purpose other than those permitted in the Card Brand Rules,
provided that any use of ProPay or Member Bank’s marks, symbols or logos shall
be in accordance with and subject to any branding guidelines provided by ProPay
or Member Bank. Merchant acknowledges that Member Bank and ProPay shall remain
the sole and exclusive owners of their respective intellectual property and
Confidential Information (defined below). Except to the extent expressly
provided herein, no rights to ProPay or Member Bank’s intellectual property or
Confidential Information are granted hereunder, and all rights therein are
with and without ProtectPay
(a) It is highly recommended that Merchant obtain the CVV2, CVC2 or
CID information, as applicable, from each Card. However, Merchant must never
store this value permanently. Merchant
shall not submit an authorization on behalf of any third party.
(b) When a Merchant runs Transactions through ProPay’s
ProtectPay service, it is recommended that Merchant identify the cardholder
accepting payment for goods or services. When expiration
date is not stored in ProtectPay, Merchant must obtain the Card expiration
date and forward it to ProPay as part of the authorization request.
(c) When Merchant does not run Transactions
through ProtectPay, Merchant shall obtain (using equipment meeting
specifications determined by ProPay) an authorization for each Transaction in
accordance with the terms of exhibit A.
Upon signing the Merchant Application, and each time Merchant submits a
Transaction, Merchant represents and warrants that:
has abided by the Merchant Agreement, and all applicable laws and the Card
statement made on the Merchant Application was true as of the date Merchant
signed the Merchant Application agreeing to be bound by the Merchant Agreement;
have been no materially adverse changes in information provided in the Merchant
Application or in Merchant’s financial condition, or management;
does not do business under a trade name or style not previously disclosed in
writing, and there has been no change in the nature of Merchant’s business or
product lines that have not been previously disclosed to ProPay and Member Bank;
Transaction is genuine and arises from a bona fide sale of merchandise or
services by Merchant, represents a valid obligation for the amount shown on the
Transaction receipt, and does not involve the use of the Card for any other
has title to the Transaction and Transaction receipt, there are no liens or
other encumbrances on it, and Merchant has the authority to convey the
Transaction for processing;
Transaction is subject to any set-off or counterclaim;
Transaction has been previously presented for processing unless allowed by the Card
statement on the Transaction receipt is true, and Merchant has no knowledge of
facts that would impair the validity or collectability of the amount of the
4.10. The person who executes the
Merchant Application on behalf of Merchant has the full power and authority to
execute the Merchant Application and to enter into the Merchant Agreement;
4.11. The Merchant Agreement is a
legal, valid, and binding obligation of Merchant enforceable against Merchant
in accordance with its terms;
4.12. Merchant shall submit
Transactions only in accordance with the information contained in the Merchant
Application and the Merchant Agreement;
4.13. Merchant has the power and
authority to authorize the automatic funds transfer provided for in the
4.14. The Designated Account is
owned and controlled by Merchant and will be open at all times during the Term
and as long as the Merchant Reserve Account and Billing Reserve (as described
below) are in effect;
4.15. Merchant is not (a) a
sanctioned person, (b) located in or operating under a license issued by a
jurisdiction whose government has been identified by the U.S. Department of
State as a sponsor of international terrorism under 22 U.S.C. 2371 or 50 U.S.C.
App. 2405(j), (c) located in or operating under a license issued by a
jurisdiction that has been designated as non-cooperative with international
anti-money laundering principles or procedures by an intergovernmental group or
organization of which the U.S. is a member, or (d) located in or operating
under a license issued by a jurisdiction that has been designated by the U.S.
Secretary of Treasury pursuant to 31 U.S.C. 5318A as warranting special
measures due to money laundering concerns;
4.16. Merchant will immediately
notify Member Bank and ProPay in writing of any material changes to any
information provided herein including but not limited to a change in Merchant’s
legal entity, location, business type, or the types of goods and/or services
offered for sale by Merchant;
4.17. There is no action, suit or
proceeding pending or, to Merchant’s knowledge, threatened that, if decided
adversely, would materially impair Merchant’s financial condition or
operations, or its ability to perform its obligations under this Merchant
Agreement, or pay its debts;
4.18. Merchant complies fully
with the High Risk Acceptable Use Policy; and
4.19. Merchant shall ensure that
only authorized individuals access Merchant’s ProPay Account to, among other
things, effect transfers of funds to and/or from such account. Merchant shall
be solely responsible for any loss that arises out of any unauthorized
individual gaining access to Merchant’s ProPay Account using Merchant’s ID
number and PIN, and shall indemnify, defend and hold ProPay and Member Bank
harmless from and against any such loss, unless such unauthorized access is
solely the fault of ProPay or Member Bank.
will treat as confidential: (a) the terms of the Merchant Agreement; (b) all
information or data, of whatever nature, relating to ProPay (including its
operations, policies, procedures, accounts and personnel) accessed or used by
or disclosed to Merchant in connection with the Merchant Agreement; (c) ProPay’s
IRS W-9 form; and (d) all information or data that is proprietary to a third
party (including ProPay’s customers and contractors) and that ProPay is
obligated to treat as confidential, accessed or used by or disclosed to
Merchant in connection with the Merchant Agreement (individually and
collectively, “Confidential Information”). Merchant shall not use or
disclose Confidential Information without ProPay’s prior written consent. Merchant
may only disclose Confidential Information to Merchant employees who have a
need to know such information in connection with Merchant’s performance
hereunder and who are bound to confidentiality restrictions no less restrictive
than those herein. Merchant shall exercise at least the same degree of care to
maintain the confidentiality of Confidential Information that it uses for its
own similar information, but in no event less than a reasonable degree of care.
The foregoing obligations shall not apply to any information that (i) is
received from any third party source that is properly authorized to disclose it
without restriction, (ii) is or becomes generally known to the public by
publication or some other means other than a breach by Merchant or its
employees of any agreement or confidentiality obligations, or (iii) is required
by law to be divulged, provided that the request is proper and the disclosure
does not exceed that which is required. In the case of (iii), Merchant will
provide prior notice thereof and cooperate with ProPay to limit disclosure. Upon
ProPay’s request, and upon termination or expiration of the Merchant Agreement,
Merchant shall return or, only if requested by Propay, destroy all Confidential
Information in its possession or control. Merchant acknowledges that a breach
of this section 5 may cause ProPay irreparable injury and that ProPay may have
no adequate remedy at law. Accordingly, ProPay may seek provisional or
injunctive relief in addition to any other rights or remedies.
means a third-party agent that: (a) is
engaged by a Merchant; (b) is not a member of the Card Brands; and (c) has
access to cardholder data, or processes, stores, or transmits Transaction data.
notify ProPay and receive ProPay’s approval prior to engaging any Merchant
Servicer in connection with Merchant’s acceptance of Cards or the submission of
Transactions to ProPay. Merchant shall provide ProPay at least 60 days’ advance
written notice of Merchant’s election to use a Merchant Servicer. Member Bank
and/or ProPay may individually approve or deny the use of a Merchant Servicer
in their sole and absolute discretion and at any time. If a Merchant Servicer
is required to certify, register, or act in any fashion pursuant to the Card
Brand Rules, Merchant shall cause such Merchant Servicer to cooperate with ProPay
in completing any steps required for registration, certification and/or action.
Merchant is solely responsible for any and all applicable fees, costs, expenses
and liabilities associated with such registration, certification and/or action.
ProPay and Member Bank shall in no event be liable to Merchant or any third
party for any actions or inactions of Merchant Servicer(s) used by Merchant,
and Merchant expressly assumes all such liability.
use of a Merchant Servicer or software or systems provided by a Merchant
Servicer that has connectivity to the Internet poses an increased risk, and
Merchant assumes all liability for such increased risks. If Merchant utilizes
software or hardware with a connection to the Internet such hardware or
software interacts in any capacity with the provision of services contemplated
pursuant to this Merchant Agreement, Merchant is solely liable without
limitation for any and all consequences of such interaction.
agrees and shall ensure that Merchant Servicers utilized by Merchant provide
the same levels of security as those required of Merchant, and that such
Merchant Servicers transmit data in accordance with: (a) the required format(s)
of the Card Brands; (b) the Card Brand Rules; and (c) the requirements of ProPay
and Member Bank. Merchant must have a written contract between itself and its Merchant
Servicers that stipulates adherence to the provisions of such information
security requirements. Merchant’s written contract with any such third party
must contain provisions obligating the third party to comply with (to the
extent applicable); (i) law, CISP, SDP, DISC, PCIDSS, PA-DSS, PIN and PED
security requirements; (ii) all other Card Brand requirements pertaining to
confidentiality and security and integrity of cardholder and Transaction data;
(iii) all rules prohibiting storage of certain Transaction data; and (iii) all
other applicable Card Brand Rules and the requirements of Propay and Member
Bank. Merchant will only allow Merchant Servicers to have access to cardholder
data for the purposes that are authorized by the Card Brand Rules. Any fees,
fines or liability assessments from actual or alleged noncompliance will be
the sole liability of Merchant. Merchant shall indemnify and hold Member Bank
and ProPay harmless against losses or damages arising from the acts or
omissions of Merchant Servicers engaged by Merchant.
must immediately notify Member Bank and ProPay of any suspected or confirmed
loss or theft of materials or records that contain cardholder account numbers
or Transaction information. In the event of a suspected or confirmed loss or
theft Merchant shall provide immediate access to all facilities, systems,
procedures, equipment, and documents as may be deemed appropriate by ProPay and
Member Bank or their designated representatives, regulators or auditors for
inspection, audit, and copying as deemed appropriate by both Member Bank and ProPay
in their individual sole discretion. Merchant shall be responsible for all
costs associated with such inspection, audit, and copying however such costs
may occur. Merchant shall make reasonable efforts to address and remedy the
cause of the breach, intrusion, compromise or otherwise unauthorized access to
cardholder account information.
authorizes ProPay to release its name and address to any third party whom ProPay
determines needs to know such information in order for ProPay to perform the Merchant
Services and who has requested such information.
will never (even in the event of including Merchant’s failure, bankruptcy,
insolvency, or other suspension of business operations): (a) provide cardholder
account numbers, personal cardholder information or Transaction information to
anyone except ProPay, the Card Brands, or Merchant’s servicers or agents for
the purpose of assisting Merchant in completing Transactions, or as
specifically consented to by cardholder or required by law or in response to
valid legal process; (b) retain or store Card magnetic stripe, CVV, CVV2, CVC2
or CID data (including track data) subsequent to authorization for a
Transaction; or (c) release any cardholder information over the telephone under
any circumstances. If Merchant’s business fails or ceases to exist, Merchant is
required to return to ProPay all such information or provide proof of
destruction of this information to ProPay.
agrees to establish security procedures to protect cardholder information and
comply with the Visa Cardholder Information Security Program (CISP),
MasterCard’s Site Data Protection (SDP) Program, Discover Information Security
Compliance (DISC), American Express Data Security Requirements, and the Payment
Card Industry (PCI) Data Security Standards. Detailed information about PCI DSS
can be found at the PCI DSS Council’s Website: www.pcisecuritystandards.org. The Card Brands, ProPay
or Member Bank, and their respective representatives, may inspect the premises
of Merchant or any servicer or agent engaged by Merchant for compliance with
security requirements. Merchant acknowledges that any failure to comply with
security requirements may result in the imposition of restrictions on Merchant
or the permanent prohibition of Merchant’s participation in Card acceptance programs
by the Card Brands. Merchant shall indemnify and hold ProPay and Member Bank
harmless against any losses or damages arising from Merchant's actual or
alleged failure to comply with security procedures and any losses or damages
arising from or related to Merchant's acts or omissions that result in an
actual or alleged breach of data security, including but not limited to
Merchant's non-participation in any breach security program ProPay may offer.
acknowledges that it will maintain compliance with all applicable Card Brand
Rules, including, without limitation, the PCI DSS requirements.
regulations enacted pursuant to the USA PATRIOT Act and other applicable laws
require financial institutions with which ProPay has relationships to verify
the identity of every person who seeks to open an account with a financial
institution. Merchant shall provide documentary verification of Merchant’s
identity, such as a driver’s license or passport for an individual and
certified copy of organization documents for an entity in manner acceptable to ProPay
and Member Bank. ProPay and Member Bank reserve the right to verify Merchant’s
identity through other non-documentary methods as ProPay and Member Bank deem
appropriate in their sole discretion. ProPay and Member Bank may retain a copy
of any document it obtains to verify Merchant’s identity with the financial
must comply with the Card Brand Rules, as the same may be amended from time to
time. The Card Brand Rules may change with little or no advance notice and
Merchant will be bound by all such changes. If Merchant objects to any change
in the Card Brand Rules, it must immediately stop accepting new Transactions
for Cards governed by the change. The Card Brand Rules will govern if there is
any inconsistency between the Merchant Agreement and the Card Brand Rules. If
there is an inconsistency between the Merchant Agreement (including the Card
Brand Rules) and applicable law, applicable law will govern, but only to the
extent necessary to resolve the inconsistency.
Brand Rules of the debit networks may differ among them with respect to the
Transactions they allow. ProPay, at its discretion, may require that the most
restrictive requirements of one debit network apply to all of Merchant’s online
debit Transactions, regardless of Card type.
LAW; MERCHANT’S BUSINESS; OTHER PROCESSORS.
will comply with all applicable federal, state, and local laws and regulations,
including but not limited to laws and regulations regarding anti-money
laundering compliance, in completing Transactions, submitting them to Propay,
performing its obligations under the Merchant Agreement, and otherwise
conducting its business.
will give ProPay and Member Bank at least 30 days’ prior written notice before
any change in Merchant’s name or location, any change in ownership or
management of Merchant’s business, any sale, assignment, rental, lease or
transfer of ownership of any location that accepts Cards, or any material
change in information concerning Merchant in the Merchant Application, and
material change in the type or nature of the business carried out by Merchant
or otherwise required to be provided to ProPay.
the extent permitted by applicable law, Merchant agrees that it will not
participate in a Card processing program with another financial institution or processor
without ProPay’s written approval.
REPORTS AND OTHER INFORMATION.
time to time, ProPay may obtain credit and other information on Merchant,
owners and officers of Merchant, and any and all personal guarantors of
Merchant, and any signatory to the Merchant Application, from others (such as
customers and suppliers of Merchant, lenders and credit reporting agencies),
and furnish information on Merchant’s relationship with ProPay and ProPay’s
experience with Merchant to others seeking the information.
will provide ProPay with updated business and financial information concerning
Merchant, including financial statements, tax returns, evidence of required
licenses and other information and documents ProPay may reasonably request from
time to time. Merchant shall further provide ProPay such information as it may
request for the making of insurance claim, regulatory or other filings related
to Merchant’s activity pursuant to this Agreement. All material marked
“confidential” which ProPay receives from Merchant will be used only by ProPay,
Member Bank or the Card Brands in performing the Merchant Services under this
Merchant Agreement or related services and reporting. ProPay, Member Bank and
any Card Brand, regulator, auditor or any other entity having authority may
audit Merchant’s records relating to this Merchant Agreement. Merchant shall
provide all documentation, information or other inspection rights requested by ProPay’s
or Member Bank’s regulators or auditors or otherwise to enable ProPay and
Member Bank to meet the requirements of applicable law. Without limiting the
generality of the foregoing, Merchant understands and agrees that if, at the
time of signing this Merchant Agreement Merchant is undergoing a forensic
investigation, Merchant must notify ProPay and fully cooperate with the
investigation until it is completed.
authorizes ProPay to release and use information collected in connection with ProPay’s
provision of the Merchant Services to third parties that provide services to ProPay
or Merchant or to any third party that requests and has a reason to know such
information, including but not limited to the Card Brands, and any third party
having regulatory control over any party.
Term/Renewal. The initial term of this
Merchant Agreement shall be for the term of three years (the “Initial Term”)
from the Effective Date. By either Merchant’s signature on the Merchant
Application or Merchant’s processing a Transaction with ProPay, Merchant
confirms acceptance of the Merchant Agreement. At the expiration of the Initial
Term, this Merchant Agreement will automatically renew for successive one year
periods (each a “Renewal Term” and collectively with the Initial Term
the “Term”) unless a party provides the other parties with notice of its
intent not to renew the Merchant Agreement at least 90 days prior to the
expiration of the then-current term.
(a) Termination without Cause. ProPay or Member Bank or ProPay’s
or Member Bank’s designated representative may terminate the Merchant Agreement
as to all Card types or individually specified Card types, without cause, upon 30
days’ advance written notice.
(b) Termination for Cause by ProPay
or Member Bank.
ProPay or Member Bank or ProPay’s or Member Bank’s designated representative
may terminate the Merchant Agreement in its sole and absolute discretion,
effective immediately, upon written, electronic or oral notice to Merchant if ProPay
or Member Bank reasonably determines that any of the following conditions
has violated any provision of the Merchant Agreement.
is a material adverse change in Merchant’s financial condition, material change
in Merchant’s processing activity, processing activity inconsistent with the
Merchant Application, or ProPay or Member Bank determines in its sole
discretion that Merchant’s processing activity could result in a loss to ProPay
or Member Bank.
petition in bankruptcy has been filed by or against Merchant, Merchant is
generally unable to pay its debts as they become due, a receiver, custodian,
trustee, liquidator or similar official is appointed for a substantial portion
of Merchant’s business, there is a general assignment for the benefit
creditors, or the business terminates.
information which Merchant provided to ProPay or Member Bank, including
Merchant Application information, was false, incomplete or misleading when
received, or has materially changed since Merchant provided such information.
time during the term of the Merchant Agreement, Merchant has had a monthly
ratio of Chargebacks to Transactions that ProPay or
Member Bank, in their sole and absolute discretion, deems excessive.
or any of Merchant’s officers or employees has been involved in processing
Transactions with ProPay or Member Bank or other parties arising from
fraudulent or otherwise unauthorized transactions.
(vii) Merchant is or will be
unable or unwilling to perform its obligations under the Merchant Agreement or any
(viii) Merchant has failed to pay ProPay
or Member Bank any amount when due.
has failed to promptly perform or discharge any obligation under the Merchant
Agreement, the Merchant Reserve Account or the Billing Reserve.
Merchant’s representations or warranties made in connection with the Merchant
Agreement was not true or accurate when given.
has defaulted on any agreement it has with ProPay or Member Bank.
(xii) ProPay or Member Bank is
served with legal demand, order or process seeking to attach or garnish any of
the provisional credits arising out of or relating to the Merchant Agreement,
Merchant’s funds or property in ProPay’s or Member Bank’s possession.
(xiii) The Card Brand Rules are
amended in any way such that ProPay or Member Bank determines that the
continued existence of the Merchant Agreement would cause ProPay or Member Bank
to be in breach of such Card Brand Rules.
(xiv) Any guaranty supporting
Merchant’s obligations is revoked, withdrawn or terminated or altered in any way.
governmental entity initiates proceedings against or an investigation
regarding, Merchant, or ProPay or Member Bank reasonably believes that a
governmental entity may do so.
(xvi) If any circumstances arise
regarding Merchant or its business that in ProPay’s or Member Bank’s
discretion, make harm or loss of goodwill to ProPay or Member Bank or any Card
(c) Termination for Cause by
may terminate the Merchant Agreement in the event of a material breach of the
terms of the Merchant Agreement by ProPay, provided Merchant gives ProPay
written notice of any alleged breach and such breach remains uncured for a
period of 30 days following receipt of written notice by the ProPay.
(d) Liquidated Damages for
addition to all other remedies available to ProPay under the Merchant Agreement
or as otherwise available in law or equity, if the Merchant Agreement is
terminated prior to the expiration of the applicable Term for any reason other
than for a material, uncured breach by ProPay, Merchant agrees to pay ProPay as
liquidated damages (and
not as a penalty), a sum computed by multiplying (i) the average of the monthly
fees paid by Merchant to ProPay over the immediately preceding six months and
(ii) the number of months remaining in the unexpired Term. Payment of
liquidated damages for termination will not relieve either party of any
obligations arising prior to the date of termination.
agrees that such liquidated damages as calculated above shall also be due to ProPay
if Merchant discontinues submitting Transactions for processing during the Term
for a period of 90 consecutive days, and is not designated on the Merchant
Application, or by notice to ProPay, as a seasonal merchant or as otherwise
agreed to by ProPay.
(iii) Merchant acknowledges and
agrees that the liquidated damages are a reasonable computation of the
financial harm caused by the termination of the Merchant Agreement by Merchant.
(e) Member Bank’s or ProPay’s
rights of termination under the Merchant Agreement are cumulative. A specific
right of termination shall not limit any other right of ProPay or Member Bank
to terminate the Merchant Agreement expressed elsewhere in the Merchant Agreement.
Notice of termination may be given orally or in writing, if given orally, shall
be confirmed in writing, except as otherwise stated in the Merchant Agreement.
(f) Upon termination,
Merchant’s rights to complete Transactions and submit them to ProPay will
cease. Termination of the Merchant Agreement will not terminate the rights and
obligations of Merchant, ProPay and Member Bank relating to acts or omissions
occurring before termination, including for example, any fees or other service
fees owed to ProPay, any Transactions processed for Merchant by Propay (whether
before or after termination), Merchant’s Chargeback and indemnity obligations,
and the security interest granted to ProPay and Member Bank in the Merchant
(g) It is understood that a
file for terminated merchants referred to as Member Alert to Control High-Risk
Merchants (“MATCH”), formerly known as the Terminated Merchant File or “TMF”,
is managed and maintained by Mastercard and utilized by the Card Brands and
acquiring banks to identify the names of any business (and its principals) that
have been terminated for certain reasons, including fraud, depositing excessive
counterfeit paper, excessive unauthorized transactions, excessive chargebacks,
depositing paper for others (laundering), bankruptcy or breach of a merchant agreement.
Merchant acknowledges that ProPay or Member Bank is required to report Merchant
to the MATCH (and/or on the Consortium
Merchant Negative File or “CMNF” published by Discover® Network) if the
Merchant Agreement is terminated for any of the foregoing reasons or other
reasons as may be modified by the Card Associations. Merchant agrees and
consents to such reporting in the event of the termination of the Merchant
Agreement for any of the foregoing reasons.
RESERVE. If ProPay or Member Bank
believes there is a high level of risk associated with Merchant’s use of the Merchant
Services, ProPay may
require the establishment of a reserve (“Reserve”). In lieu of
establishing a Reserve Account, Processor may, at its election, demand and
receive other forms of additional collateral security, including, without
limitation, letters of credit or certificates of deposit. Failure to supply
such additional collateral security shall constitute a material breach of this
Merchant Agreement. Factors
ProPay may consider are in requiring a reserve are chargebacks, returns,
unfulfilled orders, or credit risk. ProPay will hold funds in Reserve for as long as it deems necessary
to mitigate risks associated with Merchant’s use of the Merchant Services. If ProPay does require establishment
of a Reserve, ProPay will provide Merchant with notice specifying the terms of
the Reserve, which terms ProPay may change at any time on notice to Merchant.
Merchant will remain liable for all obligations related to its use of the Merchant
Services even after the release of any Reserve. The Reserve may be raised, reduced or
removed at any time by ProPay, in its sole discretion. Funds in reserve will be
held in an account maintained by Member Bank (the “Merchant Reserve
Account”). The Merchant Reserve Account will be under the sole control of Member
Bank. Notwithstanding anything in this Merchant
Agreement to the contrary, Merchant shall have no ownership or property rights
in the Merchant Reserve Account or the funds therein, no right of withdrawal
from the Merchant Reserve Account, and no right to receive interest on the
funds held in the Merchant Reserve Account. ProPay will reasonably
determine the amount of funds in the Merchant Reserve Account based on the
level of risk Merchant presents. ProPay or Member Bank may fund the Reserve in any of the
following ways: pulling funds directly from Merchant’s ProPay Account; withholding a portion of transactions;
requiring a payment directly from Merchant; and/or debiting the Designated Account.
Member Bank may continue to deposit funds in the Merchant Reserve Account after
termination of the Merchant Agreement.
RESERVE. If ProPay believes there is
a high level of risk that Merchant will be unable to pay the fees owing under
this Merchant Agreement, ProPay may require the establishment of a billing reserve (“Billing Reserve”). ProPay will hold funds in
the Billing Reserve for as
long as it deems necessary to mitigate risks associated with Merchant’s ability
to pay fees. If ProPay does establish a
Billing Reserve, it will provide Merchant with notice specifying the terms of
the Billing Reserve, which terms ProPay may change at any time on notice to
Merchant. Merchant will remain liable for all obligations related to its use of
the Merchant Services even after the release of any Billing Reserve. The Billing Reserve may be raised,
reduced or removed at any time by ProPay, in its sole discretion. Funds in the
Billing Reserve will be held and owned by ProPay. ProPay will reasonably
determine the amount of funds in the Billing Reserve based on the level of risk
ProPay may fund the Billing Reserve in any of the following ways: instructing Member
Bank to pull funds from Merchant’s ProPay Account; instructing Member Bank to withhold a portion of
transactions; requiring a payment directly from Merchant; and/or debiting the
Designated Account. ProPay may instruct Member Bank to continue to deposit
funds in the Billing Reserve after termination of the Merchant Agreement. At
its sole discretion, ProPay may return some or all of the funds in the Billing
Reserve to Merchant.
12.1. Merchant hereby grants ProPay
and Member Bank a security interest in any funds held in Merchant’s ProPay Account
and in the Merchant Reserve Account (without in any way
suggesting that Merchant has any ownership interest or property rights in the Merchant
Reserve Account), to secure the performance by Merchant of its obligations
to ProPay and Member Bank under this Merchant Agreement. Upon request of ProPay,
Merchant will execute one or more financing statements or other documents to
perfect this security interest.
12.2. This Merchant Agreement
will constitute a security agreement under the Uniform Commercial Code under
which Merchant grants ProPay and Member Bank a security interest in and lien
upon: (1) all funds owing Merchant under this Merchant Agreement, regardless of
the source of such funds; (2) all funds in the Merchant Reserve Account; (3)
present and future Transactions; (4) any amount which may be due to Merchant
under this Merchant Agreement, including, without limitation all rights to
receive any payments or credits under this Merchant Agreement; and (e) upon ProPay’s
or Member Bank’s request, any other security to secure Merchant’s obligations
under this Merchant Agreement (collectively, the "Secured Assets").
Merchant agrees to execute financing statements or other documents to evidence
this security interest. These security interests and liens will secure
all of Merchant’s obligations under this Merchant Agreement and any other
agreements now existing or later entered into between Merchant, ProPay and Member
Bank will have all rights afforded under the Uniform Commercial Code, Law, and
in equity. ProPay or Member Bank may exercise this security interest without
notice or demand by making an immediate withdrawal or freezing of Merchant’s
Secured Assets. Merchant warrants that no other person or entity has a security
interest in the Secured Assets and Merchant agrees to obtain from ProPay and
Member Bank written consent prior to granting a security interest of any kind
in the Secured Assets to a third party.
the extent that ProPay or Member Bank has paid or may become liable for a
Chargeback or credit transaction receipt, Merchant will be obligated to
reimburse ProPay and Member Bank for any sums ProPay and Member Bank pays or
for which ProPay or Member Bank is liable. If Merchant does not reimburse ProPay
or Member Bank, ProPay and Member Bank will have all of the rights and remedies
of cardholders, including the cardholders’ rights under 11 U.S.C. §507(a)(6). ProPay
and Member Bank may assert any claim on behalf of a cardholder individually or
on behalf of all cardholders as a class.
will pay the fees in the amount specified in the fee schedule or as otherwise
provided for in this Merchant Agreement or an addendum thereto. Monthly
recurring fees will be assessed upon approval of the Merchant Application. ProPay shall have the right to modify or amend the terms
and conditions of this Merchant Agreement, including, without limitation, the
right to modify, amend, or supplement applicable fees, charges, and/or
discounts. Modifications and amendments related to changes to the Card Brand
Rules, changes to the fees charged by the Card Associations, Member Bank, or
third parties, or in response to changes in requirements of Law (collectively,
a “Third Party Change”) may be made effective immediately, with or without
notice. Modifications or amendments unrelated to a Third Party Change shall be
effective upon the date specified in a notice to the Merchant (the “Change
Notice”), provided that the date shall not be fewer than five business days
after the date of such Change Notice. Such Change Notice
may be provided as a message attached to Merchant’s monthly billing statements.
Following the Effective Date, in the event of any modification or amendment not
related to a Third Party Change, Merchant shall have the right to terminate
this Merchant Agreement, without liability for premature termination by
providing written notice thereof to ProPay, provided that such notice must be
given within five business days following the date of the Change Notice.
will not be required to provide Merchant with 5 days’ notice of an increase in
fees if any Card Brand or any other entity having such authority increases fees
and the effective date for implementation of the increased fees is less than 5
days. In such cases, ProPay shall make reasonable efforts to notify Merchant
but failure to provide notice of will not affect Merchant’s obligation to pay
the increased fees.
and Regulatory Actions. ProPay
will not be required to provide Merchant with advance notice for any increase in
fees resulting from any fine, charge, fee or cost incurred in connection with
any state, federal or other regulatory action, change in laws or regulations or
escheatment of Merchant’s funds. ProPay shall make reasonable efforts to notify
Merchant but failure to provide notice of will not affect Merchant’s obligation
to pay the increased fees.
and Authorization to Debit Designated Account. Merchant authorizes ProPay
or Member Bank to deduct fees and other service charges, fines, obligations,
liabilities, or any other amounts owed by Merchant to ProPay or Member Bank
from amounts due Merchant, from the Designated Account, or from the Merchant Reserve
Account or Billing Reserve. This authorization will remain in effect until the Merchant
Reserve Account and Billing Reserve are closed. If Merchant changes the
Designated Account, this authorization will apply to Merchant’s subsequent
Designated Account. Merchant
will pay the amounts due by the next business day if sufficient funds are not
available in any of these accounts. ProPay may suspend accepting Transactions
or releasing ProPay Account funds to Merchant until Merchant has paid
The website status.propay.com is ProPay’s communication tool for operational
issues. Merchant is encouraged to visit status.propay.com at any time to review
the operational status of Merchant Services and subscribe to real time operational
updates via email, SMS, slack or webhook. If Merchant does subscribe, it is
Merchant’s responsibility to keep its contact information updated at status.propay.com
to assure that the proper individual(s) receive the updates. If Merchant does
not subscribe, Merchant acknowledges that it may miss out on important updates
about ProPay’s system.
WARRANTIES. To the maximum extent permitted by applicable law, ProPay and
Member Bank specifically disclaim all warranties of any kind, expressed or
implied, including, without limitation, warranties of title, availability,
non-infringement, merchantability, fitness for a particular purpose, or any
warranty arising out of any proposal, description, specification, course of
dealing, or sample. The Merchant Services are offered solely on an “as is” and
“as available” basis. ProPay and Member Bank expressly disclaim any
representation or warranty that the Merchant Services will be uninterrupted or
LIMITATION OF LIABILITY.
17.1. Merchant shall indemnify both
ProPay and Member Bank, including their respective officers, directors,
employees, independent sales organizations (“ISOs”) and
agents, against and hold them harmless from any and all claims, demands,
settlements, losses, damages, liabilities, costs and expenses of any kind
(including reasonable attorney’s fees) of any party arising from or based upon
any actual or alleged act or omission of Merchant, Merchant’s employees,
Merchant’s designated representatives, servicers, or agents, in connection with
or arising out of this Merchant Agreement, the duties to be performed by
Merchant pursuant to the Merchant Agreement, any Transactions which Merchant
submits to ProPay (including Chargebacks), or Merchant’s violation of the Card
Brand Rules or any requirements of applicable law. If ProPay or Member Bank is
made a party to any litigation, proceeding, arbitration, bankruptcy proceeding,
or other legal process (collectively “Actions”) commenced by any third
party, Merchant shall protect and hold both ProPay and Member Bank harmless
from and with respect to the Actions and shall indemnify such party from and
against all costs, expenses, and attorney’s fees, including in-house legal
fees, incurred or paid in connection with the Action, together with any
judgments, settlements, losses, damages or other liabilities. Merchant shall
indemnify, defend, and hold harmless both ProPay and Member Bank from and
against any actual or alleged hacking, infiltration, or compromise of
Merchant’s systems or the systems of Merchant, Merchant servicers or Merchant’s
agent(s), or designated representatives.
17.2. ProPay and Member Bank will
not accept responsibility for errors, acts, or failure to act by others,
including but not limited to, Merchant servicers, agents, third party suppliers
of software, equipment or services; or, banks, communication common carriers,
data processors or clearinghouses through which transactions may be passed,
originated and/or authorized. ProPay and Member Bank will not be responsible
for any loss, liability or delay caused by fires, earthquakes, war, civil
disturbances, power surges or failures, acts of governments, acts of terrorism,
labor disputes, failures in communication networks, legal constraints or other
events beyond the control of ProPay and Member Bank. ProPay and Member Bank
undertake no duties to Merchant other than the duties expressly provided for in
the Merchant Agreement, and any and all other or additional duties that may be
imposed upon ProPay and Member Bank in law or equity are hereby irrevocably
waived and released to the maximum extent permitted by law. IN ANY EVENT, TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE
LAW, THE CUMULATIVE LIABILITY OF EACH OF PROPAY AND MEMBER BANK, AS WELL AS
THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AND AGENTS, TO MERCHANT,
WHETHER ARISING IN CONTRACT, TORT (INCLUDING, WITHOUT LIMITATION, NEGLIGENCE
AND STRICT LIABILITY) OR OTHERWISE, SHALL NOT EXCEED THE LESSER OF $10,000 OR,
THE AMOUNT EQUAL TO THE AGGREGATE OF MONTHLY NET PROCESSING FEES PAID BY
MERCHANT IN THE THREE MONTH PERIOD PRIOR TO THE MONTH THAT THE INCIDENT GIVING
RISE TO LIABILITY OCCURRED.
17.3. To the maximum extent
permitted by law, in no event shall ProPay or Member Bank or their respective
officers, directors, employees and agents be liable for special, incidental,
indirect, consequential or exemplary damages or for any interruption or loss of
use, data, business or profits, whether or not such loss or damages were
foreseeable or ProPay or Member Bank was advised of the possibility thereof and
regardless of whether any limited remedy herein fails of its essential purpose.
will notify ProPay immediately if any bankruptcy, insolvency or similar
petition is filed by or against Merchant. Merchant acknowledges that this
Merchant Agreement constitutes an executory contract to extend credit or
financial accommodations as defined in 11 U.S.C. §365(c)(2) and that the
Merchant Agreement cannot be assumed or assigned in the event of bankruptcy. In
the event of Merchant’s bankruptcy, ProPay shall be entitled to suspend further
performance under this Merchant Agreement.
the event of a bankruptcy proceeding, Merchant must establish a Merchant
Reserve Account and/or Billing Reserve, or maintain a previously established
and then-current Merchant Reserve Account and/or Billing Reserve in amounts
required by ProPay. ProPay will have the right to set-off against the Merchant
Reserve Account and Billing Reserve for any and all obligations which Merchant
may owe ProPay, without regard as to whether the obligations relate to
Transactions initiated or created before or after the filing of the bankruptcy
19.1. Amendments. Other
than the amendments set forth above in Section 14.1, this Merchant Agreement
may be amended only in writing signed by Merchant, Member Bank, and ProPay.
19.2. Notices. Any notices or other
communications required or permitted by this Merchant Agreement shall be in
writing and shall be delivered either by personal delivery, by a nationally
recognized overnight courier service, electronic mail or other electronic
means, by first class mail or by certified or registered mail, return receipt
requested, addressed as set forth above or to such other address as any party
shall have designated to the others by written notice given in the manner set
forth above. Notices and approvals required under this Merchant Agreement shall
be deemed given: one day after sent, if sent by overnight courier; when
delivered and receipted for, if hand delivered; when received, if sent by
facsimile, electronic mail or other electronic means or by first class mail; or
when receipted for (or upon the date of attempted delivery where delivery is
refused or unclaimed), if sent by certified or registered mail, return receipt
19.3. Assignment. The Merchant Agreement is
binding upon the successors and assigns of ProPay, Member Bank and Merchant. Merchant
will not assign or transfer (including by merger, change of control or
operation of law) the Merchant Agreement (in whole or in part) to another
person or entity without ProPay’s and Member Bank’s prior written consent and
any purported assignment made without ProPay’s and Member Bank’s consent will
19.4. Waiver. ProPay or Member Bank’s failure to enforce
this Merchant Agreement will not waive ProPay’s or Member Bank’s rights under
this Merchant Agreement. Waivers of any provision of this Merchant Agreement
must be in writing and signed by ProPay and Member Bank. A waiver in one
instance will not apply to other occasions unless that intent is clear from the
19.5. Agency Relationship. Merchant authorizes Member
Bank with respect to the Services to act as Merchant’s agent for the limited
purposes of holding, receiving, and disbursing funds on Merchant’s behalf.
Merchant’s authorization permits Member Bank to generate an electronic funds transfer
to process each Transaction. This authorization will continue until Merchant’s
ProPay Account is closed or terminated. Merchant agrees that Member Bank’s
receipt of Transaction proceeds satisfies Merchant’s customers’ obligations to
Merchant. Member Bank will remit to Merchant funds actually received by Member Bank
on Merchant’s behalf, less amounts owed to ProPay and Member Bank, subject to
any Chargebacks or reserve withheld or applied as per this agreement.
19.6. Relationship of Parties. Merchant designates ProPay
as its agent to receive payments for transactions processed pursuant to this Merchant
Agreement. ProPay, however, shall not be considered a partner or fiduciary to
Merchant, and nothing in this Merchant Agreement or the rendition of services
related to this Merchant Agreement shall be deemed to create a joint venture,
partnership, or fiduciary relationship between or among the parties. Rather,
the relationships between Member Bank and Merchant, and between ProPay and
Merchant, are arm’s length commercial relationships.
Survival. Sections 2, 3, 4, 5, 6, 7,
9, 10, 11, 12, 13, 14, 16, 17, 19.1, 19.2, 19.3, 19.4,, 19.10, 19.11 and 19.12
will survive termination of the Merchant Agreement.
19.8. Severability. If any one or more of the
provisions contained in this Merchant Agreement shall in any jurisdiction be
held or determined by a court having jurisdiction to be invalid, illegal or
unenforceable for any reason, such provision shall be deemed modified so as to
be enforceable to the maximum extent permitted by law consistent with the
intent of the parties as herein expressed, and such invalidity shall not affect
the remaining provisions of this Merchant Agreement, which shall continue in
full force and effect.
19.9. No Remedies Exclusive. No right or remedy
granted pursuant to the terms of this Merchant Agreement shall be deemed to be
exclusive of any other right or remedy available at law or equity. All such rights
and remedies, whether granted now or hereafter, shall be deemed to be
cumulative and not alternative, and may be exercised concurrently,
independently or successively.
19.10. Governing Law and Venue. The laws of State of Utah
(without regard to its conflicts of law provisions) govern all matters arising
out of or relating to this Merchant Agreement. The parties consent to the
exclusive jurisdiction and venue of the federal or state courts located in Salt
Lake County, Utah for any legal proceeding pertaining to this Merchant
Agreement. All performances due and Transactions undertaken pursuant to this Merchant
Agreement are deemed to be due or to have occurred in the City of Lehi, Utah
County, State of Utah, and the use of the Merchant Services by Merchant is the transaction
of business within the State of Utah.
19.11. Jury Trial Waiver. The parties waive any right to trial by jury in any action
arising out of, in connection with, or in any way related to this Merchant
19.12. Attorney’s Fees. The prevailing party in
an action brought against the other to enforce the terms of this Merchant
Agreement or any rights or obligations hereunder, will be entitled to receive
its reasonable costs and expenses of bringing such action including its
reasonable attorney’s fees in addition to any other recoverable damages.
19.13. No Third Party
This Merchant Agreement is for the exclusive benefit of the parties, and no
other person or entity, including any affiliate or creditor of any party, shall
have any right or claim against any party by reason of this Merchant Agreement
or shall be entitled to enforce any provision of this Merchant Agreement
against any party.
19.14. Entire Agreement. This Merchant Agreement
constitutes the entire agreement among the parties, and supersedes all prior
oral and written negotiations with respect to the subject matter hereof.
19.15. Headings. Headings listed in this Merchant
Agreement are inserted for convenience only, do not constitute a part of this Merchant
Agreement, and are not to be considered in connection with the interpretation
or enforcement of this Merchant Agreement.
19.16. Review of Books and Records. ProPay or Member Bank
shall have the right, at its cost and expense and by providing not less than 30
days’ prior written notice to Merchant, to review those books and records of
Merchant that pertain to the performance by Merchant of its obligations under
this Merchant Agreement, for the purpose of confirming or assessing compliance
with the terms and conditions of this Merchant Agreement. Any such review shall
be conducted during normal business hours at a place reasonably designated by Merchant.
19.17. Counterparts. The parties agree that
this Merchant Agreement may be executed (a) in one or more counterparts, each
of which will be deemed an original and all of which together will constitute
one and the same agreement; and (b) by using an electronic or handwritten
signature, which are of equal effect, whether on original or electronic copies.
TRANSACTIONS WITHOUT PROTECTPAY
INFORMATION. Merchant will identify the cardholder when accepting payment
for products sold or services rendered. As part of the cardholder identification process, Merchant
will obtain the expiration
date, and ZIP Code or Postal
Code from the cardholder's billing address. Merchant will not honor any Card if: (a) the Card has expired; or,
(b) the account number embossed on the Card is listed on a current Electronic
Warning Bulletin file.
2.1 Authorization required
for all Transactions. Merchant will obtain authorization via ProPay's web site, touch-tone phone
system, Merchant Application Program Interface (“API”) or other method
acceptable to ProPay prior to completing any Transaction. Merchant will follow any
instructions received during the authorization process. Upon receipt of
authorization, Merchant may consummate only the Transaction authorized and must
note on the Merchant’s record of cardholder purchase the authorization number. Where authorization is
obtained, Merchant will be deemed to warrant the true identity of the customer
as the cardholder.
will be deemed invalid on Cards that are expired, whether or not an
authorization has been obtained. Merchant
must obtain the Card expiration
date and forward it as part of the authorization request.
3. PRESENTMENT OF
3.1 Forms. Merchant
will transmit to ProPay necessary information to document each Transaction. Each
Transaction will contain: (a) Merchant
name and account identifier; (b) the Card expiration date; and, (c) the total
amount of the sale (including any applicable taxes) or credit Transaction. ProPay
may also require addition information, such as: (a) zip code of customer’s billing
address; (b) CVV2 code or the equivalent; (c) a brief description of the goods
or services involved; (d) the Transaction authorization number; and, (e) if
applicable, adjacent to the signature line, a notation that all sales are
3.2 Delivery and
Retention of Transactions. Merchant will retain the merchant copy of the
Transaction or credit memorandum for at least 25 months following the date the
Merchant initiates the Transaction. When Merchant retains this information, Merchant must do so in
accordance with the applicable Card Brand Rules, security and confidentiality
requirements as referenced in the Merchant Services Agreement.
Transmission. Merchant will enter at the ProPay web site, or transmit via
API to ProPay, the data related to a Transaction no later than 72 hours from
the date the Merchant initiates the Transaction.Information regarding a sales or credit
Transaction transmitted with a computer or magnetic stripe reading terminal
will be transmitted by Merchant to ProPay or its agent in the form ProPay from
time to time specifies, or as required under Card Brand Rules. If ProPay requests a copy
of a Transaction, Merchant’s record of return or refund to be credited to cardholder’s
account (“Credit Voucher”) or other Transaction evidence, Merchant will
provide it within three (3) business days following the request. Merchant
acknowledges that ProPay shall have Chargeback rights with respect to any
Transaction or Credit Voucher for which Merchant fails to provide such
documents within such time period.
API LICENSE AGREEMENT
1. Purpose. ProPay owns and operates a
proprietary payment network. ProPay has developed the API, which is for use by
Merchant to build software applications that interface with or otherwise
communicate with ProPay’s payment network. ProPay provides this license to
Merchant to enable Merchant’s interaction with ProPay’s payment network via
ProPay’s API. All elements of ProPay’s API and Merchant’s specific
Authorization Information (as defined below) will constitute the (“Licensed Materials”).
2. License Grant. Subject to the terms and
conditions of this license and the Merchant Agreement it is attached to, ProPay
grants to Merchant a nontransferable, nonexclusive, non-sublicense-able,
limited license to use the Licensed Materials solely in accordance with this license.
Merchant may do the following under this license:
2.1 Sign up users for payment and/or
2.2 Transfer money, including
commission payments, between ProPay accounts;
2.3 Take action against payment cards
consisting of authorizing, capturing, voiding, and refunding transactions;
2.4 Initiate SpendBack transactions;
2.5 Initiate SplitPay transactions; and
informational requests regarding ProPay accounts, subject to system or API
Any combination of
subsections 2.1–2.6 above will be deemed a “Permitted Use.” A Permitted Use is
subject to all restrictions identified herein. ProPay shall provide to Merchant
confidential data which is specific to Merchant that will permit Merchant to
access and use the API (“Authorization Information”). The Authorization Information is the
property of ProPay and may be immediately revoked or terminated by ProPay if
Merchant shares the same with any third party (other than Third party Service
Providers from Merchant), if compromised by a third party, or if Merchant uses
or accesses the API in any way not expressly permitted or granted under this license.
3. Restrictions. ProPay reserves all rights
in the Licensed Materials not expressly granted herein. Except as expressly
provided herein: (a) Merchant shall not copy, nor allow others to copy, any of
the Licensed Materials; (b) Merchant shall not sell, assign, pledge, lease,
deliver, sublicense or otherwise transfer the Licensed Materials or any part
thereof to any third party; (c) Merchant shall not disclose to any third party
or permit any third party to have access to or use the Licensed Materials or
any part thereof; (d) Merchant shall not modify, alter or change the Licensed
Materials or any part thereof, or develop any diagram, drawing or other
documentation based on the Licensed Materials or the information contained
therein; (e) Merchant shall not use the Licensed Materials to develop,
manufacture, modify or reproduce any other product or service that it has
reason to know, or is notified by ProPay, that competes with any ProPay product
or service manufactured and/or distributed by or for ProPay; (f) Merchant may
not reverse engineer the Licensed Materials; (g) Merchant may not distribute,
facilitate, enable, or allow access or linking to ProPay’s payment network from
any location or source other than Merchant’s Website; and (h) Merchant shall
not permit or enable third parties to copy or obtain ProPay data from Merchant’s
Website in any unauthorized manner including, but not limited to, the use of
using robots, spiders, scraping, or any other technology. Notwithstanding the
foregoing, Merchant may disclose the Licensed Materials to any third party
service provider for the sole purpose of accomplishing a Permitted Use of this license
provided that said third party agrees in writing to be bound by all the terms
and conditions of this license.
4. Ownership of
Licensed Materials. Merchant acknowledges and
agrees that all right, title and interest in and to the Licensed Materials and
all patents, copyrights, trademarks, trade names, trade secrets and other
proprietary rights related to or residing in the Licensed Materials, and all
copies of all or any part thereof in any form whatsoever, will remain with
ProPay. Merchant understands and agrees that the Licensed Materials contain
trade secrets of ProPay that must be kept confidential. Merchant shall promptly
notify ProPay of any actual or threatened misappropriation or infringement of
ProPay’s proprietary rights which may come to Merchant’s attention.
Notices. Merchant shall not remove
from the Licensed Materials, or alter, any of ProPay’s trademarks, trade names,
logos, patent or copyright notices, or other notices or markings, or add any
other notices or markings to the Licensed Materials, without the prior express
written consent of ProPay. Merchant shall duplicate all such proprietary rights
notices on each copy of the Licensed Materials permitted to be made hereunder.
8. Breach. Merchant understands that
if it fails to comply with the provisions of this license, ProPay will suffer
irreparable harm, which may not be adequately compensated for by monetary
damages alone. Merchant, therefore, agrees that in the event of its breach or
threatened breach of this license, ProPay will be entitled to monetary damages
as well as injunctive and/or other preliminary or equitable relief, in addition
to any other remedies as available by law.
AMERICAN EXPRESS® CARD
Exhibit applies only if Merchant accepts American Express Cards (each a
“Sponsored Merchant”). If there is a conflict between any of the following
sections and any other section of the Terms and Conditions as they apply to
American Express Cards, the following sections will govern. ProPay and Member Bank
are not a party to the following sections.
Consent. Sponsored Merchant authorizes ProPay and/or its affiliates to submit American
Express Transactions to, and
receive settlement on, such Transactions from, American Express on behalf of Merchant.
Merchant agrees to comply with all American Express Card Brand Rules, Applicable
Laws, rules and regulations, including the American Express Merchant Operating
Guide requirements, which are incorporated into this agreement by reference as
if they were fully set forth in the Merchant Agreement. The American Express
Merchant Operating Guide may be viewed at: www.americanexpress.com/merchantopguide.
Any undefined capitalized terms set forth in this section have the meanings
given to them in the American Express Merchant Operating Guide.
Sponsored Merchant shall
abide by and fully comply
with DSR and Payment Card Industry Data Security Standard (PCI DSS). A
copy of the American Express Data Security Requirements (“DSR”) can be obtained
online at www.americanexpress.com/dsr.
c. Sponsored Merchant
acknowledges and agrees to:(i) ensure data quality and that Transaction Data
and customer information is processed promptly, accurately, and completely, in compliance
with the American Express Technical Specifications; (ii) report all instances
of a Data Incident immediately to ProPay after discovery of an incident; (iii)
be aware of and adhere to privacy and data protection laws; and (iv) provide
specific and adequate disclosures to Cardmembers regarding collection, use, and
processing of personal data.
d. Sponsored Merchant
certifies that all indebtedness arising from Transactions will be for bona fide
sales of goods and services (or both)
at its business locations and free of liens, claims, and encumbrances other
than ordinary sales taxes.
Charge Volume Sponsored Merchants. In the event that Sponsored Merchant’s estimated annual
American Express charge volume becomes $1,000,000 USD or greater, Sponsored
Merchant may, at the discretion of ProPay and American Express become a direct
Card-accepting merchant under the standard American Express acceptance program
and cease to be a Sponsored Merchant under a Merchant Services Provider. As a
direct Card-accepting merchant, Sponsored Merchant will be bound by the
then-current American Express Card acceptance agreement and American Express will set pricing and other fees payable for card acceptance.
Sponsored Merchant is prohibited from processing Transactions or receiving
payments on behalf of, or (unless required by law) re-directing payments to any
other party. Provided, however, that Sponsored
Merchant may sell and assign future American Express-related Transaction
receivables to ProPay, its affiliated entities and/or any other cash advance
funding source that partners with ProPay or its affiliated entities, without
consent of American Express. Notwithstanding the foregoing, ProPay prohibits Sponsored
Merchant from selling or assigning future American Express-related Transaction
receivables to any third party.
party Beneficiary Rights.
Merchant confers on American Express the beneficiary rights, but not
obligations, to the Sponsored Merchant’s Merchant Agreement and subsequent
addendums (collectively the “Merchant Agreement”) between Sponsored Merchant
and Payment Service Provider and, as such, American Express has the express
right to enforce the terms of the Merchant Agreement against the Sponsored
Merchant warrants that it does not hold third party beneficiary rights to any
agreements between Payment Service Provider and American Express and at no time
will attempt to enforce any such agreements against American Express.
Express Liability. SPONSORED
MERCHANT ACKNOWLEDGES AND AGREES THAT IN NO EVENT SHALL AMERICAN EXPRESS, ITS
AFFFILIATES, AGENTS, SUCCESSORS, OR ASSIGNS BE LIABLE TO SPONSORED MERCHANT FOR
ANY DAMAGES, LOSSES, OR COSTS INCURRED, INCLUDING INCIDENTAL, INDIRECT,
SPECULATIVE, CONSEQUENTIAL, SPECIAL, PUNITIVE, OR EXEMPLARY DAMAGES OF ANY KIND
(WHETHER BASED ON CONTRACT, TORT, INCLUDING NEGLIGENCE, STRICT LIABILITY,
FRAUD, OR OTHERWISE, OR STATUTES, REGULATIONS, OR ANY OTHER THEORY), ARISING
OUT OF OR IN CONNECTION WITH THE MERCHANT AGREEMENT.
Website Display Requirements. Sponsored Merchant will adhere to the following
website information display guidelines in the event a Sponsored Merchant has a
website and/or operates an e-commerce business (“Merchant Website”). The
Merchant Website must display the following:
accurate description of the goods/services offered, including the currency type
for the Transaction (e.g., U.S. Dollars). Note: Transaction currency must be in
Merchant's physical address in the U.S.
email address or telephone number for customer service disputes.
description of the Sponsored Merchant's delivery policy (e.g., no overnight
description of the Sponsored Merchant's security practices (e.g., information
highlighting security practices the Merchant uses to secure Transactions on its
systems, including Transactions conducted on the Internet).
statement of known export restrictions, tariffs, and any other regulations.
privacy statement regarding the type of personal information collected and how
the information is used. Additionally, Sponsored Merchant must provide to
customers the option to decline being included in marketing campaigns or having
their personal information included on lists sold to third parties.
a. Sponsored Merchant
agrees that ProPay may disclose to American Express information from the
Merchant Agreement and otherwise regarding
Sponsored Merchant and its Transactions, and that American Express may
use such information: (i) to perform its responsibilities in connection with
American Express Card Acceptance;
(ii) to promote the American Express Network; (iii) to perform analytics and
create reports; (iv) for any other lawful business purposes including
commercial marketing communications purposes within the parameter of the
Program Agreement, (v) for important transactional or relationship
communication from American Express, and (vi) to screen and/or monitor Sponsored
Merchant in connection with American Express marketing and administrative purposes.
Merchant agrees it may receive messages from American Express, including
important information about American Express
products, services, and resources available
to its business. These messages may be sent to the mailing address, phone numbers, email
addresses or fax numbers of Sponsored Merchant. Sponsored Merchant may be
contacted at its wireless telephone number and the communications sent may
include autodialed short message service
(SMS or “text”)
messages or automated
or prerecorded calls. Sponsored Merchant may opt-out
of receiving future commercial marketing communications from American Express
by contacting ProPay; however, Sponsored Merchant may continue to receive
marketing communications while American
Express updates its records to reflect this choice. Opting
out of commercial marketing communications will not preclude Sponsored Merchant
from receiving important transactional or relationship messages from American Express.
has the right to terminate Sponsored Merchant’s participation in American
Express Card Acceptance immediately upon written notice to Sponsored Merchant:
(i) if Sponsored Merchant breaches any of the provisions of this exhibit or any
other terms of this Merchant Agreement applicable to American Express Card
Acceptance, including, but not limited to, the American Express Merchant
Operating Guide; (ii) if ProPay has cause to believe Sponsored Merchant is
engaged in illegal or fraudulent activity; or (iii) upon American Express’s
Merchant may opt out of accepting American Express at any time by written request to ProPay without
directly or indirectly affecting its rights to accept other Cards.
the event Sponsored Merchant’s participation in American Express Card
Acceptance is ended for any reason, Merchant must immediately cease all use of
and remove all American Express branding and marks from Sponsored Merchant’s business location(s), website(s) and
anywhere else they are displayed.
Refund Policy. Sponsored Merchant’s refund
policies for American
Express-related Transactions must be at least as favorable
as its refund policy for purchase with any other Card, and the refund policy
must be disclosed to Cardholders at the time of purchase and in compliance with
Applicable Law. Sponsored Merchant may not bill or attempt to collect from any
cardholder for any American Express-related Transaction unless: (a) a
Chargeback has been exercised, (b) Sponsored Merchant has fully paid for such
Chargeback, and (c) Sponsored Merchant otherwise has the right to do so.