Merchant Services Agreement
Last Updated: June 1, 2026
This Merchant Services Agreement for Merchants (this “Merchant Agreement”) is made among Amos Inc. (hereinafter referred to as “Provider”), its designated Member Bank and Member Bank’s Agents (“Acquirer”) and Merchant in connection with the agreement between Merchant and (“Provider”). Member Bank shall include Chesapeake Bank, whose principal place of business is 97 N. Main Street, Kilmarnock, VA 22482 (“Member Bank”). Acquirer will provide Merchant with certain payment processing services (“Services”) in accordance with the terms of this Merchant Agreement. In consideration of Merchant’s receipt of credit or debit card funded payments, and participation in programs affiliated with MasterCard International Inc. ("MasterCard"), VISA U.S.A. Inc. ("VISA"), Discover (“Discover”), and certain similar entities (collectively, “Associations”), Merchant is required to comply with the Operating Regulations (defined below) as they pertain to applicable credit and debit card payments. In addition, if Merchant meets certain requirements under the Operating Regulations or an Association or the Operating Regulations otherwise require, Merchant may be required to enter into a direct relationship with an entity that is a member of the Associations. By executing this Merchant Agreement, Merchant has fulfilled such requirement. However, Acquirer understands that Merchant may have contracted with Provider to obtain certain processing services and that Provider may have agreed to be responsible to Merchant for all or part of Merchant’s obligations contained herein.
NOW, THEREFORE, in consideration of the foregoing recitals and of the mutual promises contained herein, the parties agree as follows:
I. Services and Roles
A. Services. Merchant and Provider entered into this Master Services Agreement (“Agreement”) that allows Provider to act as a payment facilitator for authorization, processing, and settlement services (“Acquiring Services”).
B. Provider will facilitate the provision of the Acquiring Services outlined in this Agreement, including, supporting chargebacks, reporting, status changes, and questions about the Acquiring Services.
C. Member Bank. Bank is the member of Visa and MasterCard Networks that sponsors Provider and Merchant’s acceptance of Visa and MasterCard transactions. The Member Bank will also facilitate a portion of the debit transactions as set forth in this Agreement. As between the Member Bank and Provider, only the Member Bank is approved to extend acceptance of Visa and MasterCard transactions directly to Provider and/or Merchant. The Member Bank is responsible for providing Provider (as allowed by the Network Rules) or Merchant with settlement funds for Visa and MasterCard transactions. The Acquiring Services that Merchant receives from any Network other than Visa, MasterCard, and certain debit Networks are provided by Provider and not by the Member Bank.
II. Merchant Responsibilities
Merchant agrees to comply, and to cause third parties acting as Merchant’s agent (“Agents”) to comply, with the Association’s and other payment network’s by-laws, operating regulations and/or all other rules, policies and procedures, including but not limited to the Payment Card Industry Data Security Standard, the VISA Cardholder Information Security Program, the MasterCard Site Data Protection Program, and any other program or requirement that may be published and/or mandated by the Associations or payment networks (collectively "Operating Regulations"). Merchant may review the VISA, MasterCard, and Discover websites for a copy of the Visa, MasterCard and Discover regulations. The websites are:
https://usa.visa.com/support/small- business/regulations-fees.html
http://www.mastercard.com/us/merchant/
http://www.discovernetwork.com/merchants/.
Merchant also agrees to comply with all applicable state, federal, and local laws, rules, and regulations (“Laws”). Without limiting the foregoing, Merchant agrees that it will fully comply with any and all anti-money laundering laws and regulations, including but not limited to the Bank Secrecy Act, the US Treasury’s Office of Foreign Assets Control (OFAC) and the Federal Trade Commission. For purposes of this section, Agents include, but are not limited to, Merchant’s software providers and/or equipment providers.
Merchant also agrees and warrants to Member Bank and Provider that the receipt and handling of funds in settlement of transactions processed under this Agreement is solely in payment for Merchant’s provision of bona fide goods and/or services to Merchant’s customers (each, “Payor”). Merchant hereby designates Provider and Provider hereby agrees to serve as Merchant’s limited agent for the sole purpose of receiving such payments on Merchant’s behalf from Merchant’s Payors. Merchant agrees that upon Provider receiving payment from a Payor: (a) Merchant shall be deemed to have received payment from such Payor; (b) such Payor’s obligation to Merchant in connection with such payment shall be satisfied in full; (c) any claim Merchant has for such payment against such Payor shall be extinguished; and (d) Merchant is obligated to deliver the applicable goods and/or services to the Payor, in each case regardless of whether or when Provider remits such payment to Merchant. Provider will remit to Merchant in accordance with this Agreement or apply as an offset to any obligation Merchant may have to Provider, any such payments Provider receives on Merchant’s behalf. Merchant shall identify to its Payors that Provider is acting as Merchant’s agent for purposes of receiving payment on Merchant’s behalf. Any receipt provided to the Payor shall be binding on Merchant and shall satisfy all applicable regulatory requirements. This Section states the entirety of Provider duties as Merchant’s agent for receipt of payment, and no other duties shall be implied by Provider’s undertaking to act in that capacity.
High-Risk and Emerging Use Cases. Merchant is approved to use the Services solely for the specific business activities and use cases disclosed to and approved by Provider at onboarding. Any material change in Merchant’s business model, products, services, transaction flows, use of Third Parties, or processing activities, including the introduction of any new, expanded, or emerging use case, requires Provider’s prior written approval. If Provider determines, in its reasonable discretion, that any activity presents increased risk, violates Network Rules, Sponsor Bank requirements, or applicable Law, or differs from Merchant’s approved use case, Provider may restrict, suspend, or terminate processing for such activity and limit Merchant’s use of the Services to the originally approved use case until review and approval are completed.
Delivery and Retention of Sales Drafts. Merchant will deliver a complete copy of the Sales Draft or credit voucher to the Cardholder at the time of the transaction. In addition to any records routinely furnished to Service Provider under this Agreement, Merchant shall preserve a paper or microfilm copy of all actual paper Sales Drafts and Credit Vouchers and if a mail, phone order or preauthorized order is involved, the Cardholder’s signed Authorization for the Transaction for at least eighteen (18) months (or longer if required by law or Rules) after the date Merchant presents the Transaction and Merchant must preserve the records.
Returns and Adjustments: Credit Vouchers. Merchant agrees that it will conduct business in regards to returns as follows: (a) Merchant’s policy for the exchange or return of goods sold and the adjustment for services rendered shall be established and posted in accordance with the Rules. Merchant agrees to disclose to a Cardholder before a Card sale is made, that if merchandise is returned: (i) no refund, or less than a full refund, will be given; (ii) returned merchandise will only be exchanged for similar merchandise of comparable value; (iii) only a credit toward purchases will be given; or (iv) special conditions or circumstances apply to the sale (e.g., late delivery, charges, or other noncredit terms). (b) Disclosures must be made on all copies of the Sales Drafts in letters approximately 1/4” high in close proximity to the space provided for the Cardholder’s signature on the Sales Draft and issued at the time of sale. (c) If Merchant does not make these disclosures and Cardholder requests a refund, a full refund in the form of a credit to the Cardholder’s Card account must be given. Merchant shall not refund cash to a Cardholder who originally paid for the item by Card. (d) Credits must be made to the same Card account number on which the original sale Transaction was processed. (e) If Merchant accepts any goods for return, any services are terminated or canceled in conjunction with each such transaction. Merchant shall have sufficient funds in its account available to Service Provider to cover the amount of the transaction and any related fees. (f) Merchant warrants that any Credit Voucher it issues represents a bona fide refund or adjustment on a Card sale by Merchant with respect to which a Sales Draft has been accepted. (g) Under no circumstance will Service Provider be responsible for processing credits or adjustments related to Sales Drafts not originally processed by processor and Service Provider
III. Limited Acceptance Merchants
If appropriately indicated in Merchant’s agreement with Provider, Merchant may be a limited-acceptance merchant, which means that Merchant has elected to accept only certain Visa and MasterCard card types (i.e., consumer credit, consumer debit, and commercial cards) and must display appropriate signage to indicate the same. Acquirer has no obligation other than those expressly provided under the Operating Regulations and applicable law as they may relate to limited acceptance. Merchant, and not Acquirer, will be solely responsible for the implementation of its decision for limited acceptance, including but not limited to policing the card type(s) accepted at the point of sale.
Merchant shall only complete sales transactions produced as the direct result of bona fide sales made by Merchant to cardholders, and is expressly prohibited from presenting sales transactions which are produced as a result of sales made by any person or entity other than Merchant, or for any purposes related to any illegal or prohibited activity, including but not limited to money- laundering or financing of terrorist activities.
Merchant may set a minimum transaction amount to accept a card that provides access to a credit account, under the following conditions: i) the minimum transaction amount does not differentiate between card issuers; ii) the minimum transaction amount does not differentiate between MasterCard, Visa, or any other acceptance brand; and iii) the minimum transaction amount does not exceed ten dollars (or any higher amount established by the Federal Reserve). Merchant may set a maximum transaction amount to accept a card that provides access to a credit account, under the following conditions: Merchant is a i) department, agency or instrumentality of the U.S. government; ii) corporation owned or controlled by the U.S. government; or iii) Merchant whose primary business is reflected by one of the following MCCs: 8220, 8244, 8249 –Schools, Trade or Vocational; and the maximum transaction amount does not differentiate between MasterCard, Visa, or any other acceptance brand.
IV. Fees
Unless otherwise agreed to in writing between Provider and Merchant, Provider does not charge fees on a variable rate or in connection with any discount. Provider charges the pricing as set forth on its website or by request.
V. Honoring Cards
A. Without Discrimination. Merchant will accept without discrimination, all valid Cards as indicated by Merchant on the Merchant Application when properly presented by Cardholders for payment for goods or services within the Merchant’s Category (MCC) of acceptance. Merchant may not discriminate between payment Cards within a payment Card network on the basis of the Issuer that issued the presented payment Card.
B. Acceptance. Merchant will elect on the Merchant Application to accept (full acceptance) or not accept (limited acceptance) credit and/or debit Cards for payment. A full acceptance Merchant will accept all valid Cards unless Merchant provides 30 days written notice to Service Provider requesting limited acceptance and stating Merchant’s election of Card types. Limited acceptance is not applicable to non-US issued Cards.
C. Advertised Price. Merchant agrees to accept Cards for payment of goods or services without charging any amount over the advertised price as a condition of Card acceptance, unless local law requires Merchant be permitted to engage in such practice.
D. Minimums and Maximums. (a) Merchant shall not establish minimum or maximum transaction dollar value for Signature-Debit or PIN-Debit Card sales as a condition for accepting such Debit Cards. (b) Merchant may set a minimum transaction dollar value for the acceptance of a Credit Card, only to the extent that: (i) such minimum dollar value does not exceed $10; and (ii) such minimum dollar value is the same for all Issuers or Card Associations. (c) If Merchant is a federal agency or institution of higher education, Merchant may set a maximum dollar value for the acceptance of Credit Cards, to the extent that such maximum dollar value is the same for all Issuers or Card Associations.
E. Surcharges. If Merchant chooses to impose a surcharge on Card payments, Merchant may do so only after meeting specific considerations, limitations and requirements as defined by the Card Associations. Requirements and limitations include: (i) Merchant may only impose a surcharge if permitted by, and compliant with, state and local law; (ii) Merchant shall notify Service Provider and Card Associations no less than 30 days in advance of imposing any surcharge; (iii) Merchant shall publicly disclose its surcharge practices to customers at the store entry point and point of sale; and (iv) Any surcharge imposed by Merchant shall not exceed 4% of the underlying transaction amount. For information on, and further links to, surcharge considerations, requirements, limitations and Card Association surcharge registration pages, visit www.mastercard.us/merchants/support/surcharge-rules.html and www.visa.com/merchantsurcharging.
F. Discounts. Merchant may offer a discount or in-kind incentive as an inducement for a Cardholder to use a means of payment that the Merchant prefers, provided that the discount: (i) is clearly disclosed as a discount from the standard price; (ii) is non-discriminatory, by providing the same discount for all Cards accepted; (iii) does not differentiate on the basis of the Issuer or the Card Association; and (iv) is in accordance with the law and the Rules.
G. Disputes with Cardholder. (a) All disputes between Merchant and any Cardholder relating to any Card Transaction will be settled between Merchant and the Cardholder. The Service Provider bears no responsibility for such transactions. (b) Merchant must not require a Cardholder, as a condition for honoring a Card, to sign a statement that waives the Cardholder's right to dispute the Transaction with the Card Issuer.
H. Cardholder Identification. Merchant will identify the Cardholder and check the expiration date and signature on each Card. Merchant will not honor any Card if: (i) the Card has expired; (ii) the signature on the sales draft does not correspond with the signature on the Card; (iii) the account number embossed on the Card does not match the account number on the Card’s magnetic stripe (as printed in electronic form); (iv) the Card was declined as a result of an Authorization attempt. Merchant may not require a Cardholder to provide personal information, such as a home or business telephone number, a home or business address; or a driver license number as a condition for honoring a Card unless permitted by law and the Card Association Rules.
I. Non-presentment. Merchant shall not accept a Card as payment (other than for mail order, Internet sale, telephone order, or preauthorized sale to the extent permitted under this Agreement), if the person seeking to use the Card does not present the Card to permit Merchant to examine it and obtain an imprint or otherwise use the physical Card to complete the Transaction.
J. Card Recovery. Merchant will use reasonable, best efforts and peaceful means to recover any Card, if: (i) Merchant is advised by Service Provider, the issuer of the Card or the designated voice authorization center to retain it; or (ii) if Merchant has reasonable grounds to believe the Card is counterfeit, fraudulent or stolen, or not authorized by the Cardholder. NOTE: The obligation of Merchant imposed by this section to retain or recover a Card does not authorize a breach of the peace or any injury to persons or property and Merchant will hold Service Provider harmless from any claim arising from any injury to person or property, or other breach of the peace in connection with the retention or recovery of a Card.
K. Location. Merchant may honor Cards only at location(s) approved by Service Provider. Additional locations may be added, subject to Service Provider’s approval. Either Merchant or Service Provider may delete location(s) by providing notice.
VI. Merchant Prohibitions
A Merchant using Services must not:
A. require a cardholder to complete a postcard or similar device that includes the cardholder’s account number, card expiration date, signature, or any other card account data in plain view when mailed,
B. add any tax to transactions, unless applicable law expressly requires that a Merchant impose a tax (any tax amount, if allowed, must be included in the transaction amount and not collected separately);
C. request or use an account number for any purpose other than as payment for its goods or services;
D. disburse funds in the form of travelers checks if the sole purpose is to allow the cardholder to make a cash purchase of goods or services from Merchant;
E. disburse funds in the form of cash unless Merchant is dispensing funds in the form of travelers checks, TravelMoney cards, or foreign currency (in such case, the transaction amount is limited to the value of the travelers checks, TravelMoney cards, or foreign currency, plus any commission or fee charged by the Merchant), or Merchant is participating in a cash back service;
F. submit any transaction receipt for a transaction that was previously charged back to the Acquirer and subsequently returned to Merchant, irrespective of cardholder approval;
G. accept a Visa consumer credit card or commercial Visa product issued by a U.S. issuer to collect or refinance an existing debt;
H. accept a card to collect or refinance an existing debt that has been deemed uncollectable; or
I. submit a transaction that represents collection of a dishonored check. Merchant further agrees that, under no circumstance, will Merchant store cardholder data in violation of the Laws or the Operating Regulations including but not limited to the storage of track-2 data. Neither Merchant nor its Agent shall retain or store magnetic-stripe data subsequent to the authorization of a sales transaction.
Merchant shall not engage in any activity listed on Provider’s Prohibited Business List, as updated by Provider from time to time and made available upon request.
VII. Prohibited and High Risk Transactions
IMPORTANT: FAILURE TO COMPLY IN FULL WITH THIS SECTION OF THE AGREEMENT MAY RESULT IN THE TERMINATION OF THIS AGREEMENT AND MERCHANT ACCOUNT PRIVILEGES AND MERCHANT MAY BE ADDED TO THE CONSOLIDATED TERMINATED MERCHANT FILE (MATCH).
A. Fraud Transactions. Merchant will not, under any circumstances, present for processing of Sale or Credit, directly or indirectly, any Transaction Merchant knows or should know to be fraudulent or not authorized by the Cardholder. Merchant must not request or use a Card account number for any purpose other than as payment for goods and services.
B. Factoring. Merchant will not, under any circumstances, present for processing of Sale or Credit, directly or indirectly, any Transaction not originated as a result of a bona-fide Card transaction directly between Merchant and Cardholder. Merchant will not present any Sales Drafts on behalf of another company, person, source or entity.
C. Lawful Purposes. Merchant will not, under any circumstance, engage in any Transaction, or use Card Acceptance and Transaction capabilities for selling goods and/or providing services prohibited by local, hyper-local, state, federal, international and other applicable laws included, but not limited to, the USA PATRIOT Act, Bank Secrecy Act, Consumer Protection Laws and the U.S. Tax Code. Merchant will not submit any Transactions prohibited by the Rules. Perpetrators of fraud or fraudulent Transactions will be referred to state and/or federal law enforcement agencies.
D. Cash Payments. Merchant will not, under any circumstances accept cash, checks or other negotiable items from any Cardholder and forward a Credit Transaction, as a purported payment or deposit on an account maintained by the Cardholder.
E. Cash Advances. Merchant will not submit, deposit or process any transaction for the purpose of obtaining or providing a cash advance. Merchant will not submit any transaction that involves a Card owned or controlled by Merchant for the purpose of obtaining a cash advance or deposit of funds into Merchant’s own Designated Account. Merchant agrees that any such deposit or transaction shall be grounds for immediate termination.
F. Refinancing Existing Debt. Merchant will not accept a Card to collect or refinance an existing debt that: (i) has been deemed uncollectible by the Merchant providing the associated goods or services; (ii) represents any other pre-existing indebtedness by Cardholder, including collection of delinquent accounts on behalf of other parties; (iii) represents the collection of a dishonored check. Further, Merchant must not accept Cardholder payments for previous Card charges.
G. Merchant Category. Merchant may not accept Card payments for products and/or services delivered to Cardholder that are not directly applicable to the MCC entered on the Merchant Application, for which Merchant was approved. Should Merchant’s MCC change after execution of this Agreement, Merchant shall not submit, deposit or process any Transactions until receiving Service Provider’s written approval of MCC change. Merchant understands that accepting payments for goods and/or services not directly relating to the approved MCC will result in termination of this Agreement.
H. Card Association Rules. Merchant shall comply with the Card Association Rules, as amended from time to time. Merchant is required to review the latest versions of Card Association Rules, as applicable to Merchant’s obligations under this Agreement, available online at each Card Association’s respective website.
I. Cooperation. Merchant will fully cooperate with Service Provider and each Card Association in the event that Service Provider or any Card Association determines that there is a substantial risk of fraud arising from Merchant’s access to Card processing networks. Merchant will take whatever action(s) Service Provider or Card Associations reasonably deem necessary in order to protect Service Provider, Card Associations, its members and Cardholders. Neither the Service Provider nor the Card Associations nor any of their respective personnel will have any liability to Merchant for any action taken in good faith.
J. Prohibited Transactions. Merchant will not submit any telemarketing (inbound or outbound) sales Transactions or any other Transactions that Service Provider or Card Associations deem to be High Risk unless Merchant obtains Service Provider’s prior written consent. Such consent will be subject to Service Provider’s final approval and may be revoked by Service Provider without prior notice. Merchant may be subject to Card Association registration and reporting requirements. If Merchant processes any such Transactions without Service Provider’s prior approval, Merchant may be terminated immediately and Service Provider may suspend funds and/or require Merchant to establish a Reserve Account.
VIII. Settlement and Chargebacks
Upon receipt of Merchant’s sales data for card transactions, Acquirer will process Merchant’s sales data to facilitate the funds transfer between the various Associations and Merchant. After Acquirer receives credit for such sales data, subject to the terms set forth herein, Acquirer will fund Merchant, either directly to the Merchant-Owned Designated Account or through Provider to an account designated by Provider (“Provider Designated Account”), at Acquirer’s discretion, for such card transactions. Merchant agrees that the deposit of funds to the Provider Designated Account shall discharge Acquirer of its settlement obligation to Merchant, and that any dispute regarding the receipt or amount of settlement shall be between Provider and Merchant. Acquirer will debit the Provider Designated Account for funds owed to Acquirer as a result of Services provided hereunder, provided that Acquirer may also debit Merchant’s designated demand deposit account (“Merchant-Owned Designated Account”) upon receipt of such account information from Merchant or Provider, or if Acquirer deposits settlement funds into the Merchant-Owned Designated Account. Further, if a cardholder disputes a transaction, if a transaction is charged back for any reason, or if Acquirer reasonably believes a transaction is unauthorized or otherwise unacceptable, the amount of such transaction may be charged back and debited from Merchant or Provider. Merchant is solely responsible to pay the amount of any chargebacks resulting from transactions submitted by Merchant under this Agreement.
Merchant acknowledges and agrees that cardholder disputes, chargebacks, reversals, refunds, fines, penalties, assessments, and other adjustments may be initiated after termination of this Merchant Agreement for Transactions processed prior to termination. Merchant remains fully responsible for all such amounts, regardless of whether settlement funds have been paid to Merchant or whether Merchant has ceased using the Services.
Provisional Nature of Settlement. All settlement of Transactions to Merchant is provisional and subject to adjustment, reversal, or chargeback in accordance with Network Rules, applicable Law, and this Merchant Agreement. Merchant acknowledges that settlement of funds does not constitute final payment and does not waive Merchant’s responsibility for Chargebacks, reversals, refunds, fines, penalties, assessments, or other adjustments, regardless of when such amounts are identified or asserted.
No Ownership Until Final Settlement. Merchant acknowledges that Merchant has no vested right or ownership interest in any funds relating to a Transaction unless and until such Transaction has been finally settled and all applicable dispute, chargeback, and reversal periods under Network Rules have expired.
Right to Debit and Adjust. Provider and Member Bank may debit Merchant’s settlement account, Reserve, or any other funds otherwise payable to Merchant, or require reimbursement from Merchant, to recover amounts relating to Chargebacks, reversals, refunds, fees, fines, penalties, assessments, or other liabilities, including those identified after settlement or termination of this Merchant Agreement.
No Trust or Fiduciary Relationship. Merchant acknowledges and agrees that neither Provider nor Member Bank acts as a trustee, fiduciary, escrow agent, or advisor with respect to Merchant or any funds processed, settled, or held in connection with this Merchant Agreement. No trust, fiduciary, agency, or special relationship is created by this Merchant Agreement or by the receipt, holding, or settlement of funds, and all funds are received and held solely in accordance with the terms of this Merchant Agreement.
IX. Term and Termination
This Merchant Agreement shall be binding upon Merchant upon Merchant’s approval. The term of this Merchant Agreement shall begin, and the terms of the Merchant Agreement shall be deemed accepted and binding upon Acquirer, on the date Acquirer accepts this Merchant Agreement by issuing a merchant identification number, and shall be coterminous with Provider’s agreement with Merchant.
Notwithstanding the foregoing, Acquirer may immediately cease providing Services and/or terminate this Merchant Agreement without notice if (i) Merchant or Provider fails to pay any amount to Acquirer when due, (ii) in Acquirer's opinion, provision of a service to Merchant or Provider may be a violation of the Operating Regulations or any Laws, (iii) Acquirer believes that Merchant has violated or is likely to violate the Operating Regulations or the Laws, (iv) Acquirer determines Merchant poses a financial or regulatory risk to Acquirer or an Association, (v) Acquirer’s agreement with Provider terminates, (vi) any Association deregisters Provider, (vii) Acquirer ceases to be a member of the Associations or fails to have the required licenses, or (viii) Acquirer is required to do so by any of the Associations.
X. Survival of Obligations
Termination or expiration of this Merchant Agreement for any reason shall not relieve Merchant of any obligations that by their nature are intended to survive termination. Without limitation, Merchant’s obligations relating to Chargebacks, Reserves, Audits, Indemnification, payment of fees, set-off rights, and compliance with Network Rules and applicable Law shall expressly survive termination of this Merchant Agreement. Specifically:
- Merchant is solely responsible to pay the amount of any chargebacks resulting from transactions submitted by Merchant under this Agreement.
- Member Bank and Service Provider are obligated to pay to Merchant any amounts remaining from the Reserve after all other then-current and contingent liabilities or obligations related to Merchant’s payment Transactions have expired (as provided for under the Network Rules)
- Merchant will reimburse Service Provider and/or Member Bank for all fines, fees, penalties, assessments, or other obligations of any kind imposed by a Network or a regulator due to a data security compromise event.
- Merchant will promptly provide any financial or other information reasonably requested by Service Provider, Member Bank, or Finvi Payments to perform credit risk, security, qualification, and other reviews related to the provision of the services, Transactions submitted, or fulfillment of obligations.
- If this Sub-Merchant Agreement is terminated for cause, Merchant acknowledges that Member Bank or Service Provider may be required to report Merchant’s business name and the names and other identification of Merchant’s principals to the Networks.
XI. Limits of Liability
Merchant agrees to provide Acquirer, via a communication with Provider, with written notice of any alleged breach by Acquirer of this Merchant Agreement, which notice will specifically detail such alleged breach, within thirty (30) days of the date on which the alleged breach first occurred. Failure to so provide notice shall be deemed an acceptance by Merchant and a waiver of any and all rights to dispute such breach.
EXCEPT FOR THOSE EXPRESS WARRANTIES MADE IN THIS MERCHANT AGREEMENT, ACQUIRER DISCLAIMS ALL WARRANTIES, INCLUDING, WITHOUT LIMITATION, ANY EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. Merchant’s sole and exclusive remedy for any and all claims against Acquirer arising out of or in any way related to the transactions contemplated herein shall be termination of this Merchant Agreement. If Merchant has any claim arising in connection with the Services, rights, and/or obligations defined in this Merchant Agreement, Merchant shall proceed against Provider and not against Acquirer, unless otherwise specifically set forth in the Operating Regulations. In no event shall Acquirer have any liability to Merchant with respect to this Merchant Agreement or the Services. Merchant acknowledges Acquirer is only providing this Merchant Agreement to assist in Provider’s processing relationship with Merchant, that Acquirer is not liable for any action or failure to act by Provider, and that Acquirer shall have no liability whatsoever in connection with any products or services provided to Merchant by Provider. If Provider is unable to provide its services to Merchant in connection with this Merchant Agreement and Acquirer elects to provide those services directly, Merchant acknowledges and agrees that the provisions of this Merchant Agreement will no longer apply and the terms of Acquirer’s then current Bank Card Merchant Agreement, which would be provided to Merchant, will govern Acquirer’s relationship with Merchant. If Provider subsequently provides its services to Merchant in connection with this Merchant Agreement, Acquirer will cease to provide such services after receipt of notice from Provider and this Merchant Agreement will govern Acquirer’s relationship with Merchant. Nothing in this Agreement expands Provider’s liability beyond what is expressly required by applicable Network Rules or law.
XII. Acceptance of American Express
In the event Merchant accepts American Express, the following terms shall apply: Capitalized terms in this Section XII are defined in the American Express Program General Merchant Requirements attached as Exhibit A to the Terms.
i. Merchant hereby authorizes Provider to submit transactions to, and receive settlement from, American Express on behalf of Merchant. If Merchant is placed in the American Express Program, Merchant shall be responsible for complying with the provisions set forth in Exhibit A to the Terms and with American Express’ Merchant Requirements (located at https://www.americanexpress.com/merchantopguide).
ii. Acquirer may disclose Transaction data, Merchant data, and other information about Merchant to American Express, and American Express may use such information to perform its responsibilities in connection with the program, promote the American Express Network, perform analytics and create reports, and for any other lawful business purposes, including marketing purposes within the parameters of this Merchant Agreement. American Express may use the information from this Merchant Agreement at the time of setup to screen and/or monitor Merchant in connection with card marketing and administrative purposes.
iii. In the event that Merchant’s estimated annual American Express charge volume becomes $1,000,000 USD or greater, Merchant may, at the discretion of Provider and American Express, become a direct card-accepting merchant under the standard American Express acceptance program and cease to be a sponsored Merchant under the Acquirer. As a direct card-accepting merchant, Merchant will be bound by the then-current American Express card acceptance agreement, and American Express’s discount and other fees and assessments shall apply.
iv. Merchant shall not assign to any third party any payments due to it under the Merchant Agreement or the Terms, and all indebtedness arising from charges will be for bona fide sales of goods and services (or both) at its establishments and free of liens, claims, and encumbrances other than ordinary sales taxes; provided, however, that Merchant may sell and assign future Transaction receivables to Acquirer, its affiliated entities and/or any other cash advance funding source that partners with Acquirer or its affiliated entities, without consent of American Express.
v. Merchant warrants that it does not hold third party beneficiary rights to any agreements between Provider and American Express and at no time will attempt to enforce any such agreements against American Express.
vi. Merchant confers on American Express the beneficiary rights, but not obligations, to the Terms and subsequent addendums between Merchant and Provider and, as such, American Express has the express right to enforce the Terms against the Merchant.
vii. Merchant may elect to opt out of accepting American Express cards at any time without directly or indirectly affecting its rights to accept other payment products by notifying Acquirer.
viii. Provider may terminate Merchant’s right to accept American Express cards if it breaches any of the provisions in this Section I or in Exhibit A.
ix. Acquirer has the right to immediately terminate a Merchant from the American Express Program for cause, fraudulent or other activity, or upon American Express’ request.
x. Merchant may not bill or collect from any American Express cardholder for any purchase or payment on the card unless chargeback has been exercised, Merchant has fully paid for such charge, and it otherwise has the right to do so.
Upon termination of the Terms or termination of Merchant’s participation in the program, Merchant must remove any and all American Express licensed marks from Merchant’s website and wherever else the American Express marks are displayed.
XIII. Reserve
A. In addition to any holdback and/or reserve rights that Provider may have in this Agreement, Member Bank may require Merchant to fund a cash reserve (“Reserve”) in an amount that reflects Member Bank’s assessment of risk, as each may determine in its discretion from time- to-time. The Reserve is a payment obligation of Member Bank, established by holding back Transaction proceeds or debiting the Merchant Settlement Account in order to potentially offset any obligations that Merchant may have to Member Bank. The Reserve is not a segregated fund that Merchant may claim to own. Member Bank is obligated to pay to Merchant any amounts remaining from the Reserve after all other then-current and contingent liabilities or obligations related to Merchant’s payment Transactions have expired (as provided for under the Network Rules).
B. The obligations due to Merchant from the Reserve will not accrue interest unless required by applicable Laws.
C. Provider will notify Merchant if a Reserve is established (including its amount) or if the amount of the Reserve is modified.
D. Member Bank may set off from the Reserve any obligations that Merchant owes to Member Bank from the Reserve.
E. Although Merchant acknowledges that the Reserve is a general obligation of Member Bank, and not a specifically identifiable fund, if any person claims that the Reserve is an asset of Merchant that is held by Member Bank, Merchant grants and acknowledges that Member Bank has a security interest in the Reserve and, at Member Bank’s request, will provide documentation to reflect this security interest.
F. Set-off. All funds that Member Bank owes to Merchant under this Merchant Agreement are subject to Merchant’s payment obligations under this Merchant Agreement. Member Bank may set off amounts Merchant owes to Member Bank against any funds that Member Bank owes to Merchant.
G. Any Reserve established pursuant to this Merchant Agreement shall continue after termination and may be retained, increased, or applied by Member Bank or Provider, in their discretion, to satisfy any existing, pending, or reasonably anticipated obligations of Merchant, including Chargebacks, fines, penalties, or indemnification obligations. Merchant acknowledges that Reserves may be held until all applicable Network risk windows have expired, as determined by Member Bank or Provider in accordance with Network Rules.
XIV. Data Security
Merchant represents that it does not have access to Card information (such as the cardholder’s account number, expiration date, and CVV2) and will not request access to such Card information from Member Bank. If the Merchant receives such Card information in connection with the services provided under this Merchant Agreement, Merchant agrees not to use it for any fraudulent purpose or in violation of any Network Rules, including but not limited to Payment Card Industry Data Security Standards (“PCI DSS”) or applicable Law. If at any time Merchant has reason to believe Card information has been compromised, Merchant will notify Member Bank promptly and assist in providing notification to the proper parties. Merchant will ensure its compliance and the compliance of any third party service provider utilized by Merchant with all security standards and guidelines that are applicable to Merchant or such third party service provider and published from time to time by Visa, MasterCard, or any other Network, including without limitation, the Visa U.S.A. Cardholder Information Security Program (“CISP”), the MasterCard Site Data Protection (“SDP”), and (where applicable) the PCI Security Standards Council, Visa, and MasterCard PA-DSS (“Payment Application Data Security Standards”) (collectively, the “Security Guidelines”).
PCI-DSS Compliance. Provider shall be in full compliance with rules, regulations, guidelines and procedures adopted by any Card Association or Payment Network relating to the privacy and security of Cardholder and Card transaction data, including without limitation the most up-to-date version of the Payment Card Industry Data Security Standard (PCI-DSS), as amended from time to time by the Payment Card Industry Security Standards Council. Detailed information pertaining to aforementioned requirements may be found at https://www.pcisecuritystandards.org. Additional information regarding security requirements may be found on the Card Association’s respective websites.
Provider Responsibility. (a) Provider SHALL BE LIABLE FOR ALL FINES, CHARGES AND PENALTIES THAT MAY BE ASSESSED BY ANY CARD ASSOCIATION OR PAYMENT NETWORK AS A RESULT OF TRANSACTIONS MADE BY MERCHANT OR PROVIDER’S NONCOMPLIANCE WITH THE PRECEDING REQUIREMENTS. (b) Provider acknowledges that it may be prohibited from participating in Card Association programs if it is determined that Provider is non-compliant. (c) Provider acknowledges that Service Provider may cause Provider to subject to an audit to verify Provider’s compliance with the foregoing security requirements. (d) Provider must notify Service Provider within twenty-four (24) hours after becoming aware of: (i) any suspected or actual data security breach; or (ii) any noncompliance by Provider with the security requirements set forth herein. (e) Provider shall, at its own expense: (i) perform or cause to be performed an independent investigation of any data security breach of Card or Transaction data by an authorized assessor acceptable to Service Provider; (ii) take all such remedial actions recommended by such investigation, Service Provider or Card Association; and (iii) cooperate with Service Provider in the investigation and resolution of any security breach.
XV. Regulatory, Network, and Sponsor Bank Cooperation
A. Cooperation with Networks, Banks, and Regulators. Merchant acknowledges that Provider and Member Bank are subject to extensive obligations under Card Network Rules, Sponsor Bank requirements, and applicable Laws, including obligations to respond to inquiries, examinations, investigations, audits, subpoenas, civil investigative demands, and other requests from Card Networks, Sponsor Banks, financial institutions, and governmental or regulatory authorities.
B. Mandatory Disclosure and Response Rights. Merchant expressly authorizes Provider and Member Bank to disclose Merchant information, Transaction data, records, and other materials to Card Networks, Sponsor Banks, regulators, and governmental authorities to the extent reasonably necessary to comply with Network Rules, Sponsor Bank requirements, or applicable Law, without further notice to or consent from Merchant.
C. Merchant Cooperation Obligation. Merchant agrees to fully, timely, and accurately cooperate with any request for information, documentation, certifications, or remediation actions relating to compliance reviews, audits, investigations, chargeback monitoring programs, data security reviews, or regulatory inquiries. Such cooperation shall include providing requested materials within the timeframes specified by Provider, Member Bank, or the requesting authority.
D. Failure to Cooperate. If Merchant fails or refuses to cooperate, or provides incomplete, misleading, or untimely information, Merchant acknowledges and agrees that Provider and Member Bank may, in their sole discretion, take any action required or deemed appropriate to comply with Network Rules, Sponsor Bank requirements, or applicable Law, including without limitation:
i. Providing information to Networks, Sponsor Banks, or regulators without Merchant participation;
ii. Suspending or terminating Services;
iii. Imposing or increasing Reserves;
iv. Withholding settlement funds; or
v. Taking remedial actions mandated by Networks, Sponsor Banks, or regulators.
E. No Limitation by Confidentiality Obligations. Merchant agrees that any confidentiality or data protection provisions of this Merchant Agreement shall not limit or restrict Provider’s or Member Bank’s ability to comply with Network Rules, Sponsor Bank requirements, or legal or regulatory obligations.
F. Survival. The obligations set forth in this Section shall survive termination of this Merchant Agreement.
XVI. Miscellaneous
This Merchant Agreement is entered into, governed by, and construed pursuant to the laws of the State of Delaware without regard to conflicts of law provisions. This Merchant Agreement may not be assigned by Merchant without the prior written consent of Acquirer. This Merchant Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors, transferees and assignees. This Merchant Agreement is for the benefit of, and may be enforced only by, Acquirer and Merchant and is not for the benefit of, and may not be enforced by, any other party. Acquirer may amend this Merchant Agreement upon notice to Merchant in accordance with Acquirer’s standard operating procedure. If any provision of this Merchant Agreement is determined to be illegal or invalid, such illegality or invalidity of that provision will not affect any of the remaining provisions and this Merchant Agreement will be construed as if such provision is not contained in the Merchant Agreement “Member Bank” as used in this Merchant Agreement shall mean a member of VISA, MasterCard and/or Discover, as applicable, that provides sponsorship services in connection with this Merchant Agreement. The Member Bank is a party to this Merchant Agreement. The Member Bank may be changed, and its rights and obligations assigned to another party by Acquirer at any time without notice to Merchant.
A. Financial Information; Audit. Merchant will promptly provide any financial or other information reasonably requested by Member Bank or Provider to perform credit risk, security, qualification, and other reviews related to the provision of the services, Transactions submitted, fulfillment of obligations to Provider or Member Bank, or Cardholders, or the financial condition of Merchant. Merchant authorizes Provider to obtain information from third parties when performing credit risk, security, qualification, and other reviews. Provider, Member Bank, or their designees may perform a reasonable audit of Provider’s records related to its performance under this Merchant Agreement with 30 days’ advance written notice to Merchant, during Merchant’s normal business hours, and at Provider’s or Member Bank’s expense, as applicable.
B. Notice of Material Change; Third Parties. Merchant will provide Provider with reasonable advance notice of any material change in the nature of Merchant’s business (including any change in control or merger, any liquidation, any transfer or sale of substantially all of its assets, or any change to Merchant’s operations that would materially affect the products or services sold, the procedures for payments acceptance, or the fulfillment of obligations to a Cardholder). Merchant will provide Provider with written disclosure identifying the third parties, systems, and services Merchant uses to receive, transmit, process, or otherwise manage information or its information technology systems (e.g., without limitation, encryption or firewall providers) related to the Transaction information or payment data processed in connection with this Merchant Agreement (these third parties must be registered providers with the Networks). Upon receipt from Merchant, Provider will promptly provide the foregoing to Member Bank or its designees.
C. Exclusion of Damages. Neither Bank nor Provider are liable under any theory of tort, contract, strict liability, or other legal theory for lost profits, lost revenues, lost business opportunities, exemplary, punitive, special, incidental, indirect, or consequential damages, each of which is hereby excluded by agreement of the parties, regardless of whether such damages were foreseeable or whether any party or any entity has been advised of the possibility of such damages. Exclusion of damages for Provider and Merchant are governed by this Agreement.
D. Limitation of Liability. Bank and Provider, in the aggregate (inclusive of any and all claims made by Merchant, whether related or unrelated) for all losses, claims, suits, controversies, breaches, or damages for any cause whatsoever (including, but not limited to, those arising out of or related to this Merchant Agreement) and regardless of the form of action or legal theory shall not exceed the lesser of (i) $100,000; or (ii) the amount of fees received by Provider for services provided under this Merchant Agreement in the immediately preceding 12 months. Limitation of liability for Provider and Merchant are governed by this Agreement.
E. Indemnification. In addition to its indemnification obligations in this Agreement, Merchant will indemnify Provider and Member Bank (including their respective affiliates, directors, officers, managers, and employees) for losses, damages, costs, or expenses (together, Losses) due to third party claims that result from Merchant’s or Merchant’s third party service providers’ gross negligence, willful misconduct, or breach of this Merchant Agreement. The indemnified party will promptly notify Merchant of any third- party claim that is subject to indemnification under this Merchant Agreement. The indemnifying party will have the opportunity to defend these claims using counsel it selects and will have the authority to enter into a settlement for monetary damages provided that it pays such amounts to the indemnified party. The parties will cooperate with regard to any other conditions of settlement as well as in providing records and access to personnel or other information reasonably necessary to defend any indemnified claims.
F. Assignment. Member Bank or Provider may each, in whole or in part, assign or transfer this Merchant Agreement or delegate or subcontract its respective rights, duties, or obligations under this Merchant Agreement without Merchant’s consent. Merchant further acknowledges that another financial institution may be substituted for Member Bank with respect to Member Bank’s obligation. Provider may replace, add, or change any processing partner, payment network, service provider, or acquiring relationship used to provide the Services, without Merchant consent, provided such replacement does not materially reduce the Services.
G. Confidentiality. No party will disclose non-public information about another party’s business (including the terms of this Merchant Agreement, technical specifications, customer lists, or information relating to a party’s operational, strategic, or financial matters) (together, “Confidential Information”). Confidential Information does not include information that: (1) is or subsequently becomes publicly available (through no fault of the recipient); (2) the recipient lawfully possesses before its disclosure; (3) is independently developed without reliance on the discloser’s Confidential Information; or (4) is received from a third party that is not obligated to keep it confidential. Each party will implement and maintain reasonable safeguards to protect the other party’s Confidential Information. The recipient may disclose another party’s Confidential Information: (1) to its directors, officers, personnel, and representatives (including those of its subsidiaries, affiliates, subcontractors, or vendors) that need to know it in connection with the recipient’s performance under this Merchant Agreement and that are bound by confidentiality obligations materially similar to those required under this Merchant Agreement; and (2) in response to a subpoena, court order, request from a regulator, or as required under applicable Laws or Network Rules. Confidential Information solely between Merchant and Provider will be handled in accordance with this Agreement.
H. Choice of Law; Waiver of Jury Trial. The parties acknowledge and agree that all disputes and this Merchant Agreement will be governed by, and construed in accordance with, Delaware law (exclusive of any conflicts and choice of law rules set forth therein); provided, however, if the dispute is solely between Merchant and Provider, such dispute will be governed by the choice of law and venue set forth in this Agreement. MERCHANT, PROVIDER, AND MEMBER BANK EACH HEREBY AGREE TO WAIVE THE RIGHT TO TRIAL BY JURY.
I. MATCH Reporting. If this Merchant Agreement is terminated for cause, Merchant acknowledges that Bank or Provider may be required to report Merchant’s business name and the names and other identification of Merchant’s principals to the Networks. Merchant expressly agrees and consents to such reporting in the event Merchant is terminated because of Member Bank’s or Provider’s termination for cause or for any reason specified by the Network(s) as cause. Furthermore, Merchant agrees to waive and hold Member Bank and Provider harmless from and against any and all claims which Merchant may have as a result of such reporting.
J. Publicity. No party will make any press release or other public disclosure concerning the terms and conditions of this Merchant Agreement without the prior written consent of the other party.
K. Entire Agreement; Waiver. This Merchant Agreement constitutes the entire agreement between the parties with respect to the subject matter discussed in this Merchant Agreement and supersedes any previous agreements and understandings. Except as provided in this Sub- Merchant Agreement, this Merchant Agreement can be changed only by a written agreement signed by all parties. A party's waiver of a breach of any term or condition of this Merchant Agreement will not be deemed a waiver of any subsequent breach of the same or another term or condition.
WITH RESPECT TO EACH OF PROVIDER, MERCHANT, AND MEMBER BANK, PERFORMANCE OF SUCH PARTY’S OBLIGATIONS SET FORTH IN THIS MERCHANT AGREEMENT CONSTITUTES SUCH PARTY’S ACCEPTANCE OF THE TERMS OF THIS MERCHANT AGREEMENT.
Exhibit A
AMERICAN EXPRESS PROGRAM GENERAL MERCHANT REQUIREMENTS
This Exhibit A applies only if Merchant accepts American Express cards. If there is a conflict between any of the following sections and any other section of the Terms as they apply to American Express cards, the following sections will govern. All references to “cards” in this Exhibit A shall refer to American Express cards unless expressly stated otherwise.
A. Card Acceptance
Merchant must accept the card as payment for goods and services sold (other than those goods and services under prohibited uses), or (if applicable) for charitable contributions made, at all of its establishments, except as expressly permitted by applicable law. Merchant is jointly and severally liable for the obligations of Merchant’s establishments under the Agreement.
B. Treatment of the American Express Brand
Except as expressly permitted by applicable law, Merchant must not:
i. indicate or imply that it prefers, directly or indirectly, any other payment products over the card,
ii. try to dissuade card members from using the card,
iii. criticize or mischaracterize the card or any of American Express’ services or programs,
iv. try to persuade or prompt card members to use any other payment products or any other method of payment (e.g., payment by check),
v. impose any restrictions, conditions, disadvantages or fees when the card is accepted that are not imposed equally on all other payment products, except for electronic funds transfer, or cash and check,
vi. suggest or require card members to waive their right to dispute any Transaction,
vii. engage in activities that harm the American Express business or the American Express brand (or both),
viii. promote any other payment products (except Merchant’s own private label card that Merchant issues for use solely at Merchant’s establishments) more actively than Merchant promotes the card, or
ix. convert the currency of the original sale Transaction to another currency when requesting authorization or submitting Transactions (or both).
Merchant may offer discounts or in-kind incentives from Merchant’s regular prices for payments in cash, ACH funds transfer, check, debit card or credit/charge card, provided that (to the extent required by applicable law): (i) Merchant clearly and conspicuously disclose the terms of the discount or in-kind incentive to Merchant’s customers, (ii) the discount or in-kind incentive is offered to all of Merchant’s 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 B, “Treatment of the American Express Brand”.
C. Treatment of the American Express Marks
Whenever payment methods are communicated to customers, or when customers ask what payments are accepted, Merchant must indicate Merchant’s acceptance of the card and display American Express’ marks (including any card application forms provided to Merchant) as prominently and in the same manner as any other payment products.
American Express’ corporate logo, the “American Express® Blue Box” logo, is the strongest visual symbol of American Express’ image. The “Blue Box” represents and reinforces the high quality service and values of American Express. The appropriate version of the “Blue Box” logo must be displayed on all point-of-purchase materials and signs. The following guidelines apply to Merchant’s use of the “Blue Box” logo in communications:
- Maintain at least 1/3 “X” (where “X” is equal to the height of the Blue Box logo) between the logo and any accompanying element;
- The “Blue Box” logo minimum size is 3/8” and 1/2" is the preferred size; and
- The “Blue Box” logo must always be shown in the pre-approved “American Express blue” or, in one- or two- color communications, black.
Merchant must not use the American Express marks in any way that injures or diminishes the goodwill associated with the American Express mark, nor in any way (without American Express’ prior written consent) indicate that American Express endorse Merchant’s goods or services. Merchant shall only use the American Express marks as permitted by the Agreement and shall cease using our marks upon termination of the Agreement.
D. Treatment of Card Member Information
Any and all card member information is confidential and the sole property of the issuer, American Express or its affiliates. Except as otherwise specified, Merchant must not disclose card member information, nor use nor store it, other than to facilitate Transactions at Merchant’s establishments in accordance with the Agreement.
E. American Express Liability
MERCHANT ACKNOWLEDGES AND AGREES THAT IN NO EVENT SHALL AMERICAN EXPRESS, ITS AFFILIATES, AGENTS, SUCCESSORS, OR ASSIGNS BE LIABLE TO 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 AGREEMENT
F. Arbitration Agreement (as to Claims involving American Express)
In the event that Merchant or Provider is not able to resolve a Claim against American Express, or a claim against Provider or any other entity that American Express has a right to join, this section explains how Claims may be resolved through arbitration. Merchant 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 Merchant nor Provider nor American Express will have the right to litigate or have a jury trial on that Claim in court or have a jury trial on that Claim. Further, Merchant, Provider, and American Express will not have the right to participate in a representative capacity or as a member of any class pertaining or be a named party to a class-action with respect to any Claim for which any party elects arbitration. Arbitration procedures are generally simpler than the rules in court, and discovery is more limited. The arbitrator’s decisions are as enforceable as any court order and are subject to very limited review by a court. Except as set forth below, the arbitrator’s decision will be final and binding. Other rights Merchant, Provider, 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 Arbitration Agreement 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, or to an arbitrator appointed pursuant to section 5 of the Federal Arbitration Act, 9 U.S.C. §§ 1-16 (FAA). Any arbitration hearing that Merchant attends shall take place in New York unless all parties agree to an alternate venue.
ii. Limitations on Arbitration
- If any party elects to resolve a Claim by arbitration, that Claim will be arbitrated on an individual basis. There will be no right or authority for any Claims to be arbitrated on a class action basis or on bases involving Claims brought in a purported representative capacity on behalf of the general public, other merchants or service providers, or other persons or entities similarly situated. The arbitrator’s authority is limited to Claims between Merchant, Provider, and American Express. Claims may not be joined or consolidated unless all parties to this Agreement agree otherwise. An arbitration award and any judgment confirming it will apply only to the specific case brought by Merchant, Provider or American Express and cannot be used in any other case except to enforce the award as between Merchant, Provider and American Express. This prohibition is intended to, and does, preclude Merchant from participating in any action by any trade association or other organization against American Express. Notwithstanding any other provision in this Agreement, if any portion of these Limitations on Arbitration is deemed invalid or unenforceable, then the entire Arbitration provision (other than this sentence) will not apply.
iii. Previously Filed Claims/No Waiver
- Merchant, Provider, 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. Merchant, Provider, or American Express may choose to delay enforcing or to not exercise rights under this arbitration provision, 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.
iv. Arbitrator’s Authority
- The arbitrator will have the power and authority to award any relief that would have been available in court, including equitable relief (e.g., injunction, specific performance) and cumulative with all other remedies, shall grant specific performance whenever possible. The arbitrator shall have no power or authority to alter the Agreement or any of its separate provisions, including this section, nor to determine any matter or make any award except as provide in this section.
v. Split Proceedings for Equitable Relief
- Merchant, Provider, or American Express may seek equitable relief in aid of arbitration prior to arbitration on the merits to preserve the status quo pending completion of the arbitration. This section 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, including legal fees, to be paid by the party against whom enforcement is ordered.
vi. Small Claims Court
- American Express will not elect to use arbitration under this section for any Claim Merchant properly files 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
- This Arbitration Agreement 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 civil procedure or rules of evidence, provided that any party may ask the arbitrator to expand the scope of discovery by doing so in writing and copying any other parties, who shall have fifteen (15) days to make objections, and the arbitrator shall notify the parties of his/her decision within twenty (20) days of any objecting party’s submission. If a Claim is for $10,000 or less, Merchant or American Express 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 and reasoned opinion explaining his/her award. The arbitrator’s decision shall be final and binding, except for any rights of appeal provided by the FAA. If a Claim is for $100,000 or more, or includes a request for injunctive relief, (a) any party to this Agreement shall be entitled to reasonable document and deposition discovery, including (x) reasonable discovery of electronically stored information, as approved by the arbitrator, who shall consider, inter alia, whether the discovery sought from one party is proportional to the discovery received by another party, and (y) no less than five depositions per party; and (b) within sixty (60) days of the initial award, either party can file a notice of appeal to a three-arbitrator panel administered by the selected arbitration organization, which shall reconsider de novo any aspect requested of that award and whose decision shall be final and binding. If more than sixty (60) days after the written arbitration decision is issued, the losing party fails to satisfy or comply with an award or file a notice of appeal, if applicable, the prevailing party shall have the right to seek judicial confirmation of the award in any state or federal court where Merchant’s headquarters or Merchant’s assets are located.
viii. Confidentiality
- The arbitration proceeding and all testimony, filings, documents, and any information relating to or presented during the proceedings shall be deemed to be confidential information not to be disclosed to any other party. All offers, promises, conduct and statements, whether written or oral, made in the course of the Claim resolution process, including but not limited to any related negotiations, mediations, arbitration, and proceedings to confirm arbitration awards by either party, its agents, employees, experts or attorneys, or by mediator or arbitrator, 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 involving any of the parties or non-parties; provided that evidence that is not otherwise admissible or discoverable shall not be rendered inadmissible or non-discoverable as a result of its use in the negotiation, mediation, or arbitration.
ix. Costs of Arbitration Proceedings
- Merchant will be responsible for paying Merchant’s share of any arbitration fees (including filing, administrative, hearing or other fees), but only up to the amount of the filing fees Merchant would have incurred if Merchant had brought a Claim in court. American Express will be responsible for any additional arbitration fees. At Merchant’s written request, American Express will consider in good faith making a temporary advance of Merchant’s 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 Merchant’s favor against American Express for an amount greater than any final settlement offer American Express made before any arbitration award, the arbitrator’s award will include: (1) any money to which Merchant is 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 Merchant.
xi. Definitions
- For purposes of this section only, (i) “American Express” includes any of its affiliates, licensees, predecessors, successors, or assigns, any purchasers of any receivables, and all agents, directors, and representatives of any of the foregoing, (ii) “Merchant” includes Merchant’s 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 Provider or any other entity that American Express has the right to join in resolving a Claim, including, a transaction using an American Express product or network or regarding an American Express policy or procedure.
E. American Express Liability
If a Merchant closes any of its establishments, Merchant must follow these guidelines:
i. Follow your payment processing company’s guidelines for notification of establishment closing.
ii. Policies must be conveyed to the card member prior to completion of the charge and printed on the copy of a receipt or charge record the card member signs. See the Terms, Section 4.9 for additional information.
iii. If not providing refunds or exchanges, post notices indicating that all sales are final (e.g., at the front doors, by the cash registers, on the charge record and on websites and catalogs).
iv. Return and cancellation policies must be clearly disclosed at the time of sale.
v. For advance payment charges or delayed delivery charges, you must either deliver the goods or services which you have already charged the card member or issue credit for any portion of the charge for which you have not delivered the goods or services.