Merchant Agreement contract

Written by giampaolo.ferradini created 27 October 2018 last edit 2 months, 2 weeks ago
Merchant Agreement contract

Photo by Fabian Gieske on Unsplash

Main Merchant Agreement

ECOM only”

Note: For use with Merchants who will themselves be a merchant using the Services of Bank XYZ, but also wish Bank XYZ to provide the Services to affiliates of the Merchant. Such “Merchant Affiliates” will need to separately sign an Affiliate Merchant Agreement on the basis of the template included as Schedule 4 to this Merchant Agreement.

Merchant legal name:

[…]

Company account name:

[…]

Merchant contact details:

[please insert name, email and phone number for key merchant contact for this Agreement on the date of signing]

Bank XYZ contact person:

[…]

Template date:

4 July 2017

Bank XYZ B.V.

Nieuwezijds Voorburgwal 11

1012 DJ Amsterdam

The Netherlands

+31 20 440 1220

amsterdam@BankXYZ.com

  1. Agreement

    1. Parties

      This is an agreement between:

      [Insert full official merchant entity legal name] a company registered in […] under company number […] whose registered office is at [insert registered address];

      Further referred to as the Merchant

      and

      Bank XYZ B.V. a private limited company registered in the Netherlands under company number 34499528 whose registered office is at Nieuwezijds Voorburgwal 11, 1012 DJ, Amsterdam, the Netherlands;

      Further referred to as “Bank XYZ

      for the delivery of payment processing and ancillary services as provided by Bank XYZ to the Merchant, referred to as the Services as further defined and described in this Merchant Agreement.

    2. Merchant Affiliates

      Bank XYZ will on request of Merchant also provide the Services under the terms of this Merchant Agreement to affiliates of Merchant who sign an Affiliate Merchant Agreement on the basis of the template included in Schedule 4 hereto and which are on the effective date of such Affiliate Merchant Agreement under the Control of Merchant or of a parent company of Merchant also Controlling Merchant (“Merchant Affiliates”). Control” is deemed to exist if a party directly or indirectly owns 50% or more of the outstanding voting shares in another company or in any other way can exercise management control over the other party. Merchant and Merchant Affiliates will be jointly and severally liable for all liabilities and obligations arising towards Bank XYZ under the Merchant Agreement and Affiliate Merchant Agreements.

      If Bank XYZ has a local subsidiary of Bank XYZ available for contracting in the country where the relevant Merchant Affiliate is located, the parties may agree to have the Merchant Affiliate contract with the local subsidiary of Bank XYZ under the terms of this Merchant Agreement (amended as may be required to meet local legal requirements and/or local Scheme Rule requirements).

    3. Effective Date

      This Merchant Agreement will become effective on: […] (the ‘’Effective Date’’).

    4. Definitions and terms

      This Merchant Agreement includes the Bank XYZ Terms and Conditions (Schedule 1) and the definitions included therein shall also apply to this Merchant Agreement. The current version of the Bank XYZ Terms and Conditions can also be found in the Customer Area of the Bank XYZ website. In case of any discrepancies or inconsistencies between the provisions of this Merchant Agreement and the Bank XYZ Terms and Conditions, the provisions in this Merchant Agreement shall prevail.

      The Bank XYZ Terms and Conditions relating to POS and POS Terminals will not apply to this Merchant Agreement. Bank XYZ and Merchant may agree to add POS related services to the Merchant Agreement at a later stage in a separate Addendum.

  2. Merchant Details

    1. Registration and KYC information Merchant

      In order to enable Bank XYZ to comply with anti-terrorism, financial services and other applicable laws and regulations and KYC (‘Know Your Customer’) requirements imposed by the Scheme Owners and Acquirers, Merchant has provided information about itself, its activities and its shareholders as included in Schedule 2 to this Merchant Agreement. Merchant warrants unconditionally that all information as included in Schedule 2 is correct and up-to-date.

      Merchant will provide Bank XYZ with at least three Business Days prior written notice of any change of the information reflected in Schedule 2. Merchant will on first request from Bank XYZ provide such additional information and supporting documentation regarding its identity and that of its shareholders and activities as Bank XYZ may reasonably determine to need to ensure compliance with applicable laws and regulations and Scheme Owner and Acquirer KYC requirements. Bank XYZ will only activate the Services for Merchant (‘go live’) if the applicable KYC requirements are fulfilled. Merchant agrees that Bank XYZ may run further checks on Merchant’s identity, creditworthiness and background by contacting and consulting relevant registries and government authorities.

      Bank XYZ’s acceptance of Merchant as user of the Services and the relevant Payment Methods is strictly personal and limited to the use by Merchant of the Services for payment of Merchant’s own products and services. Merchant may not use the Services to facilitate the payment for products or services sold by third parties and therefor may not resell the Services to third parties.

      Merchant hereby authorizes Bank XYZ to submit information received from Merchant (including the KYC information included in Schedule 2) to the relevant Scheme Owners and Acquirers to obtain permission for providing access to their Payment Methods for Merchant.

    2. Permitted Merchant Products and Services

      Merchant wishes to obtain the Services of Bank XYZ with respect to payments for the Merchant Products and Services described in the table below. The acceptance by Bank XYZ of Merchant as customer is strictly linked to this description of the Merchant Products and Services. Merchant must ask prior written approval for any change or addition to the Merchant Products and Services prior to submitting payment requests therefor.

      The Merchant shall not use the Services for the payment of the Merchant Products and Services where it is illegal to offer or provide these to or from the relevant country and/or which are stated in Bank XYZ's Restricted Services and Products List as included in Schedule 3 to this Agreement. This list may be updated by Bank XYZ where needed to ensure legal compliance, compliance to Scheme Rules and/or to reduce exposure to potentially fraudulent transactions. Bank XYZ will inform Merchant of updates of this list via written notifications on the Customer Area of the Bank XYZ website.

      Merchant Products and Services:

      […]

      Detailed Description:

      [NOTE: ensure sufficient detail to allocate MCC code]

      Average fulfilment period (time between payment and full completion of delivery obligations):

      […]

      Target countries for product/service:

      […]

      Sales channel
      for ECOM: relevant URL(s) used

      […]

      WARNING: Bank XYZ’s acceptance of Merchant and the inclusion of the Merchant Products and Services in the table above should not be interpreted as an advice or opinion of Bank XYZ as to the legality of the Merchant Products and Services and of its intended use of the Services therefore. Merchant is and remains solely responsible to ensure the Merchant Products and Services sold are compliant with the applicable Scheme Rules and applicable laws in its country of origin and the countries it customers are based in. Merchant declares by signing this Agreement that it has inquired itself about the Scheme Rules of the Payment Methods it desires to use and the relevant applicable laws in advance. If Bank XYZ in its reasonable discretion determines that there is a significant risk that the Merchant Products and Services are not, or are no longer, compliant with applicable laws and/or are in violation of applicable Scheme Rules, Bank XYZ has the right to terminate its Services.

    3. Settlement details

      Bank XYZ will use the settlement details provided by Merchant as reflected in Schedule 2 for Settling received funds for processed Transactions to Merchant.

  3. Service

    1. Services

      This Agreement covers the following specific Services to be delivered by Bank XYZ to Merchant in accordance with the descriptions thereof in the Bank XYZ Terms and Conditions. Related then current technical and procedural details can be found in the related manuals on the Customer Area:

      • Payment processing (routing of Transaction messages on behalf of Merchant to and from the relevant Scheme Owners or Acquirers);

      • Acquiring via Bank XYZ (for some Payment Methods, a direct acquiring agreement for use of the Payment Method between Merchant and the relevant Scheme Owners or Acquirers may be required);

      • Reconciliation support (only if Payment Method is Acquired and Settled via Bank XYZ);

      • Use of standard Fraud Control Tooling in Customer Area;

      • Back office access via Customer Area and use of all available reporting and management options.

    2. Payment interface and PCI compliance

      1. Payment Interfaces

        Merchant will use the Hosted Payment Pages of Bank XYZ to have its customers submit payment details for Card Not Present (CNP) Transactions to be processed by Bank XYZ. Merchant may customize the Hosted Payment Pages by using the ‘skinning options’ made available by Bank XYZ.

        Merchant may also use Bank XYZ’s ‘Client Side Encryption’ method to connect to the Bank XYZ payment platform to submit CNP Transactions for processing by Bank XYZ. Bank XYZ’s Client Side Encryption is a P2PE (Point-to-Point Encryption) solution for payments. With this solution, the Merchant can take credit card payments directly on its own website by encrypting Transaction Data in the browser (client) so that the Cardholder data is never visible to the Merchant. For this connection method, the PCI Compliance requirements of Merchant are currently limited to completing a PCI Self-Assessment Questionnaire (‘’SAQ’’).

      2. PCI DSS Compliance

        Where Bank XYZ as part of the Services provided to Merchant will handle Cardholder data (like Credit Card Numbers, CVC codes expiry date etc.) on behalf of Merchant, Bank XYZ will be responsible to ensure the security of such Cardholder data in accordance with applicable PCI DSS requirements as imposed by the Card Schemes from the moment Bank XYZ first receives such Cardholder data via the relevant Payment Interface and this responsibility remains for as long as Bank XYZ continuous to store, process and transmit such Cardholder data.

        Merchant must itself also ensure it at all time complies with the relevant PCI DSS requirements from the Cards Schemes with respect to Merchant’s handling of Cardholder data and Merchant’s use of the relevant Payment Interface. Bank XYZ may from time to time be required under applicable Scheme Rules to verify or ensures Merchant’s compliance, e.g. by requiring Merchants to fill out SAQs prescribed by the Scheme Owners. Failure to comply with such requirements may cause Bank XYZ to be required under applicable Scheme Rules to suspend Card related Services until such requirements are fulfilled.

    3. Payment Methods

      The latest overview of supported Payment Methods can be found on the Bank XYZ website. Support for each Payment Methods is subject to acceptance by the relevant Scheme Owner, which such Scheme Owner may withhold or withdraw in its discretion at any time. Some Scheme Owners or Acquirers may require the Merchant to enter into a direct agreement with the Acquirer or Scheme Owner before the Merchant may use the relevant Payment Method. Merchant can request Payment Methods to be activated for its account via the Bank XYZ support desk or via Merchant’s account manager. Via the Customer Area Merchant can configure the usage settings for each Payment Method and/or temporarily or permanently stop them from being offered to customers of Merchant.

      WARNING: Merchant acknowledges its responsibility to take notice of and comply with the relevant terms, limitations and usage conditions and restrictions imposed by the relevant Scheme Owners (the Scheme Rules) with respect to the use of their Payment Methods, which may be changed from time to time by such Scheme Owners in their discretion. Bank XYZ has no influence on or control over the Scheme Rules or the acceptance policies of the Acquirers and Scheme Owners, but will use all reasonable efforts to assist Merchant in being accepted by the relevant Scheme Owners and Acquirers.

    4. Use of Bank XYZ Services

      In accordance with the applicable laws on hacking and computer crime, Merchant shall only use the Bank XYZ Services for the purposes as agreed in the Merchant Agreement and shall specifically not perform or allow to be performed any actions detrimental to the security or performance of the Bank XYZ Services without Bank XYZ’s prior written consent.

  4. Pricing

    1. Processing fees

      Bank XYZ charges a Processing Fee for each Transaction (applies to Card not Present (CNP) Transactions) submitted to Bank XYZ for processing as follows:

      Price Tier

      (Transactions/month)

      0

      1,000

      1,001


      5,000

      5,001

      25,000

      25,001

      125,000

      125,000

      +

      Bank XYZ Processing Fee (per Transaction in relevant price tier)

      € 0.100

      € 0.095

      € 0.090

      € 0.085

      € 0.080

      Each month Processing Fees for a minimum volume of 1,000 Transactions are charged to the Merchant.

      These Processing Fees cover the basic payment processing services of Bank XYZ and are in addition to the Payment Method specific fees as set out below.

    2. VISA / MasterCard fees for Acquiring via Bank XYZ

      The fees for Visa / MasterCard Credit and Debit Card Transactions Acquired via Bank XYZ shall be calculated following a transparent “Interchange plus” pricing model. This means that Bank XYZ charges Merchant for each Transaction all fees as applied for the relevant type of Transaction by the Card Scheme (which includes the ‘interchange’ fee and if applicable any other ‘scheme fees’ charged by the Card Scheme for such Transactions, collectively referred to as the Interchange Fees), increased with an Acquiring mark-up. Indications of the applicable Interchange Fee price levels can be found via the Customer Area on the Bank XYZ website.

      The applicable Acquiring mark-up for CNP Credit and Debit Card Transactions shall be calculated each month in line with the following tiered structure (monthly turnover level for Visa/ MasterCard Card volume in that month):

      Price Tier

      Monthly Turnover From

      Monthly Turnover To

      Applicable mark-up per Transaction in relevant Price Tier (calculated over Payment amount)

      1

      € 0

      € 250,000

      0.50 %

      2

      € 250,000

      € 1,250,000

      0.45 %

      3

      € 1,250,000

      € 3,250,000

      0.40 %

      4

      € 3,250,000

      € 6,250,000

      0.35 %

      5

      € 6,250,000

      +

      0.30 %

    3. Other Payment Method fees

      The current pricing for the use of other Payment Methods are set out in Bank XYZ’s standard Payment Method Pricelists for CNP Payment Methods, which can be found on the Bank XYZ website www.Bank XYZ.com and is also available upon request.

    4. Additional services

      1. Management fee for directly contracted Payment Methods

        If Bank XYZ agrees to process Transactions for Merchant where Merchant has a direct contract with the relevant third party Acquirer or the relevant Scheme Owner, then Bank XYZ will charge a management fee of 0.20% over the value of Transactions routed to such Acquirer or Scheme Owner by Bank XYZ on Merchant’s behalf.

      2. Bank XYZ RevenueProtect+ (Optional)

        The use of Bank XYZ RevenueProtect, as available via the Customer Area, is included in the standard Processing Fee. As an additional option, Merchants can select to use the Bank XYZ RevenueProtect+ package. This premium package, which is intended for Merchants with complex risk profiles, includes the following tools and resources:

        • ShopperDNA Network Calculation: ShopperDNA looks behind the transaction and creates a holistic picture of a shopper's history on your platform, across all devices and networks. Using sophisticated proxy piercing and device fingerprinting, we can identify the connections between fraudulent and legitimate transactions and give the “true” history of a shopper. From this, you can create Risk Engine rules to monitor a shopper's ShopperDNA profile, effectively stopping fraud networks in their tracks;

        • ShopperDNA Network Visualization: Along with Bank XYZ's breakthrough ShopperDNA Network Calculation, we provide advanced neural network visualization of those networks, allowing fraud analysts and data scientists the ability to trace the connections between different shopper entities;

        • Device Fingerprinting: Using advanced device attribute matching, we are able to provide a best-in-class device fingerprinting solution usable across our platform for fraud prevention and conversion optimization;

        • Risk Engine Optimizer: A controlled machine-learning tool that runs analysis and simulation over a Merchant’s previous transaction history (including settled transactions, refused transactions, chargebacks and actual risk settings). The Risk Engine Optimizer provides suggestions to optimize risk settings, while allowing Merchants the freedom and transparency to make these changes themselves, effectively removing the need to perform expensive data analyses every time fraudsters change tactics or targets;

        • Manual Risk Case Management: A section in the Customer Area where Merchant defined high-risk transactions can be placed in a separate queue for manual review. The holistic interface enables risk managers the ability to cancel transactions prior to capture, capture transactions or refund transactions after capture if they deem such transactions to be fraudulent;

        • Manual Review Reporting: Robust reporting on the performance of a Merchant's manual review cases. It gives a comprehensive breakdown on the number of transactions cancelled, captured and refunded by Merchant once they were queued for manual review.

        The Bank XYZ RevenueProtect+ package is charged per Transaction as follows:

        Price Tier

        (Transactions/month)

        0

        1,000

        1,001

        -

        5,000

        5,001

        25,000

        25,001

        125,000

        125,001

        +

        Bank XYZ RevenueProtect+ Fee

        (per Transaction in relevant price tier)

        € 0.100

        € 0.095

        € 0.090

        € 0.085

        € 0.080

      3. Subscription fee, settlement fees

        There will be no monthly subscription fee or settlement fee applied for Merchant.

      4. Refund fee

        For Refunds by means of a bank transfer for Payment Methods such as for iDeal, bank transfer and direct debit payments a Refund fee of € 0.20 is applied. This Refund fee does not apply to refunds on Credit Cards and Debit Cards, for which only a Processing Fee is charged (plus Interchange Fees charged by the Scheme Owner if applicable).

      5. Chargeback Fee

        The Chargeback Fee for Payment Methods Acquired via Bank XYZ, which will be charged for each Transaction for which a Chargeback request is issued, is € 7.50 (plus Interchange Fees charged by the Scheme Owner if applicable).

        For each successfully defended and reversed Chargeback for Payment Methods Acquired via Bank XYZ a Chargeback reversed fee of € 0.10 is applied.

      6. Merchant accounts

        Merchant may request the setup of up to ten extra Merchant accounts on the Bank XYZ platform. Merchant may only use additional Merchant accounts for its own business and not for that of third parties. For more additional Merchant accounts additional charges may be applicable as agreed between the parties.

  5. Deposit and settlement

    1. Settlement frequency

      Subject to the Merchant’s Deposit being at the applicable Deposit Level, Bank XYZ will twice per week settle to the Merchant, the sums received from the relevant Acquirers and Scheme Owners intended for Merchant, withholding the related amounts due to Bank XYZ as per the terms of this Agreement.

    2. Deposit

      The Deposit is a sum of funds retained up to the applicable variable Deposit Level by Bank XYZ from Payments to be Settled to Merchant to cover for potential Refunds, Chargebacks, Fines, paid but not yet fully delivered Merchant Products and Services and other potential financial obligations of Merchant towards Bank XYZ and the Scheme Owners.

      The Deposit Level will initially be set at the following amount on the basis of the information provided by Merchant for its anticipated initial use of the Services. Bank XYZ may adjust the Deposit Level as set out in the Bank XYZ Terms and Conditions to keep it in line with the then current Transaction volume and risk profile of the Merchant. Bank XYZ will build up the Deposit by withholding the relevant amounts from Settlement.

      Initial Deposit Level:

      [TBC after underwriting review]

    3. Currency conversion

      As standard and where supported by the relevant Acquirers and Scheme Owners, Bank XYZ will process Transactions and Settle funds to the Merchants in the currency in which the Transaction was submitted for processing by the Merchant, provided Merchant makes a bank account available in the relevant currency to enable Settlement in such currency to the Merchant. An up-to-date list of Settlement currencies can be provided upon request.

      Where Bank XYZ is requested to apply a currency conversion to Settle funds in another currency than the currency in which the Transaction was submitted for processing, Bank XYZ will apply a Forex Management spread of 1.2% if the conversion is made between the Settlement currencies. If the conversion involves a currency that is not included in the list of Settlement currencies, then a Forex Management spread of 3% will apply. As reference rate for Forex Management, Bank XYZ uses the daily FX mid-rate from Oanda (as published on www.oanda.com).

  6. Various

    1. Pricing in Euro

      All prices and fees not expressly specified in another currency are in EUR (€).

    2. Tiered pricing

      All volume based pricing is tiered pricing, meaning that each Transaction is priced against the price tier it is in. For example for Processing Fees, the 1,000th Transaction in a month is priced at € 0.10 and the 1,001st Transaction in that month is priced at € 0.095.

    3. Taxes

      All fees of Bank XYZ are exclusive of VAT and other taxes as applicable and all such applicable taxes are payable by Merchant. Merchant is responsible to provide Bank XYZ with all information necessary for Bank XYZ to comply with its legal and tax obligations, including but not limited to a valid VAT number.

      Merchant agrees to defend, hold harmless and indemnify Bank XYZ from and against any VAT, turnover and other taxes or levies including penalties, interests and surcharges ("Taxes") due on any product or service of Merchant (including but not limited to any Transactions, Merchant Products and Services) and costs or damages related to such Taxes. Merchant shall (i) apply all reasonable efforts to ensure that Bank XYZ cannot be held liable for any Taxes and costs or damages related to such Taxes, (ii) promptly inform Bank XYZ of any such liability and (iii) provide Bank XYZ with all relevant information and documentation in that respect.

Signatures

This Agreement has been signed in duplicate. By signing this Agreement, Merchant explicitly confirms that it has been provided with and accepts each of the Schedules hereto, as listed below.

Signed for and on behalf of:

Signed for and on behalf of:

[Merchant legal name]

\s1\

___________________________

Name: \n1\

Title: \t1\

Date: \d1\

Bank XYZ B.V.

\s2\

_________________________

Name: \n2\

Title: \t2\

Date: \d2\

\s3\

_________________________

Name: \n3\

Title: \t3\

Date: \d3\

Schedules which form part of this Merchant Agreement:

Schedule 4 – Template Affiliate Merchant Agreement

Parties

This is an agreement between:

[Insert full legal name Merchant Affiliate] a company registered in […] under company number […] whose registered office is at [insert registered address];

Further referred to as the “Merchant Affiliate”;

Bank XYZ B.V. a company registered in the Netherlands under company number 34259528 whose registered office is at Simon Carmiggeltstraat 6-50, 1011 DJ, Amsterdam, the Netherlands;

Further referred to as “Bank XYZ

Considering

  • Bank XYZ and [Full legal name of Merchant that signed the framework merchant agreement] (“Merchant”) signed a Merchant Agreement with an effective date of [date] for the provision by Bank XYZ of payment processing services (the “Merchant Agreement”);

  • Merchant and Merchant Affiliate wish Bank XYZ to also provide the Services as described in the Merchant Agreement to Merchant Affiliate for its business in [region/jurisdiction];

  • Merchant Affiliate has provided information about itself, its activities and its shareholders as included in Schedule 1 to this Affiliate Merchant Agreement. Merchant Affiliate warrants unconditionally that all information as included in Schedule 1 is correct and up-to-date.

Agreement

  1. Merchant Agreement

    Bank XYZ will provide Merchant Affiliate with the Services as described in and under the terms of the Merchant Agreement, which terms are deemed repeated in and applicable to this Affiliate Merchant Agreement except as explicitly otherwise agreed herein. References to “Merchant” in the Merchant Agreement are deemed to be references to Merchant Affiliate and references to “Merchant Agreement” are deemed to be references to this Affiliate Merchant Agreement.

  2. Merchant Products and Services

    Merchant Affiliate wishes to use the Services for the following Merchant Products and Services:

    Merchant Products and Services:

    […]

    Detailed Description:

    [NOTE: ensure sufficient detail to allocate MCC code]

    Average fulfilment period (time between payment and full completion of delivery obligations):

    […]

    Target countries for product/service:

    […]

    Sales channel:

    - For ECOM: relevant URL(s) used

    - For POS: fill in “POS”

    […]

  3. Term

    This Affiliate Merchant Agreement will have the same term and will simultaneously automatically terminate with the Merchant Agreement in case the Merchant Agreement terminates for any reason. This Affiliate Merchant Agreement can itself also be separately terminated by either party in accordance with the Bank XYZ Terms and Conditions.

  4. Deviating / additional terms

    [insert here if needed terms for local Service aspects (e.g. local service options / limitations, agreed support of third party Acquirer, local special pricing)]

Signatures

Signed for and on behalf of:

Signed for and on behalf of:

[Full legal name of Merchant Affiliate]

___________________________

Bank XYZ B.V.

_________________________

Name:

Title:

Date:

___________________________

Name:

Title:

Date:

Name:

Title:

Date:

_________________________

Name:

Title:

Date

Schedule forming part of this Affiliate Merchant Agreement:

Schedule 1: KYC form Merchant Affiliate [NOTE: must be filled out with the details of the Merchant Affiliate and its business and must not be a copy of the KYC form for the original Merchant Agreement. However it may be that some details will be the same.]

Written by

giampaolo.ferradini

Giampaolo Ferradini

giampaolo.ferradini

Kjuicer's Ceo. Ex fund manager, trader & banker, 12yrs in startups. I do research on everything I find interesting.

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