Merchant Agreement
This agreement is entered into by and between ___________________________________________
(“Merchant”) and First State Bank (“Bank”).
WHEREAS, as a part of the Bank’s credit card program, Bank is authorized by VISA, U.S.A. INC.
(“VISA”) and/or MASTERCARD INTERNATIONAL, INC. (“MCI”) to use the respective service marks,
technical information, communications network and certain copyrighted material of VISA and MCI, all of
which shall hereafter be referred to as the ‘Card Plan”; and
WHEREAS, Merchant desires to participate in the Card Plan and honor cards bearing the service
marks of VISA and/or MCI in connection with sales of merchandise or services by merchant.
NOW, THEREFORE, Merchant AND Bank MUTUALLY AGREE TO THE FOLLOWING TERMS AND
CONDITIONS:
1. As used in this Agreement, the term “Card” shall mean a credit or debit card bearing either the service marks of VISA or the service marks of MCI including, but not limited to, Classic Cards, Business Cards, Debit Cards, Check Cards and Gold Cards. All references to “sales drafts” and “credit vouchers” in this Agreement shall be deemed to include transaction records transmitted electronically or on magnetic tape.
2. Merchant may choose to accept Debit MasterCard cards only, Credit MasterCard cards only or both Debit and Credit MasterCard cards. Likewise, merchant may choose to accept Debit Visa cards only, Credit Visa cards only, or both Debit and Credit Visa cards.
3. Merchant will process, through Bank, sales drafts and credit vouchers initiated only at the Merchant’s business by use of the Card. Merchant warrants that all sales drafts tendered to Bank will represent obligations of a cardholder in amounts set forth therein only for merchandise sold or services rendered and shall not involve any element of credit for any other purpose or business. Merchant represents that, as of the date any sales draft is tendered for payment, Merchant has no knowledge or notice that would impair the validity of the sales draft or its collectability.
4. Merchant shall display at prominent locations, card emblems and other promotional materials/signage as may be provided by Bank. Merchant shall comply with all applicable VISA and MCI rules and regulations concerning the use of service marks and copyrights owned by VISA and MCI, respectively.
requested by Bank to meet its obligation under law (including its obligation under the Fair Credit Billing Act) or otherwise respond to questions concerning cardholder accounts.
6. Merchant will NOT (I) impose minimum or maximum dollar amounts as a condition for honoring cards; (II) impose a surcharge or assess discount rate for credit card transactions [provided, however, discounts for cash are permitted]; (III) request personal identification, or a phone number, as a condition for acceptance (IV) obtain any security interest from the cardholder in connection with any sales draft; (V) discriminate as to price, service, or otherwise against any person using or desiring to use a credit card, except as permitted by law; (VI) make any cash refund to the cardholder for any credit transaction; (VII) process sales draft for any amount of cash (VIII) intentionally withhold sales drafts or credit vouchers for any period of time without prior knowledge or consent of Bank [Bank reserves the right to refuse presentation of sales drafts and credit vouchers which exceed established time limits]; (IX) use multiple sales drafts for a single card use, with the exception of partial payments or delayed delivery deposits which are clearly marked on the original and subsequent sales drafts representing the balance; (X) honor or present sales drafts that relate to sales or services sold or performed by anyone other than Merchants direct employees for sales and services other than those arising out of merchants usual trade or business; (XI) sell, purchase, provide or otherwise disclose the cardholder’s account information or other cardholder personal information to any third party other then Bank, merchant’s agents and processing organizations for the purpose of assisting the Merchant in its business, or as required by law, unless Merchant obtains the cardholders written consent to the disclosure; (XII)present sales drafts until the goods have been shipped or the services have been preformed and merchant has otherwise performed all of its principal obligations to the customer, except as permitted by paragraph 5(ix); or (XIII) present to Bank directly or indirectly, any sales drafts or credit voucher that Merchant knows or should have known to be fraudulent or not authorized by the cardholder, that results from a transaction outside Merchants normal course of business, that results from a transaction not involving Merchant, or that contains the account number of a Card account issued to Merchant.
7. Unless specifically authorized in accordance with procedures established by Bank, Merchant shall not issue a sales draft on the basis of a telephone or mail order. Merchant is [X] is not [ ] authorized to accept transactions placed by mail or telephone. In the event merchant is authorized to process such sales drafts for payment without the Card’s presentment at the time of the transaction or the cardholder’s signature being obtained, all such sales will be at merchants risk and subject to offset if charged back. Further, if merchant is authorized to process card-not-present sales drafts, merchant agrees to obtain CVC 2 and CVV 2 numbers from cardholder. Merchant is expressly forbidden from storing such numbers.
8. Merchant shall comply with all laws applicable to Merchant, Merchant’s business, and any card transaction, including, without limitation, all state and federal consumer credit and customer protection statutes and regulations. Merchant will provide Bank with all information relating to transactions through the use of card necessary for Bank to comply with such laws and regulations of Bank, VISA and MCI. Merchant agrees to comply with instructions contained in any operating guide that Bank, VISA and/or MCI may issue and amend from time to time. Merchant also agrees to use payment system software that does not store sensitive card information and complies with the Payment Card Industry Data Security Standard (PCI DSS). Bank may issue rules and regulations relating to the operation of the merchant program as well as subsequent amendments or supplements to such rules, all of which will be binding upon the merchant at the time the merchant is served notice.
9. Merchant agrees to indemnify and hold Bank harmless from any claim against Bank relating to any transaction involving Cards or sales transactions with Merchant or Merchant’s refusal to engage in such sales transactions as may be made by anyone by way of defense, dispute, offset, counterclaim or affirmative action, and Merchant shall reimburse Bank for all expenses and costs, including attorney’s fees with regard thereto. Bank liability to Merchant shall reimburse with respect to any card transaction shall not exceed the amount of the sales draft in connection with that transaction less any applicable discount. Bank shall in no event be liable for any incidental or consequential damages whatsoever.
be subject to subsequent review, verification and final audit by Bank Merchant agrees that in case of any error, Bank my charge or credit Merchants said account, without notice, for any deficiencies or overages that may occur. The preparation and delivery to Bank by Merchant of sales drafts shall constitute an endorsement to Bank by Merchant of each sales draft. Merchant hereby waives notice of default or non-payment, protest, or notice of protest, demand for payment and any other demands or notices in connection with this agreement or any sales draft. Merchant hereby consents to extensions of time granted or compromises made with any cardholder liable on any sales draft without affecting Merchant’s liability. Merchant agrees that all of its obligations under this Agreement shall be secured by all deposit accounts, including the principal deposit discount, maintained by Merchant with said Bank. Should the balance of Merchant’s principal deposit account be insufficient to cover a debit to that account, Merchant shall pay the additional amount to Bank on demand. Before or after such demand, Bank may assert a right of setoff against any other deposit account(s) maintained by Merchant with Bank.
Should Merchant and Bank agree to effect settlement of credits and debits from the Designated Account by means of ACH in conjunction with the processing of credit Sales transactions as anticipated herein; Merchant authorizes Bank to initiate debit and credit entries to the Designated Account (the details of which are set out below). Merchant agrees to maintain sufficient funds in Designated Account to cover debit transactions. By signing this authorization, Merchant states that it has authority to agree to such transactions and that the Depository Account indicated is a valid and legitimate account for the handling of these transactions. The authority is to remain in effect until Bank receives written notice from Merchant revoking it. This authorization is for the payment of SALES, RETURNS, FEES and, CHARGEBACKS, or any other sums owed between the Parties. Merchant also certifies that the appropriate authorizations are in place to allow Merchant to authorize this method of settlement. All changes to the identification of the Depository Account under this authorization must be made in writing. Merchant understands that if the information supplied as to the ABA Routing Number and Account Number of the Depository Account is incorrect, and funds are incorrectly deposited, Bank will attempt to assist Merchant in the recovery of such funds but has no liability as to restitution of the same. Bank’s assistance in recovering the funds, where available will be billed to Merchant at Bank’s current hourly rate for such work.
In accordance with the terms above transfer funds to/from account set out below: Account Name: ABA Routing Number:
071208297
Account Number:
11. Bank shall be entitled to a discount fee for each sales transaction accepted by Bank pursuant to this Agreement. Bank shall compute a discount fee at a rate established by Bank. Bank reserves the right to amend or alter the rate(s) of discount fee imposed on individual sales drafts(s) or credit voucher(s) deposited with Bank when Merchant fails to make deposits on a timely basis. The discount rate(s) shall be applied to the amount of sales drafts plus credit vouchers received by Bank. The discount rate may be collected by Bank by debit to Merchant’s designated deposit account on a daily basis, monthly basis or other basis as determined by Bank. The discount fee will be charged against Merchant’s principal deposit account at said bank, without advance notice sent to Merchant by Bank. Merchant agrees to pay to Bank the discount fee based on the rate(s) established at the time this agreement is entered into by merchant and Bank, which are as follows:
DISCOUNT RATES FLAT CREDIT CARD RATE FLAT DEBIT CARD RATE CREDIT CARD QUALIFIED CREDIT CARD NON-QUALIFIED VISA % % % % MASTERCARD % % % %
Qualified rate transactions are transactions that are consumer credit or debit swiped, mag-stripe read and authorized and settle for the same amount. These transactions will qualify for best discount rate.
12. The amount of the discount rate(s) and monthly fee(s) are guaranteed not to change for a maximum of six (6) months, at which time Bank may decrease or increase the discount rate(s) and/or fee(s). Discount rate(s) and fee(s) can be adjusted at any time thereafter upon written notification to Merchant from Bank.
13. Bank will charge to merchants principal deposit account without advance notice, monthly service charged as noted:
Help Desk service $_________ Per authorization $_________
Per non-bankcard $_________ Per item $_________
Maintenance $_________ Statement fee $_________
Miscellaneous $_________
14. Bank will charge to merchant’s account the following additional one time, yearly, monthly or per occurrence fees as agreed:
Set-up (per location) $_________ (one time) Imprinter rental $__________ (yearly) Terminal/Printer rental $_________ (per month) Imprinter rental $__________ (monthly)
Chargeback Fee $__________ (per occurrence)Miscellaneous $__________
Bank, at its cost and expense, will from time to time upon Merchant’s request, deliver authorization terminal/printers and/or imprinters (equipment) that may be used in the First State Bank Merchant program. Merchant agrees to pay Bank the monthly or yearly rental fee noted above per terminal/printer or imprinter. This fee shall be subject to change upon written notification to Merchant from Bank. In order to induce Bank to rent this equipment to Merchant, Merchant agrees to:
(i)
not sell, pledge, loan or in any way allow a security interest to attach to the equipment.(ii)
in the event this Agreement is terminated, Merchant will return all equipment to Bank, or in the alternative, Bank shall be permitted to enter the premises of Merchant for the purpose of taking possession of and removing the equipment.(iii)
Merchant shall be responsible for any damage to the equipment after delivery, except for reasonable wear and tear. In no event will Merchant’s liability for such damage exceed the original purchase price of the equipment.
15. Merchant shall notify Bank if Merchant elects to accept Cards issued by American Express, Discover, or Diners Club through the use of an electronic terminal. Any third-party, or “non-bankcards” accepted are subject to fees including, but not limited to, installation and authorization expenses as defined by Bank. Merchant understands that non-bankcard rates, fees and other contractual elements are negotiated and settled directly between Merchant and third-party Card issuer.
in violation of law or rules or regulations of any governmental agency, federal, state, local, or otherwise; (X) the sales draft was not completed according to this Agreement or instructions contained in any Merchant operating guide issued by Bank, VISA or MCI; (XI) Merchant’s redeposit of a sales draft previously charged bank without express consent of cardholder and bearing cardholder’s signature; (XII) Bank reasonably determines that Merchant has violated the terms, conditions, covenants, warranties, or other provisions of this Agreement; (XIII) Bank reasonably determines that the sales draft or credit voucher evidencing the transaction is fraudulent or that the related transaction is not a bona fide transaction arising in the ordinary course of Merchant’s business or is subject to any claim illegality, cancellation, recession, avoidance, or offset for any reason whatsoever, including without limitation, negligence, fraud or dishonesty on the part of Merchant or Merchant’s agents or employees; (XIV) the issuer of the Card charges the sales draft back to Bank for any reason not otherwise listed above.
17. Within a reasonable time following notice of charge-back of a transaction to Merchant, Bank shall return to Merchant any sales draft or other evidence of the transaction. Merchant shall reimburse Bank for any fee or charge imposed by or through VISA or MCI as a result of extraordinary charge-back activity or of any failure by Merchant to comply with the provisions of the Agreement or VISA and MCI rules.
18. Bank shall have the sole right to receive payment on sales drafts purchased by Bank. Merchant agrees not to sue or make any collection thereon, except as may be specifically authorized by Bank. In the event of such authorization, Merchant agrees to hold all collections, if any, in trust for Bank and deliver same, in kind, immediately upon request.
19. Merchant will notify Bank no later than thirty (30) days prior to any change in business name, ownership, structure, or type of merchandise or services sold. Failure to promptly do so will be considered a breach of contract and subject Merchant to termination of this Agreement.
20. Merchant shall, upon demand, re-purchase all outstanding sales drafts purchased by Bank on which recourse may be exercised under this Agreement where the Merchant: (I) fails to comply with any terms of this Agreement; or (II) becomes insolvent or ceases to do business. Bank shall have the right to charge Merchant’s account without notice in such cases for all outstanding sales drafts.
21. Merchant agrees that Bank may investigate or obtain credit information on the Merchant relating to Merchant’s credit and financial responsibility and likewise investigate or obtain credit information on any owner or principal of the Merchant. Merchant agrees to provide Bank with accurate, valid, signed and dated financial statements within 5 business days of Bank request. Bank may periodically examine and verify all records of Merchant pertaining to sales drafts sold to Bank hereunder. Bank reserves the right to inspect Merchant’s business premise(s) upon request. Bank may request an escrow, personal guarantee, or security deposit at any time during the course of this Agreement should Merchant’s credit-worthiness decrease or Bank risk increase all as reasonably determined by Bank.
22. From time to time, Bank may amend any provision or provisions of this Agreement by mailing a written notice to Merchant of the amendment at least thirty (30) days prior to the effective date of the amendment, and the amendment shall become effective unless Bank receives Merchant’s notice of termination of this Agreement before such effective date. Amendments to this Agreement which are required due to changes in VISA bylaws and/or Operating Regulations or the MCI Operating Rules and Regulations or any law or judicial decision shall become effective on such shorter period of time as Bank may specify if necessary to comply with the requirement of VISA or MCI or with any law or judicial decision.
23. This Agreement shall become effective when signed by both parties and shall remain in full force and effect until terminated as follows:
(i)
Either party may terminate this agreement without cause upon thirty (30) days prior written notice to that effect.rules or regulations of VISA or MCI. Bank may not provide Merchant with advance notice of the termination;
(iii)
Upon the effective date of any termination, Merchant’s rights hereunder to enter into Card transactions, to deposit sales drafts with Bank, and to use forms, promotional material, any other items provided by Bank hereunder or any of the VISA or MCI service marks or logos shall cease, but each party’s obligations in connection with any sales drafts or credit vouchers accepted by Bank (whether before or after such termination), including, without limitation, Merchant charge-back obligations, shall survive such termination.(iv)
If Bank terminates this Agreement without giving the Merchant advance notice, for the period during which any previously presented sales drafts are subject to charge-back to Bank pursuant to the then effective operating regulations of VISA or MCI, as applicable, Bank shall have the right to suspend Merchant’s right to withdraw any funds from any deposit account maintained by Merchant with merchant bank account, including, without limitation, Merchant’s principal deposit account; provided, however, that Bank shall not suspend the right in a fashion that would deprive Merchant of the use of its deposit account or accounts beyond the extent required to assure Bank ability to recover from Merchant, by exercise of Bank right to set off against such deposit account or account or accounts, the amount of each and every sales draft as to which there remains a potential charge-back right as against the Bank under said operating regulations.Merchant understands that Bank cannot determine with certainty whether a sales draft will be charged back to Bank until the charge-back period expires as to the sales draft. Bank shall not exercise its rights under this subparagraph (iv) unless it has reasonable cause to believe or suspect that a significant dollar amount or number of sales drafts are likely to be charged back to Bank because of the breach or suspected breach of this Agreement by Merchant or because of Bank previous experience with charge-backs related to Merchant’s sales drafts. Bank agrees to reinstate Merchant’s right to withdraw funds from its deposit accounts upon delivery to Bank of a bond, a letter of credit, or another undertaking or collateral security reasonably believed by Bank to protect Bank interest relative to such charge-backs.
(v)
For purposes of this paragraph 22, Merchant acknowledges that because of the potential for damage to Bank in the event of a material breach or repeated breaches of this Agreement by Merchant or because of charge-backs, the term “reasonable cause to believe or suspect” shall be determined solely in Bank good-faith judgment and without regard to the actual occurrence of a breach of charge-backs.(vi)
Following termination, Merchant shall upon request provide Bank with all original or copies of transaction records (sales drafts and credit vouchers) required to be retained at the time of termination.24. Should suit be brought by either party to enforce the terms of this Agreement, the prevailing party shall be entitled to recover from the other its costs and expenses of suit, including its reasonable attorneys’ fees.
25. This agreement may be assigned by the Bank to another processing Bank or Independent Sales Organization.
26. Failure by Bank to enforce one or more of the provisions of this Agreement shall not constitute a waiver of the right to enforce the same or any other provision in the future.
27. Merchant acknowledges notification of limited acceptance option and chooses to accept the following card(s):
Visa Debit ___ MasterCard Debit Both
28. Notices to Merchant shall be deemed given when personally delivered or when deposited in the U.S. Mail, postage prepaid, addressed as shown in the signature block of this Agreement. Notices to Bank shall be deemed given when received by Bank at its address shown in the signature block below. The address of either party can be changed by notice to the other party.
