(a) Merchant will establish and maintain an Account at a depository institution approved by Servicers. Merchant will maintain sufficient funds in the Account to satisfy all obligations, including the fees, Chargebacks and returns contemplated by this Agreement. Merchant irrevocably authorizes Servicers to debit the Account for fees, Chargebacks, returns, fines and any other penalties or amounts owed under this Agreement. In the event the Account lacks sufficient funds, Merchant and Guarantors authorize Servicers, without notice, to debit any bank account in their name(s) or the name of any affiliated entity. Merchant must obtain prior consent from Servicers to change the Account. If Merchant does not obtain such consent, Servicers may immediately terminate this Agreement and may take other action necessary to protect their interests.
(b) Servicers will settle all valid Card transactions to the Account subject to the terms of this Agreement. Merchant authorizes Servicers to initiate reversal or adjustment entries and initiate or suspend such entries.
(c) Servicers, in their sole discretion, shall grant Merchant provisional credit for Card transaction amounts, subject to receipt of final payment by Servicers and subject to all Chargebacks and other amounts owed to Servicers under this Agreement.
(d) Merchant authorizes Servicers to initiate debit/credit entries to the Account, as the Account may be changed from time to time and to any other account maintained by Merchant at any institution, all in accordance with this Agreement. In the event Merchant changes the Account, this authorization will apply to the new Account. This authorization will be effective until both: (i) Servicers have received written notification from Merchant terminating this authorization, and (ii) all obligations of Merchant to Servicers have been paid in full. Merchant may be required to provide to Servicers with a voided Account check and/or fill in the required Account numbers on Merchant Application.
(e) If the Account is closed or is otherwise unavailable to Servicers for ACH debit, Merchant consents to Servicers locating additional deposit accounts or assets by using any means legally available. In this event, Merchant waives all rights to their privacy in favor of Servicers until such time as all unpaid Chargebacks and fees owed to Servicers have been paid in full.
1.08 Reserve Account.
In addition to any other rights granted to Servicers under this Agreement, Merchant hereby authorizes Servicers to establish a Reserve Account, with or without prior notice to Merchant, at any time prior to, during or after termination of this Agreement, to ensure the recovery of any liabilities owed them or reasonably anticipated by Servicers in their sole discretion to be owed by Merchant pursuant to this Agreement. Servicers may also require as a condition of providing continued services, that Merchant fund and maintain a Reserve Account with Servicers as security against any costs, losses or expenses incurred by Servicers in connection with the provision of services to Merchant. Merchant’s obligation to maintain any Reserve Account shall survive the termination of this Agreement by a period of two hundred seventy (270) days (or longer depending on Merchant’s product and business practices) during which time Servicers’ right, title and interest therein shall continue. In addition Merchant further agrees:
(a) Liabilities to be paid from the Reserve Account include, but are not limited to, those arising out of actual and/or potential post termination Chargebacks, as well as any and all post-termination fees, charges and expenses due or anticipated to be due Servicers from Merchant
(b) The Reserve Account shall be in such amount Servicers deem reasonable under the circumstances. The Reserve Account may be funded and/or replenished by Servicers by withholding from Merchant’s Card transaction proceeds, and/or withholding or withdrawing from, or freezing all or any part of, the Account and/or any other deposit accounts maintained by Merchant wherever found by any means legally available. Unless Servicers agree otherwise in writing with Merchant, the Reserve Account shall not bear interest.
(c) Servicers may enforce their right, title and interest in the Reserve Account without notice or demand being first made to Merchant. Servicers right to sums owed them by Merchant pursuant to this Agreement shall in no way be limited by the balance or existence of the Reserve Account. Servicers’ right, title and interest with respect to the Reserve Account shall survive the termination of this Agreement.
(d) Servicers may exercise their rights under this Agreement to collect any amounts due to Servicers including, without limitation, rights of set-off and recoupment. Merchant shall have no right to withdraw funds or debit the Reserve Account.
(e) It is stipulated and agreed that the funds placed in the Reserve Account are trust fund monies legally and exclusively held for the benefit of Servicers. In the event of Bankruptcy proceedings, Servicers may exercise their rights under this Agreement to debit the Reserve Account for amounts due Servicers regardless of the prepetition or post-petition nature of the amount due Servicers. In the event of a Bankruptcy proceeding, Merchant also agrees that it will not contest any motion for relief from the automatic stay which Servicers may file to debit the Reserve Account.
(f) Servicers may retain funds in the Reserve Account for as long as Merchant may be liable to make payments under this Agreement. Funds are typically retained in the Reserve Account for a minimum of two hundred seventy (270) days from the date of the oldest Card transaction in question or the date of termination, whichever is longer, and may be retained longer depending on the nature of Merchant’s Card transaction activity. Servicers will have sole control of the Reserve Account. In the event of a Bankruptcy proceeding Servicers do not consent to the assumption of this Agreement. Nevertheless, if this Agreement is assumed, Merchant agrees that in order to establish assurance of future performance within the meaning of 11 U.S.C. Sec 365, as amended from time to time, Merchant must establish a Reserve Account in an amount satisfactory to Servicers.
Merchant acknowledges and agrees, notwithstanding anything set forth in this Agreement to the contrary, that any and all credits provided to Merchant by Servicers for collected Sales Drafts under this Agreement are provisional and cannot be equitably finalized until the respective periods permitted for Chargebacks, returns, fees, fines, penalties and other adjustments to be assessed or implemented have all expired under this Agreement. These Chargebacks, returns, fees, fines, penalties and other adjustments are an integral part of the credit to be given to Merchant in respect of such Sales Draft. To the extent that any Chargeback, return, fee, penalty, fine or other adjustment is assessed or implemented, Servicers may exercise their right of recoupment with regard to the credit provisionally paid for the respective Sales Draft. In the absence of this remedy, Merchant acknowledges that it would be overpaid for the respective Sales Draft, and such overpayment shall be held in trust by Merchant as the legal and equitable property of the Servicers. Merchant also acknowledges that, in order for rights and obligations of the parties to be fairly and equitable administered, the various Sales Drafts presented by Merchant to Servicers shall constitute a single, integrated transaction, and not a series of separate or discrete transactions.
1.10 Security Interest.
To secure Merchant’s and Guarantor’s respective performance under this Agreement, including without limitation Merchant’s obligations arising out of Chargebacks or returns, Merchant and Guarantor each hereby grants to Servicers, pursuant to the Uniform Commercial Code of the State of Michigan, as amended from time to time , a security interest in all of Merchant’s and Guarantor’s personal assets and property, including but not limited to the following assets and property: (a) the electronic terminal, printer, imprinter and imprinter plate; (b) all Sales Drafts, ACH deposits, credit drafts, and in all Accounts and Reserve Accounts, regardless of source, wherever found, standing in the name of Merchant and/or Guarantor, whether established or designated and maintained pursuant to this Agreement or not; and (c) the proceeds and products of such assets and property. In the event of Merchant’s default under this Agreement, Merchant and Guarantor(s) stipulate: (i) that all personal accounts standing in their names shall be subject to this Agreement and ACH debit; and (ii) all ACH debits, whether made against the Account or Guarantor’s personal account, shall bear a commercial account code designation (CCD) for purposes of electronic collection via the ACH system, and (iii) Merchant and/or Guarantor irrevocably consent to Servicers using any means available to locate such deposit accounts until such time as all amounts due have been paid. Servicers may enforce this security interest as applicable by:
(a) Making an immediate debit/charge via the ACH system to any deposit account standing in the name or names of Merchant and/or Guarantor, without notice or demand of any kind; and/or interrupting the electronic transmission of funds to any account through the Automated Clearing House (ACH) system;
(b) Freezing the entire Account and/or Reserve Account, without notice or demand of any kind, upon Servicers determination that Merchant has breached any term of this Agreement;
(c) Taking possession of any or all of Merchant’s or Guarantor’s personal assets or property;
(d) Placing a receiver within Merchant’s place of business without notice or bond to intercept and collect all income derived from Merchant’s operations until such time as any indebtedness owed to Servicers arising under this Agreement has been satisfied in full;
(e) By obtaining either a writ of attachment or a writ of possession without bond pertaining to Merchant’s and/or Guarantor’s personal assets or property.
Merchant and Guarantor hereby irrevocably authorize the Servicers at any time and from time to time to file any financing statements and amendments thereto, in any jurisdiction required for the proper perfection of the Servicers’ security interest, and shall provide any statement or notice that Servicers determine to be necessary to preserve and protect this security interest. Merchant’s and/or Guarantor’s granting of this security interest in no way limits Merchant’s and Guarantor’s liabilities to Servicers under this Agreement.
1.11 Fiduciary Relationship.
Whenever Merchant and/or Guarantor has a deposit held with Servicers that arose from or is subject to this Agreement, to which, pursuant to this Agreement, Merchant and/or Guarantor is not entitled, Merchant’s and Guarantor’s entitlement to such deposit shall be as a fiduciary of Servicers until any claim by Servicers against Merchant and Guarantor has been resolved. Merchant and Guarantor each agrees that its failure to repay, within five (5) calendar days of notification by Servicers, funds to which Merchant or Guarantor is not entitled to, shall result in a presumption that Merchant and/or Guarantor intends to misappropriate such funds. Merchant and Guarantor each further agrees that in the event Servicers seek to enforce their rights herein in a court of competent jurisdiction, that any receivership, temporary restraining order, preliminary injunction, writ of attachment or writ of possession may be issued against Merchant and/or Guarantor without bond.
As a primary inducement to Servicers to enter into this Agreement with Merchant, Guarantor, whether by signing the Merchant Application or by acknowledging consent by electronic means, jointly and severally (where more than one Guarantor), and unconditionally and irrevocably, guarantee the continuing full and faithful performance and payment by Merchant of each of its duties and obligations to Servicers pursuant to this Agreement, as it now exists or is amended from time to time, with or without notice. Guarantor understands further that Servicers may proceed directly against Guarantor without first exhausting its remedies against any other person or entity responsible therefore to it or any security held by Servicers. This guaranty will not be discharged or affected by the death of the Guarantor, will bind all heirs, administrators, representatives and assigns and may be enforced by or for the benefit of any successor of Servicers. Guarantor understand that the inducement to Servicers to enter into this Agreement is consideration for this guaranty, and that this guaranty remains in full force and effect even if the Guarantor receives no additional benefit from the guaranty. 1.13 Payment of Fees and Other Amounts Owed. Merchant shall pay to Servicers the fees and charges set forth on the Merchant Application, any separate schedule of fees and the fee provisions of this Agreement. Merchant agrees that Servicers may collect their fees and other amounts owed under this Agreement by netting against the proceeds of Merchant's processing activity. The Account will be debited through ACH for such amounts and for any other fees, charges or adjustments incurred by Merchant and associated with the services provided under this Agreement. Merchant is obligated to pay all taxes and other charges imposed by any governmental authority on the services provided under this Agreement. Servicers have the right to change fees as set forth in this Agreement.
1.13 Payment of Fees and Other Amounts Owed.
Merchant shall pay to Servicers the fees and charges set forth on the Merchant Application, any separate schedule of fees and the fee provisions of this Agreement. Merchant agrees that Servicers may collect their fees and other amounts owed under this Agreement by netting against the proceeds of Merchant's processing activity. The Account will be debited through ACH for such amounts and for any other fees, charges or adjustments incurred by Merchant and associated with the services provided under this Agreement. Merchant is obligated to pay all taxes and other charges imposed by any governmental authority on the services provided under this Agreement. Servicers have the right to change fees as set forth in this Agreement.
1.14 General Fees.
Additional fees specific to each service offering are set forth in the Pricing Schedule section of the Merchant Application.If no per transaction fee is specified, AXP transactions will be subject to the same communications fee as VISA/MasterCard/Discover, specified on the Merchant Application.
Different discount rates and other fees may apply to different types of Card transactions. For example, a "Qualified Discount Rate" will be charged on certain types of Card transactions, including without limitation, swiped cards on which the full magnetic stripe has been read; a higher "Mid-Qualified Discount Rate" will be charged on other types of Card transactions, including without limitation, keyed cards at retail locations or keyed cards with valid AVS response and order number for "card not present" transactions; and a higher "Non-Qualified Discount Rate" will be charged on other types of Card transactions, including without limitation, Business, Corporate, Purchase, International, or Government cards, keyed cards where AVS is not present or missing any of the required data elements, batches not closed within one calendar day of transaction, all rewards cards as defined by the card issuers, and any Pre-Authorized sale that is not processed/captured within 7 business days. Merchant is encouraged to review certain of these additional rates and fees in Article VII below.
A Merchant is billed a transaction fee each time communication is made with the host. This fee is assigned by the agent or sales representative at the time Merchant submits its Merchant Application. Merchant may also be assessed a PCI DSS Non-Compliance fee monthly, until they validate compliance which includes confirming the use of PA DSS validated payment applications. Merchant may also be required an Early Termination Fee as fully set forth in Section 1.16 below. Furthermore, Merchant may also be assessed a fee in connection with their enrolment in the MyBizPerks Program as fully set forth in Section 6.01 below.
Additional charges that may occur from time to time include chargeback fees, re-presentment fees and retrieval fees. A monthly minimum fee will be deducted unless Merchant has met its minimum processing volume. The standard delivery method for Monthly Statements is in an electronic, online version that will be generated each month and located on the Merchant Portal.
SERVICERS MAY MODIFY ALL FEES PAYABLE BY MERCHANT UNDER THIS AGREEMENT, INCLUDING THOSE DETAILED IN THE MERCHANT APPLICATION AND ANY SEPARATE SCHEDULE OF FEES, BY PROVIDING NOTICE TO MERCHANT OF CHANGES TO SUCH FEES; provided, however, that a minimum of thirty (30) days advance notice will be provided to Merchant in the case of any fee increase or introduction of a new fee related to MasterCard and Maestro, and in such event Merchant will have the right to terminate MasterCard or Maestro acceptance under this Agreement within ninety (90) days of receiving notice of such fee increase or introduction of a new fee. Notwithstanding the foregoing, this termination right as to MasterCard acceptance will not apply to any fee increase made in accordance with a predetermined fee schedule included in this Agreement.
1.15 Card Industry Pass Through Fees.
If fees are not listed on the Merchant Application or separate schedule of fees to the contrary, the following fees are applicable. These pass through fees are costs incurred by Merchant as a result of accepting VISA, MasterCard, AXP, Discover Network and JCB Card transactions. The names of the fees that will be charged on Merchant’s statement will be listed below.
VISA Assessment, MasterCard Assessment, Discover Network Assessment, AXP Network Access Fee
VISA Fixed Acquirer Network Fee (VISA FANF) MasterCard Licensing Fee
1.16 Term: Termination.
(a) This Agreement shall not become effective until the Merchant Application is approved by Servicers. Any party may terminate this Agreement or one or more services delivered under this Agreement at any time with or without cause by providing written notice to the other parties and such termination will become effective on the date specified by such notice. If Merchant terminates this Agreement, Servicers shall have thirty (30) days from date of receipt of the notice to close Merchant's Account. All rights and obligations of the parties existing hereunder as of the effective time of termination shall survive the termination of this Agreement. If Merchant has applied for Card processing and is approved by Servicers, and if Merchant exercises its option to terminate this Agreement within three (3) years after such approval, then Merchant will pay to Servicers a termination fee as follows: all monthly fees assessed to Merchant under the Agreement and due to Servicers for the remainder of the then existing term of the Agreement, including all minimum monthly fee commitments, shall be immediately due and payable to Servicers, and Merchant hereby authorizes Servicers to deduct the greater of (a) $295 and (b) all remaining monthly fees (provided in no event shall either such amount exceed the maximum amount permitted by applicable state law) from Merchant’s account referenced in Section 1.07, or to otherwise withhold the total amount from amounts due to Merchant from Servicers, immediately on or after the effective date of termination. If the Merchant’s account does not contain sufficient funds for the debit or the amount cannot be withheld by Servicers from amounts due to Merchant, Merchant shall pay Servicers the amount due within ten (10) days of the date of servicers’ invoice for same. The payment of accelerated monthly fees as described here is not a penalty, but rather is hereby agreed by the parties to be a reasonable amount of liquidated damages to compensate Servicers for its termination expenses and all other damages under the circumstances in which such amounts would be payable.
Notwithstanding the foregoing, if within forty-five (45) days of Merchant’s execution of this Agreement, Merchant provides Agent with written notice that it wishes to terminate this Agreement immediately and, if applicable, returns at Merchant’s expense all terminals and other equipment made available to Merchant without charge (other than shipping, handling or similar charges) for use in connection with this Agreement, then Merchant shall not be responsible for the payment of the termination fee set forth in this Section 1.16(a). However, Merchant shall remain responsible for compliance with all other obligations, terms and conditions set forth in this Agreement, including but not limited to the payment of all fees, charges, fines, penalties, damages and other amounts incurred or arising under any other provision of this Agreement.
(b) Servicers may terminate this Agreement immediately without prior notice if (i) they have reason to believe that fraudulent Card transactions or other activities prohibited by this Agreement are occurring at any Merchant location, (ii) such action is taken to prevent loss to Servicers or Card Issuers, (iii) Merchant appears on any Card Association's security reporting, (iv) Servicers’ merchant acceptance criteria changes, (v) Merchant breaches this Agreement, (vi) Merchant violates the rules and regulations of a Card Association, or (vi) Merchant engages in conduct that creates harm to or loss of goodwill to any Card Association. All rights and obligations of the parties existing hereunder as of the effective time of termination shall survive the termination of this Agreement. An administrative account closure fee of $500.00 will be charged if Merchant if terminated for any of the reasons set forth in subparts (i) through (iii) of this section.
(c) Merchant will be assessed a software recovery fee if it: (i) received a free promotional copy of any third party software (such as QuickBooks or Quicken) upon entering in this Agreement, and (ii) terminated this Agreement, in its sole discretion, within two years of acceptance by Servicers. Such software recovery fee shall be determined by Servicers in their sole discretion, but will be no greater than the then current direct, retail price charged to the public to purchase such software. This software recovery fee shall be in addition to any termination fee set forth in this Agreement.
(d) If any case or proceeding is commenced by or against Merchant under any federal or state law dealing with insolvency, Bankruptcy, receivership or other debt relief, this Agreement shall simultaneously therewith automatically terminate, and any amounts due to Servicers under this Agreement shall become immediately due and payable, without the necessity of any notice, declaration or other act by Servicers. Notwithstanding such termination, Servicers, in their sole discretion, may determine that consent to Merchant's subsequent assumption of this Agreement is in Servicers’ best interests. In such event, the assumption will be made under terms and conditions that are acceptable to Servicers and comply with the applicable federal or state laws governing such assumption.
(e) Merchant acknowledges and agrees that a Card Association can limit or terminate processing in its sole discretion and at any time.
1.17 Effect of Termination.
Without limiting the provisions of Section 1.53 below, all of Merchant’s obligations under this Agreement which arise or are incurred prior to the effective date of termination shall survive the expiration or termination of this Agreement.
1.18 Third Parties.
(a) Merchant may be using special products, services or software provided by a third party to assist Merchant in processing Card transactions, including Authorizations and settlements, or accounting functions. Merchant is responsible for ensuring compliance with the requirements of any third party in using its products, services or software. This includes making sure Merchant has and complies with any software updates and ensuring that such software satisfies all security standards required under the Rules (including PA DSS and PCI DSS), as set forth more fully below. Servicers have no responsibility for any Card transaction until that point in time Servicers receive data about the Card transaction.
(b) Merchant will notify Servicers prior to the use of any electronic Authorization or data capture terminal or software provided by any entity other than Servicers or its authorized designee ("third party terminals") to process Card transactions. If Merchant elects to use such third party terminals, Merchant agrees that the third party provider of the terminal is Merchant's agent and Merchant is liable for the acts and omission of its agent and the terminals for failing to comply with the Rules, this Agreement and any applicable federal and state law.
(c) Servicers may provide Merchant with reference links to websites operated by third parties ("Third Party Websites"). These links are provided as a convenience only. Such Third Party Websites are not under the control of Servicers. Servicers are not responsible for the content of any Third Party Website or any link contained in a Third Party Website. Servicers do not review, approve, monitor, endorse, warrant, or make any representations with respect to Third Party Websites, and the inclusion of any link is not and does not imply an affiliation, sponsorship, endorsement, approval, investigation, verification or monitoring by Servicers of any information contained in any Third Party Website. Access to any Third Party Website is at Merchant's own risk, and Merchant acknowledges and understands that linked Third Party Websites may contain terms and privacy policies that are different from those of Servicers. Servicers are not responsible for such provisions, and expressly disclaim any liability for them.
1.19 Limitation of Liability.
(a) MERCHANT AGREES AND ACKNOWLEDGES THAT SERVICERS SHALL HAVE NO LIABILITY, EITHER IN TORT, CONTRACT OR IN COMBINATION THEREOF, FOR CLAIMS ARISING FROM TRANSACTIONS PROCESSED UNDER THIS AGREEMENT EXCEPT IN THE CASE OF GROSS OR WILLFUL MISCONDUCT ON THE PART OF SERVICERS. ANY SUCH CLAIMS ARE SUBJECT TO LIMITATIONS SET FORTH BELOW AND IN NO EVENT SHALL SERVICERS BE LIABLE FOR SPECIAL, CONSEQUENTIAL, INDIRECT OR EXEMPLARY DAMAGES, INCLUDING LOST PROFITS, REVENUES OR LOST BUSINESS OPPORTUNITIES.
(b) THE LIABILITY, IF ANY, OF SERVICERS, UNDER THIS AGREEMENT WHETHER TO MERCHANT OR TO ANY OTHER PARTY, WHATEVER THE BASIS OF LIABILITY, SHALL NOT EXCEED IN THE AGGREGATE THE DIFFERENCE BETWEEN (I) THE AMOUNT OF FEES PAID BY MERCHANT TO SERVICERS DURING THE MONTH IN WHICH THE TRANSACTION OUT OF WHICH THE LIABILITY AROSE OCCURRED, AND (II) ASSESSMENTS, CHARGEBACKS, RETURNS AND ANY OFFSETS AUTHORIZED UNDER THIS AGREEMENT AGAINST SUCH FEES WHICH AROSE DURING SUCH MONTH. IN THE EVENT MORE THAN ONE MONTH WAS INVOLVED, THE AGGREGATE AMOUNT OF SERVICERS LIABILITY SHALL NOT EXCEED THE LOWEST AMOUNT DETERMINED IN ACCORD WITH THE FOREGOING CALCULATION FOR ANY ONE MONTH INVOLVED. IN NO EVENT WILL THE LIABILITY OF SERVICERS UNDER THIS AGREEMENT EXCEED $50,000.
(c) EXCEPT AS EXPRESSLY PROVIDED HEREIN, SERVICERS MAKE NO OTHER WARRANTY, EXPRESS OR IMPLIED, REGARDING THE SOFTWARE AND SERVICES, AND NOTHING CONTAINED IN THIS AGREEMENT WILL CONSTITUTE SUCH A WARRANTY. SERVICERS DISCLAIM ALL IMPLIED WARRANTIES, INCLUDING THOSE OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT AND TITLE. SERVICERS FURTHER DO NOT REPRESENT OR WARRANT THAT THE SERVICES WILL ALWAYS BE AVAILABLE, ACCESSIBLE, UNINTERRUPTED, TIMELY, SECURE, ACCURATE, COMPLETE, OR ENTIRELY ERROR-FREE. SERVICERS FURTHER EXPRESSLY DISCLAIM ANY LIABILITY FOR UNAUTHORIZED ACCESS OF FACILITIES OR TO MERCHANT'S DATA OR PROGRAMS DUE TO ACCIDENT, ILLEGAL OR FRAUDULENT MEANS OR DEVICES USED BY ANY THIRD PARTY, OR OTHER CAUSES BEYOND SERVICERS’ REASONABLE CONTROL.
1.20 Indemnification by Merchant.
Merchant agrees to indemnify and hold harmless Servicers, and their affiliates, employees, agents, representatives, members, or stockholders, from and against any and all claims, actions, proceedings, and suits and all related liabilities, damages, settlements, penalties, fines, costs or expenses (including reasonable attorneys'fees and other litigation expenses) arising out of or relating to:
(a) any dispute between Merchant and a Cardholder or check writer or customer, or any Sales Draft or ACH deposit paid for by Servicers;
(b) any actual or alleged action or omission by Merchant that would constitute a breach of any representation, warranty, or obligation of Merchant set forth in this Agreement;
(c) any damage or loss caused by negligence, fraud, dishonesty or willful misconduct by Merchant or any of its employees, agents or customers; (d) the reliability, accuracy, or legitimacy of payment data submitted by Merchant;
(e) any alleged infringement of another party's intellectual property rights by Merchant;
(f) a failure of Merchant to maintain the confidentiality of Cardholder or check writer information;
(g) any action Servicers take against the Account under this Agreement. Merchant will also indemnify and hold harmless the institution at which Merchant maintains the Account for acting in accordance with any instruction from Servicers regarding the Account; or
(h) any Chargebacks or fees, fines or penalties assessed by a Card Association with respect to transactions submitted by Merchant to Servicers.
If Merchant is an agency or instrumentality of a state of the United States and is precluded by the law of Merchant's state from entering into indemnification obligations, then the obligations under this Section shall apply only to the extent permitted by such state law. This section will survive termination of this Agreement.
1.21 Confidential Information.
(a) Servicers may disclose information relating to Merchant's sales to financial institutions, Card Associations and third parties that need the information for a purpose relating to this Agreement and to the Servicers’ agent or referral source, if any that played a role in establishing Merchant's relationship with Servicers solely for the purpose of computing payment due to such persons. Servicers may also disclose information regarding Merchant as part of an investigation by Servicers into Merchant's compliance with its obligations under this Agreement if Servicers determine there is cause to make such an inquiry, or to the extent required or requested by a court or governmental authority, or otherwise as required by law.
(b) Except to the extent specifically permitted by the Rules, the operating rules of NACHA or this Agreement, Merchant shall not disclose any information relating to any Card transaction , or any Cardholder or check writer, to any person or entity other than Servicers, Servicers' employees, agents and independent contractors, and those of Merchant's employees who have a specific need to know such information except to complete the Card transaction or as otherwise required or authorized under this Agreement or by law. Merchant shall treat all documents provided by Servicers relating to this Agreement as confidential and proprietary and protect them with the same degree of care as Merchant would protect its own confidential and proprietary information, and not less than reasonable care.
(c) Merchant agrees that this Agreement, and all other user information provided by Servicers, the process utilized by Servicers for providing services, and all written communications concerning services hereunder are confidential and proprietary information of Servicers. Merchant agrees that neither it nor any of its employees, agents, representatives, or independent contractors will disclose any such confidential, proprietary information to any person or entity that is not a party to this Agreement without the express written consent of Servicers.
1.22 Safeguarding of Information.
(a) Merchant and its agents shall be in full compliance with Rules adopted by any Card Association relating to the privacy and security of Cardholder and Card transaction data, including without limitation the Payment Application Data Security Standard ("PA DSS") and the Payment Card Industry Data Security Standard ("PCI DSS"), as they may be amended from time to time. Information pertaining to such requirements may be found at https://www.pcisecuritystandards.org. PCI DSS and other industry aligned validation requirements collectively form the basis for each of the following Card Association compliance programs, with which Merchant must also comply: (i) the Cardholder Information Security Program ("CISP") - VISA’s data security program; (ii) the Site Data Protection ("SDP") - MasterCard’s data security program; (iii) AXP’s Data Security Operating Policy ("DSOP"); and (iv) the Discover Network Information Security and Compliance ("DISC") - Discover Network’s data security program. Additionally, Merchant shall be responsible for demonstrating compliance by its agents for these programs.
(b) Merchant shall be liable for all fines, charges and penalties that may be assessed by any Card Association as a result of transactions made by Merchant or Merchant's noncompliance with the preceding requirements. Merchant also acknowledges that it may be prohibited from participating in Card Association programs if it is determined that Merchant is non-compliant. Merchant acknowledges that it may be subject to, and Servicers retain the right, to conduct or cause to be conducted an audit to verify Merchant's compliance with the foregoing security requirements. Merchant must notify Servicers within twenty-four (24) hours after becoming aware of (i) any suspected or actual data security breach or (ii) any noncompliance by Merchant with the security requirements set forth herein. In such event, if requested by Servicers or Card Association, Merchant shall, at its own expense, (a) perform or cause to be performed an independent investigation of any data security breach of Card or Card transaction data by an authorized assessor acceptable to Servicers, (b) take all such remedial actions recommended by such investigation, by Servicers or by VISA, MasterCard, AXP or Discover, and (c) cooperate with Servicers in the investigation and resolution of any security breach.
(c) Merchant will not, under any circumstances, disclose any Cardholder's account number nor any information relating to any Cardholder's account number or any Sales Drafts or Credit Vouchers which may have been imprinted with any Card to any person other than Servicers, or as required by law. Merchant agrees not to store, distribute, copy or otherwise manipulate card account numbers or PINs that appear, are encoded or are otherwise associated with Cards. All electronic commerce Merchants must provide Cardholders with a secure transaction method, such as Secure Sockets Layer (SSL) or 3-D Secure. Further, Merchant agrees to store (to the extent such storage is permitted) any and all material containing Cardholder account numbers, imprints or information in a secure manner, in an area limited to selected personnel, and to destroy such numbers, imprints, and information before discarding in a fashion that renders the data unreadable and unrecoverable . Neither Merchant nor any of its agents shall retain or store the full contents of any track on the Magnetic-Stripe, or equivalent data on the Contactless Payment chip, subsequent to Authorization of a Card transaction.
(d) Merchant must notify Servicers of any third party agent of Merchant that will have any access to Cardholder data.
(e) Merchant understands and agrees that due to requirements of law, Card receipts may not contain (i) more than the last five digits of the credit card account number; and (ii) that the Card receipt may not contain the expiration date.
(g) Merchant must fully cooperate with Servicers and Card Associations if Merchant is undergoing a forensic investigation at any time with regard to the Account
1.23 Account Access Password.
(a) If Merchant receives a user identification name or password from Servicers to access Servicers' database or use services offered by Servicers, Merchant will: (i) keep the user identification name and password confidential; (ii) not allow any other entity or person to use the user identification name or password or gain access to Servicers' database; (iii) be liable for all action taken by any user of the user identification name or password; and (iv) promptly notify Servicers if Merchant believes the user identification name or password have been used inappropriately or the confidentiality of the information made available through their use has been compromised.
(b) Merchant agrees that any loss incurred as a result of any party gaining access to Account or Servicers' website using information which that party was not authorized to obtain or using such information in a manner not permitted by this Agreement (including but not limited to improper or unauthorized use of Merchant's ID number and PIN) shall be the responsibility of Merchant. 1.24 Privacy. Servicers will have access to the data associated with Merchant’s use of the service. Servicers will handle this information in accordance with their privacy policies.
Servicers may provide Merchant with a mechanism to provide feedback, suggestions and ideas about Servicers products and services ("Feedback"). Merchant agrees that Servicers may, in their sole discretion, use the Feedback in any way, including in future modifications of the products and services and any related advertising and promotional materials. Merchant grants Servicers a perpetual, worldwide, fully transferable, non-revocable, royalty free license to use, reproduce, modify, create derivative works from, perform, distribute and display for any purpose any information Merchant provides to Servicers in the Feedback. Merchant will have no obligation to provide any Feedback to Servicers.
1.26 Modifications to Agreement.
Servicers may from time-to-time amend any provision of this Agreement, including those relating discount rates or other fees and charges payable by Merchant, whether such amounts are set forth in the Merchant Application, any separate schedule of fees or the fee provisions of this Agreement. Servicers will provide notice to Merchant of the amendment, and unless specified otherwise, the amended agreement shall become effective at the start of the first billing cycle after Servicers have provided notice. Amendments due to changes in a Card Association's fees, interchange, assessments, Rules, gift card systems or any law or judicial decision will become effective at such time that Servicers may specify, which may be sooner than the beginning of the next billing cycle following the date of notice.
1.27 Additional Services Offered by Servicers.
From time to time, Servicers may offer to Merchant additional products and services which may or may not be related to the processing of Card transactions. In the event of such offers, Merchant shall indicate its desire to Servicers to decline such offers or be deemed to have accepted the offers and be liable for payment therefore.
1.28 Compliance with Law.
Merchant shall comply with all laws applicable to Merchant, Merchant's business and any Card transactions, including without limitation to all Rules, state and federal consumer credit and consumer protection laws, as well as laws for any special services used by Merchant, such as gift card and other services.
1.29 Merchant Dispute Notification.
Merchant is responsible for the timely reconciliation of all issues related to services provided under this Agreement. Merchant will promptly examine all merchant statements relating to the Account and immediately notify Servicers in writing of any errors. Merchant’s written notice must include: (i) Merchant name and Account number, (ii) the dollar amount of the asserted error, (iii) a description of the asserted error, and an explanation of why Merchant believes an error exists and the cause of it, if known. That written notice must be received by Servicers within thirty (30) days after Merchant received the periodic statement containing the asserted error. Merchant may not make any claim against Servicers for any loss or expense relating to any asserted error for sixty (60) days immediately following receipt of Merchant’s written notice. During that sixty (60) day period, Servicers will be entitled to investigate the asserted error and Merchant will not incur any cost or expense in connection with the asserted error without notifying Servicers.
1.30 Notices; Consent to Electronic Communications; Telephone Monitoring; Online Statements.
(a) By applying for services and confirming that it has read this Agreement, Merchant is confirming to Servicers that it has the means to access the Internet through its own service provider and download or print electronic communications. Merchant agrees to the receipt of electronic communications by email or by the posting of such information by Servicers at one or more of Servicers' sponsored Merchant Portal.. Such communications may pertain to the services delivered by Servicers, the use of information Merchant may submit to Servicers, changes in laws or Rules impacting the service or other reasons, such as amendment of this Agreement. In addition, all notices and other communications required or permitted under this Agreement by Servicers to Merchant may also be delivered by Servicers to Merchant either by FAX, overnight carrier or first class mail, postage or other charges prepaid, addressed and transmitted as set forth below. All notices and other communications required or permitted under this Agreement by Merchant to Servicers shall be delivered by Merchant to Servicers by overnight carrier or certified mail, postage or other charges prepaid, addressed and transmitted as set forth below. Notice by FAX or e-mail shall be deemed delivered when transmitted. Notice by mail or overnight carrier shall be deemed delivered on the first (1st) business day after mailing or delivery to the carrier. Following are the addresses for the purposes of notices and other communications hereunder, which may be changed by written notice in accordance with this section:
i. If to Servicers, addressed and transmitted as follows: Agent, 250 Stephenson Highway Troy, Michigan Attn: Customer Support
ii. If to Merchant, at the address provided as the billing address, or the FAX number or e-mail address and to the contact listed on the Merchant Application
(b) From time to time the Servicers and/or their agents may monitor and record telephone calls regarding Merchant’s account to assure the quality of their service(s) and for other evidentiary reasons. Merchant agrees, in order for Servicers and/or their agents to service the account or to collect any amounts Merchant may owe, that Servicers and/or their agents may from time to time make calls and/or send e-mails and/or text messages to the Merchant, using prerecorded/artificial voice messages and/or through the use of an automatic dialing device, at any telephone number associated with Merchant’s account, including wireless telephone numbers that could result in charges to Merchant, or at any email address Merchant provide to Servicers and/or their agents.
(c) If Merchant elects to receive monthly statements by accessing them online (an "E-statement"), Merchant will need to visit and register at the Merchant Portal, Agent’s secure website, to obtain a user ID and password. Merchant will be required to provide their merchant ID and other additional information to verify their identification. After completing the registration process, Merchant will be able to access their E-statement(s) by visiting the Merchant Portal and logging in with their user ID and password, which user ID and password can be reset at any time by Merchant. Merchant will typically have access to the E-statement by the second week of the following month. Merchant acknowledges and agrees that if they elect to receive E-Statements, they will not receive a monthly paper account statement by mail. However, Merchant is entitled to also receive a paper copy of monthly statements through the U.S. mail by visiting the Merchant Portal, and following the opt-out procedures provided through that link, or by contacting their agent or the customer service number provided on their statements and in the welcome letter; provided, however, exercising the option to opt out does not constitute a withdrawal of consent to receive monthly E-state