ASF Sub-Merchant Agreement
Last modified: Tuesday November 9th, 2021
This ASF SUB-MERCHANT AGREEMENT (“Agreement”) is made between American Service Finance, LLC d/b/a ASF Payment Solutions (“Company”), having its principal office at 9127 S Jamaica St, Suite 200, Englewood, CO, who is entering into this Agreement on behalf of, and as agent of WORLDPAY, LLC, having its principal office at 8500 Governors Hill Drive, Symmes Township, OH 45249–1384 ( “Processor”) and Customer (“Sub–merchant”), as defined in the Terms of Service between Company and Sub-Merchant. Company may update this Agreement from time to time and Sub-Merchant will have 30 days to reject the updated terms by providing written notice to Company. If Sub-Merchant continues to use or receive the Services (as defined below) following such period, the updated Agreement will be deemed accepted.
Company will provide Sub–merchant with certain payment processing services (“Services”) in accordance with the terms of this Agreement. In consideration of Sub–merchant’s receipt of credit or debit card funded payments, and participation in programs affiliated with Mastercard International Inc. (“Mastercard“), VISA U.S.A. Inc. (“VISA“), Discover (“Discover”), American Express (“American Express”) and certain similar entities (collectively, “Associations”), Sub–merchant is required to comply with the Operating Regulations (defined below) as they pertain to applicable credit and debit card payments. In addition, if Sub–merchant meets certain requirements under the Operating Regulations or an Association or the Operating Regulations otherwise require, Sub–merchant may be required to enter into a direct relationship with Processor (see “Conversion of Graduated Merchants” section below).
NOW, THEREFORE, in consideration of the foregoing recitals and of the mutual promises contained herein, the parties agree as follows:
1. Certain Sub–merchant Responsibilities. Sub-merchant agrees to comply, and to cause third parties acting as Sub–merchant’s agent (“Agents”) to comply, with the Association’s and other payment network’s by–laws, operating regulations and/or all other rules, policies and procedures, which are incorporated herein by reference, including but not limited to the, the VISA Cardholder Information Security Program, the Mastercard Site Data Protection Program, the American Express Merchant Operating Guide, and any other program or requirement that may be published and/or mandated by the Associations or payment networks (as may be amended from time to time, collectively “Operating Regulations“), including those requirements regarding ownership and use of Association marks. Sub-merchant may review the VISA, Mastercard, American Express, and Discover websites for a copy of the Visa, Mastercard, American Express and Discover regulations. The websites are: https://usa.visa.com/support/small–business/regulations–fees.html and http://www.mastercard.com/us/merchant/ and http://www.discovernetwork.com/merchants/ and https://icm.aexp-static.com/content/dam/gms/en_us/optblue/us-mog.pdf. In the event of any conflict between this Agreement and the Operation Regulations, the Operating Regulations shall control. Sub-merchant also agrees to comply with all applicable state, federal, and local laws, rules, and regulations (“Laws”). Without limiting the foregoing, Sub–merchant agrees that it will fully comply with any and all anti–money laundering laws and regulations, including but not limited to the USA PATRIOT Act, the Bank Secrecy Act, the Federal Trade Commission and obligations imposed by the US Treasury’s Office of Foreign Assets Control (OFAC). For purposes of this section, Agents include, but are not limited to, Sub–merchant’s software providers and/or equipment providers.
Sub-merchant acknowledges and agrees that it is responsible for the actions of its employees and Agents. Sub-merchant must notify Company of any third party that has access to cardholder data. Sub-merchant and its Agents and suppliers shall comply with the provisions of the Cardholder Information Security Program (CISP) and Payment Card Industry Data Security Standard (PCI DSS), or other security program as required by an Association, and must have the ability to demonstrate compliance with any such provisions upon request. Sub-merchant hereby acknowledges and agrees that Company will collect and disclose transaction data, Sub-merchant data, and other information about the Sub-merchant to Processor and the Associations. Sub-merchant hereby grants Company, each Association and Processor the right to audit or direct the audit of Sub-merchant’s compliance with this Agreement at any time. Sub-Merchant hereby authorizes Company to research its background, including, but not limited to, credit background checks, banking relationships and its financial history.
If appropriately indicated in Sub–merchant’s agreement with Company, Sub–merchant may be a limited–acceptance merchant, which means that Sub–merchant has elected to accept only certain Visa and Mastercard card types (i.e., consumer credit, consumer debit, and commercial cards) and Sub-merchant must display appropriate signage to indicate the same. Processor has no obligation other than those expressly provided under the Operating Regulations and applicable law as they may relate to limited acceptance. Sub–merchant, and not Processor, will be solely responsible for the implementation of its decision for limited acceptance, including but not limited to policing the card type(s) accepted at the point of sale.
Sub–merchant shall only complete sales transactions produced as the direct result of bona fide sales made by Sub–merchant to cardholders, and is expressly prohibited from presenting sales transactions which are produced as a result of sales made by any person or entity other than Sub–merchant, or for any purposes related to any illegal or prohibited activity, including but not limited to money–laundering or financing of terrorist activities. Sub-merchant is not prohibited from using terminal processing services offered by competitors to deliver Visa transactions captured at the point-of-transaction directly to VisaNet for clearing and settlement.
Sub–merchant may set a minimum transaction amount to accept a card that provides access to a credit account, under the following conditions: i) the minimum transaction amount does not differentiate between card issuers; ii) the minimum transaction amount does not differentiate between Mastercard, Visa, or any other acceptance brand; and iii) the minimum transaction amount does not exceed ten dollars (or any higher amount established by the Federal Reserve). Sub–merchant may set a maximum transaction amount to accept a card that provides access to a credit account, under the following conditions: Sub–merchant is a i) department, agency or instrumentality of the U.S. government; ii) corporation owned or controlled by the U.S. government; or iii) Sub–merchant whose primary business is reflected by one of the following MCCs: 8220 – Colleges, Universities, Professional Schools, Junior Colleges, 8244 – Schools, Business and Secretarial, and 8249 – Schools, Trade or Vocational; and the maximum transaction amount does not differentiate between (i) issuers, and (ii) Mastercard, Visa, or any other acceptance brand.
2. Sub–merchant Prohibitions. Sub-merchants must not engage in any transaction processing in violation of the Operating Regulations. Sub-merchant must not: i) require a cardholder to complete a postcard or similar device that includes the cardholder’s account number, card expiration date, signature, or any other card account data in plain view when mailed ; ii) add any tax to transactions, unless applicable law expressly requires that a Sub–merchant impose a tax (any tax amount, if allowed, must be included in the transaction amount and not collected separately); iii) request or use an account number for any purpose other than as payment for its goods or services; iv) disburse funds in the form of travelers checks if the sole purpose is to allow the cardholder to make a cash purchase of goods or services from Sub–merchant; v) disburse funds in the form of cash unless (a) Sub–merchant is dispensing funds in the form of travelers checks, TravelMoney cards, or foreign currency (in such case, the transaction amount is limited to the value of the travelers checks, TravelMoney cards, or foreign currency, plus any commission or fee charged by the Sub–merchant) and (b) Sub-merchant is participating in full compliance with a program supported by an Association for such cash disbursements; vi) submit any transaction receipt for a transaction that was previously charged back to the Processor and subsequently returned to Sub–merchant, irrespective of cardholder approval; vii) accept a card issued by a U.S. issuer to collect or refinance an existing debt, unless expressly authorized by, and in compliance with, the Operating Regulations; viii) accept a card to collect or refinance an existing debt that has been deemed uncollectable by the Sub-merchant providing the associated goods or services; ix) submit a transaction that represents collection of a dishonored check; x) submit a transaction Sub-merchant knows, or should have known is illegal, fraudulent or not authorized by the cardholder; xi) request a Card Verification Value 2 (“CVV2”) for a card-present transaction, nor retain or store any portion of the magnetic-stripe data subsequent to the authorization of a sales transaction, nor any other data prohibited by the Operating Regulations and/or the Payment Facilitator Agreement between Processor and Company, including CVV2; xii) add a surcharge to transactions, except as expressly permitted by, and in full compliance with, the Operating Regulations; xiii) submit a transaction that does not result from an act between the cardholder and the Sub-Merchant; xiv) submit a transaction that represents collection of a previous Card charge; or xv) disclose a cardholder’s account or transaction information to third parties. Sub–merchant further agrees that, under no circumstance, will Sub-merchant store cardholder data in violation of the Laws or the Operating Regulations including but not limited to the storage of track-2 data. Neither Sub–merchant nor its Agent shall retain or store magnetic–stripe data subsequent to the authorization of a sales transaction.
3. Settlement. Upon receipt of Sub–merchant’s sales data for card transactions from Company, Processor will process Sub–merchant’s sales data to facilitate the funds transfer between the various Associations, Company, and Sub–merchant. All such funds transfers must comply with transaction deposit restrictions, as specified in the Operating Regulations. After Company receives credit for such sales data, subject to the terms set forth herein, Company will fund Sub–merchant, either directly to the Sub–merchant–Owned Designated Account or through Company to an account designated by Company (“Company Designated Account”), at Company’s discretion, for such card transactions. Sub–merchant agrees that the deposit of funds to the Company Designated Account shall discharge Processor of its settlement obligation to Sub–merchant, and that any dispute regarding the receipt or amount of settlement shall be between Company and Sub–merchant. Processor will debit the Company Designated Account for funds owed to Processor as a result of the Services provided hereunder, provided that Company may also debit Sub–merchant’s designated demand deposit account (“Sub–merchant–Owned Designated Account”) upon receipt of such account information from Sub–merchant or Company, or if Processor deposits settlement funds into the Sub–merchant–Owned Designated Account. Further, if a cardholder disputes a transaction, if a transaction is charged back for any reason, or if Company reasonably believes a transaction is unauthorized or otherwise unacceptable, the amount of such transaction may be charged back and debited from Sub–merchant or Company.
4. Term and Termination. This Agreement shall be binding upon Sub–merchant upon Sub-merchant’s execution of an Order Form which references this Agreement. The Order Form will include all card acceptance-related fees, such as discount rates or other pricing methodology, associated with each service category the Sub-merchant elects. The term of this Agreement shall begin, and the terms of the Agreement shall be deemed accepted and binding upon Company, on the date Company and Processor accept this Agreement by issuing a merchant identification number
Notwithstanding the foregoing, Processor or Company may immediately cease providing Services and/or terminate this Agreement immediately without notice if (i) Sub-merchant fails to pay any amount to Processor or Company when due, (ii) in Processor’s or Company’s opinion, provision of a service to Sub–merchant may be a violation of the Operating Regulations or any Laws, (iii) Processor or Company believes that Sub–merchant has violated or is likely to violate the Operating Regulations or the Laws, (iv) Processor or Company determines Sub–merchant poses a financial or regulatory risk to Company, Processor, Member Bank, or an Association, (v) Processor’s agreement with Company terminates, (vi) any Association de–registers Company, (vii) Processor ceases to be a member of the Associations or fails to have the required licenses, (viii) Processor or Company is required to do so by Member Bank or any of the Associations, or (ix) for cause or fraudulent or other activity. Association has the right to limit or terminate its agreement with Sub-Merchant at any time.
5. Limits of Liability. Sub–merchant agrees to provide Processor and/or Company, via a communication with Company, with written notice of any alleged breach by Processor and/or Company of this Agreement, which notice will specifically detail such alleged breach, within thirty (30) days of the date on which the alleged breach first occurred. Failure to so provide notice shall be deemed an acceptance by Sub–merchant and a waiver of any and all rights to dispute such breach.
EXCEPT FOR THOSE EXPRESS WARRANTIES MADE IN THIS AGREEMENT, PROCESSOR AND COMPANY EACH DISCLAIM ALL WARRANTIES, INCLUDING, WITHOUT LIMITATION, ANY EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. Sub–merchant’s sole and exclusive remedy for any and all claims against Processor or Company arising out of or in any way related to the transactions contemplated herein shall be termination of this Agreement. In no event shall Processor or Company have any liability to Sub– merchant with respect to this Agreement or the Services. If Company is unable to provide its services to Sub–merchant in connection with this Agreement and Processor elects to provide those services directly, Sub-merchant acknowledges and agrees that the provisions of this Agreement will no longer apply and the terms of Processor’s then–current Bank Card Merchant Agreement, which would be provided to Sub–merchant upon request, will govern Processor’s relationship with Sub–merchant. If Company subsequently provides its services to Sub–merchant in connection with this Agreement, Processor will cease to provide such services after receipt of notice from Company and this Agreement will govern Processor’s relationship with Sub–merchant.
6.American Express Terms. Capitalized terms used in this Section 6 not otherwise defined in this Agreement shall have the meanings ascribed to such terms in the American Express Merchant Operating Guide. Sub-merchant hereby authorizes Company to act as the payment facilitator to submit transactions to, and receive settlement from, each Association through Processor on behalf of Sub-merchant. Sub-merchant hereby acknowledges and agrees that Company will (i) collect and disclose Transaction Data, Sub-merchant Data, and other information about the Sub-merchant to American Express; and (ii) the Associations will use such information to perform its responsibilities in connection with the Program, promote the American Express Network, perform analytics and create reports, and for any other lawful business purpose, including commercial marketing communication purposes within the parameters of the Program Agreement, and important transactional or relationship communications from American Express. Sub-merchant may opt-out of receiving future commercial marketing communications from American Express by contacting Company or American Express. Notwithstanding the foregoing, you may continue to receive marketing communications while American Express updates its records to reflect your choice. Opting out of commercial marketing communications will not preclude you from receiving important transactional or relationship messages from American Express. American Express may use the information obtained in the Sub-merchant application at the time of setup to screen, communicate, and/or monitor Sub-merchant’ in connection with American Express card marketing and administrative purposes. Sub-merchant shall not assign to any third party any payments due to it under their respective agreement with Company, and all indebtedness arising from charges will be for bone fide sales of goods and services (or both) at its establishments and free of liens, claims, and encumbrances other than ordinary sales taxes; provided, however, that the Sub-merchant may sell and assign future transaction receivables to Company, its affiliated entities and/or any other cash advance funding source that partners with Company or its affiliated entities, without consent of American Express. For purposes of this Agreement, American Express shall be considered a third-party beneficiary to this Agreement entitled to all the rights and benefits, but not the obligations, accruing to American Express herein as if American Express were a direct party to this Agreement, with the ability to enforce the terms hereof against Sub-merchant. Sub-merchant may opt out of accepting American Express cards at any time without directly or indirectly affecting its rights to accept Other Payment Products. Sub-merchant acknowledges and agrees that Company has the right to immediately terminate a Sub-merchant for cause or fraudulent or other activity, or upon American Express’ request. Sub-merchant is required to maintain refund policies for purchases on the Card that are at least as favorable as its refund policy or purchase on any Other Payment Products, and the refund policy must be disclosed by Sub-merchant to Cardmembers at the time of purchase and in compliance with Applicable Law. Sub-merchant is prohibited from billing or collecting from any Cardholder for any purchase or payment on the Card unless Chargeback has been exercised, the Sub-merchant has fully paid for such Charge, and Sub-merchant otherwise has the right to do so. Upon termination this Agreement or Sub-merchant’s participation in the Program, Sub-merchant must cease all use of, and remove American Express Licensed Marks from the Sub-merchant’s website and wherever else they are displayed. Sub-merchant must ensure that that the Transaction Data and customer information is processed promptly, accurately and completely, and Sub-merchant must comply with the American Express Technical Specifications. Sub-merchants are responsible for being aware of and adhering to privacy and data protection laws and for providing specific and adequate disclosures to Cardmembers of collection, use, and processing of personal data. Sub-merchant must comply with the American Express Data Security Requirements (DSR) (https://icm.aexp-static.com/content/dam/gms/en_us/optblue/us-dsr.pdf). Sub-merchant must report all instances of a Data Incident immediately to the payment facilitator after discovery of the incident. Additionally, Sub-merchant acknowledges that it may be converted from the Program to a direct Card acceptance relationship with American Express if and when it becomes a High CV Merchant in accordance with Section 10.5 “High CV Merchant Conversions” of the American Express Operation Regulations, and upon such conversion, (i) Sub-merchant will be bound by American Express’s then-current Card Acceptance Agreement; and (ii) American Express will set pricing and other fees payable by Sub-merchant for Card acceptance.
7. Conversion of Graduated Merchants. In the event that more than $1,000,000 in Visa transactions and/or $1,000,000 in MasterCard transactions (or such other amount provided by the Operating Regulations) (the “Threshold Amount”) is processed through and on behalf of Sub-merchant in any 12-month period, Sub-merchant will automatically be deemed to have accepted, and will be bound by, the “Merchant Services Agreement for Sub-Merchants” with Processor which is set forth here (https://www.asfpaymentsolutions.com/merchant-services-agreement-for-sub-merchants-us/) the terms of which will be independently enforceable by Processor.
8. Miscellaneous. This Agreement is entered into, governed by, and construed pursuant to the laws of the State of Colorado without regard to conflicts of law provisions. This Agreement may not be assigned by Sub–merchant without the prior written consent of Company. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors, transferees and assignees. Except as otherwise provided herein, this Agreement is for the benefit of, and may be enforced only by, Company and Processor and Sub–merchant and is not for the benefit of, and may not be enforced by, any other party. Sub–merchant shall not disclose any Company or Processor confidential information to any person or entity (other than to those employees or agents of Sub–merchant who participate directly in the performance of this Agreement and need access to such information, or in response to a valid subpoena, court order, or Association requirement.) If any provision of this Agreement is determined to be illegal or invalid, such illegality or invalidity of that provision will not affect any of the remaining provisions and this Agreement will be construed as if such provision is not contained in the Agreement. “Member Bank” as used in this Agreement shall mean a member of VISA, Mastercard, American Express, and/or Discover, as applicable, that provides sponsorship services in connection with this Agreement. As of the commencement of this Agreement, Member Bank shall be Fifth Third Bank, N. A., located in Cincinnati, OH, 45263. The Member Bank is a party to this Agreement. The Member Bank may be changed, and its rights and obligations assigned to another party by Processor at any time without notice to Sub-merchant.