CAKE Payments Terms & Conditions
Last Updated: December 4, 2017
These Terms and Conditions are applicable to merchant users of Cake Corporation (formerly Leapset, Inc.) (“Cake”) payment facilitator services for the acceptance of card payments. If you are not using Cake’s payment facilitator services (e.g., exclusively using third party payment processor services) then these Terms and Conditions are not applicable to you.
The Terms and Conditions described here (together with the portion of your Cake account application applicable to Cake’s payment facilitator services, the “Payfac Agreement”, as amended) make a legal agreement between your restaurant business listed in the account application (the “Operator”, “Merchant,” or “you,”) and Cake. The Payfac Agreement governs the use by Operator of the payment facilitator services provided to Operator by Cake, directly or indirectly, and as described herein (the “Cake Payments”). To use Cake Payments, you must agree to all terms of this Payfac Agreement.
This Payfac Agreement has five parts. Part A (Services Description) describes the Cake Payments service and fees. Part B (Application and Account) describes the application (i.e., registration) process and operation of your Cake payments account. Part C (Card Transactions and Funds) and Part D (Other Operator Obligations) describes certain responsibilities Operator assumes in order to receive Cake Payments. Part E (Other Legal Terms) contains additional legal terms, including provisions that require arbitration for any legal dispute and limit the liability of Cake and its affiliates and business partners to you.
In addition to the foregoing, this Payment Agreement includes three exhibits. Exhibit A sets forth a Merchant Services Agreement directly between you and Cake’s Bank Partners that in some cases Visa or MasterCard requires of you. Please see Part A, Section 1 below for more information as to the applicability of this Merchant Services Agreement to you. Exhibit B sets forth the American Express Card Acceptance and Brand Requirements required by American Express. Exhibit C sets forth the Bank Rules that Cake’s Bank Partners (defined below) require all Operators to comply with as a condition for use of Cake Payments. Bank Rules may be amended from time to time by Cake’s Bank Partners.
A. SERVICES DESCRIPTION
1. Role of Cake.
Cake Payments is a service that helps Operators receive card payments from the end-users that pay them (“Buyers”). Cake Payments now or in the future may be offered in connection with traditional card present point of sale and/or online (e.g., e-commerce) card transactions. Neither Cake, nor any bank, is a party to these transactions.
Cake is not a bank or money services business and does not sell banking or money services business services (as defined by the U.S Department of Treasury). Cake collects and analyzes information generated in connection with payments between you as Operator and your Buyers and relays such information to its Bank Partners (defined below) in order for the Bank Partners to facilitate payments through MasterCard International Inc. (“MasterCard”), VISA U.S.A. Inc. (“VISA”), Discover, American Express Travel Related Services Company Inc. (“American Express”), or other payment card networks, association, or companies (the “Card Networks”). In order to act in this capacity, Cake is required to enter into legal contracts with processor(s) (such as Vantiv LLC), acquiring bank(s) (such as Fifth Third Bank, an Ohio banking corporation) (collectively, “Bank Partners”) and Card Networks. Operator is not a third-party beneficiary of these contracts. Each of the Card Networks is a third-party beneficiary of this Payfac Agreement and has beneficiary rights, but not obligations, and may enforce this Payfac Agreement against you.
The Bank Partners – not Cake – actually conduct the settlement of card transactions and ACH transactions (if applicable) to Operators. Cake does not at any point hold, own or control funds in connection with Cake Payments, nor does Cake transmit money or monetary value. In connection with the Cake Payments, Cake does not actually receive, take possession of or hold any money or monetary value for transmission, and does not advertise, solicit or hold itself out as receiving money for transmission. The Bank Partner(s) is the party with sole responsibility for conducting the settlement of funds between Buyers and Operators.
Without limiting the foregoing paragraph, Buyer’s transfer of transaction proceeds as initiated through Cake Payments satisfies Buyer’s purchase obligations to Operator (who is the payee in Buyer transactions) in full regardless of when or if Operator ultimately receives funds from the Bank Partners. The Bank Partners are obligated to pay Operators under both (a) the provisions of its applicable agreement with Cake, and (b) the Card Network Rules (defined below) that make the Bank Partners responsible for settling with you. In all cases you as Operator remain solely responsible for the delivery of goods and services purchased by Buyers and, for the avoidance of doubt, product defects or violations or flaws applying to such goods and services.
From time to time, the Card Networks may require that Operator enter into a contract directly with Bank Partners, either during the merchant account application process or thereafter, and further delivery of Cake Payments may be conditioned on entering into that contract. Specifically, to the extent required by the Card Networks, Operator agrees to the “Merchant Services Agreement” by and between Operator and the Bank Partners as set forth in Exhibit A in the event that Operator’s Visa or MasterCard transaction volume (in dollar amount) exceeds, or is anticipated to exceed, certain limits (set by Visa and MasterCard from time to time) during any 12 month period or in other circumstances where Visa or MasterCard require it. By agreeing to this Payfac Agreement (by “click through” or otherwise), you also agree to the terms and conditions of the Merchant Services Agreement, which constitutes a legal binding contract between you, on the one hand, and VANTIV, LLC and its designated Member Bank, on the other hand. American Express may require a direct relationship in analogous circumstances. If you fail to agree to such agreement as required by the Card Networks and/or our Bank Partners Cake may suspend or terminate the delivery of Cake Payments.
Similarly, if you receive payments from American Express exceeding a certain volume threshold set forth by American Express, you may be converted to a direct card acceptance relationship with American Express and, upon conversion, you will be bound by the then-current American Express Card acceptance agreement.
2. Other Cake Services.
Cake provides a variety of software solutions to the restaurant industry, including but not limited to menu and discovery services, guest management services, point of sale services and hardware, and online ordering (e-commerce) software. Such other services (“Other Cake Services”), even where related to Cake Payments (such as point of sale software and/or hardware or ecommerce services), are formally distinct from the Cake Payments service and governed by separate terms and conditions, including separate pricing and payment terms (“Other Services Fees”), unless explicitly stated in those terms and conditions or this Payfac Agreement.
Operator hereby authorizes (a) Cake to act as Operator’s agent and provide transaction information to the Bank Partners in order for the Bank Partners to facilitate payments from Buyers to Operators through the Card Networks, (b) Bank Partner(s) to hold, receive, disburse, and settle funds on Operator’s behalf in connection with Buyer card transactions and generate a paper draft or electronic funds transfer to process each payment transaction authorized by Operator, (c) Cake to instruct its Bank Partners regarding how card transaction funds or credits for those funds are settled to Operator’s Bank Account (defined below) and the timing of such settlement and (d) Bank Partners to hold card transaction funds in a deposit account owned by Bank Partner(s) until such funds are settled to Operator (less amounts owed and subject to any chargeback or reserve withheld or applied). Any information provided or made available to Operator regarding anticipated amounts received on Operator’s behalf from the Card Networks and pending settlement is a provisional reporting statement, and does not create any ownership or other rights in those funds.
The foregoing authorizations shall remain in full force and effect until the Payments Account is terminated.
Further, Operator hereby authorizes Bank Partners to credit or debit Operator Bank Account by initiating ACH entries (or other electronic means) or by wire transfer for amounts due and to initiate reversal or adjustment (debit or credit) entries to the Bank Account and to initiate or suspend such entries as may be necessary to grant or reverse provisional credit for any transaction. Operator agrees to be bound by the ACH Rules and that all ACH transactions that it initiates will comply with all applicable laws. That authorization will remain in full force and effect until Operator notifies Cake that it revokes it by contacting Cake at email@example.com or by closing the payments account. Operator understands that Cake requires a reasonable time to act on the revocation.
4. Information Security and Audits.
Cake has implemented technical and administrative measures designed to secure the personal information of Operator and its Buyers that is maintained on Cake’s systems from accidental loss and unauthorized access. These measures are not a guarantee against loss or that unauthorized parties will never breach Cake’s systems or use such personal information for improper purposes. Accordingly, the personal information regarding Operator, its agents and its customers is provided at Operator’s risk. If Cake determines that a security event has happened, Cake may require Operator to have a third party auditor (that is approved by Cake) conduct a security audit of its systems and facilities and issue a finding that will be reviewable by Cake, its Bank Partners, and the Card Networks. If you discover a security-related issue, you agree to inform us of the issue immediately by contacting Cake at firstname.lastname@example.org.
Cake and its affiliates may collect or receive personal information about Operator and/or Buyers in connection with Cake Payments. To learn about the information Cake collects from Operator when using the Cake Payments and how such information is used and shared please see the “Confidentiality” Section in Part E.
6. Unauthorized or Illegal Use.
Cake and Bank Partners may not authorize or settle any Buyer transaction which we determine violates this Payfac Agreement or any other Cake agreement or exposes Cake, Cake Payments users, our Bank Partners or Operator to harm (which includes criminal acts). Cake may further disclose information to law enforcement about Operator, its Buyer transactions, or its Cake Payments Account in the event that Cake reasonably suspects that Operator’s Cake Payments Account has been used for any illegal or unauthorized purpose.
7. Payout Logistics.
The Bank Partners will disburse funds (settling from Buyer card transactions submitted by Operator through Cake Payments) to a settlement bank account designated by Operator from time to time (the “Bank Account”) in the amounts actually received from the Card Networks (net of Fees (defined below), set-offs, and other funds owed to Bank Partners or Cake for any reason). The Bank Account must be in the name of the Operator’s business and located at a bank in the United States. Operator is responsible for providing accurate Bank Account information. If the Bank Partners cannot disburse the funds to the Operator’s bank account (due to inaccurate or obsolete bank account information entered by the Operator, or for any other reason), funds may be returned to the Buyer or escheated in accordance with these Terms and Conditions. Neither the Bank Partners, Cake, nor the Buyers will have any liability to Operator for funds so refunded or escheated.
Funds for a particular transaction will be transferred to the Bank Account only after Bank Partners have received and accepted funds settling from the Card Networks, provided, however, that the actual time it takes for Bank Partners to initiate a transfer to Operator’s Bank Account of funds settled from card transactions may vary. Neither Cake nor Bank Partners shall be responsible for any action(s) taken by the financial institution holding Operator’s Bank Account that result in some or all of the funds not being credited to Operator Bank Account or otherwise made available.
The payout of Operator’s funds may be subject to a hold period or otherwise limited or delayed depending on the perceived risk and transaction history of Operator’s Payments Account. Should Cake or its Bank Partners need to conduct an investigation or resolve any pending dispute related to Operator’s Payments Account, the Bank Partners may defer payout or restrict access to Operator funds for the entire time it takes to do so. The Bank Partners or Cake may also defer payout or restrict access to funds as required by law, Card Network Rules or court order, or if otherwise requested by law enforcement or governmental entity.
Notwithstanding the foregoing, Operator acknowledges all credits for funds (in connection with an accelerated funding program or otherwise) provided are provisional and subject to reversal, including without limitation if there are adjustments for inaccuracies and errors (including rejects) and chargebacks, reversals or disputes in accordance with this Payfac Agreement and the Card Network Rules (defined below), whether or not a transaction is charged back by the card issuer or the cardholder.
Further, the payout of Operator’s funds may be subject to a hold period or otherwise limited or delayed depending on the perceived risk and transaction history of Operator’s Payments Account. Should Cake or its Bank Partners need to conduct an investigation or resolve any pending dispute related to Operator’s Payments Account, the Bank Partners may defer payout or restrict access to Operator funds for the entire time it takes to do so. The Bank Partners or Cake may also defer payout or restrict access to funds as required by law, Card Network Rules or court order, or if otherwise requested by law enforcement or governmental entity.
If Cake or the Bank Partners suspect future chargebacks or disputes as a result of transactions to the Payments Account, the Bank Partners may defer payout and/or restrict access to Operator funds until Cake or the Bank Partners reasonably believe, in their sole discretion, that the risk of receiving a chargeback or dispute has passed. All settlements are subject to review for risk and compliance purposes and can be delayed or postponed at Cake’s sole discretion.
8.1. Fees. Operator shall pay to Cake charges (“Fees”) for Cake Payments in the manner described in and pursuant to the account application and/or any other designated fee schedule (each an “Order Form”, as amended from time to time (by reasonable notice to Operator)) and this Payfac Agreement. Fees include all fees set forth in the Order Form(s), including without limitation, interchange, assessment, authorization, processing, settlement, risk, and other fees or amounts charged by Cake or its Bank Partners or passed through (from the Card Networks or other third parties) to Operator by Cake or its Bank Partners. For the avoidance of doubt, Fees may include those related to “exceptions processing” such as payout failures (e.g., ACH returns) and Chargeback handling as well as TIN validation, Form 1099-K rejection or issuance, gateway access, Card Network Rules compliance, accelerated payout or funding, or wire transfers, each as set forth on the Order Form(s). In the event Fees are not described in the applicable Order Form then the Fees the shall be: (a) 2.5% per transaction for swiped, NFC or inserted chip transactions, (b) 3.5% + $0.15 for each manually inputted (or “keyed-in”) transaction, (c) $20 for each Chargeback, (d) $3 for each Payout Failure, (e) $3 for each Notice of Change, (f) $100 for each Form 1099-K rejection, (g) $5 for each Form 1099-K issuance, (h) $25 per month for next day funding (or .25% per settlement for same day funding), and (i) 5% per transaction for online transactions . To the extent the Order Form states a regularly recurring (such as monthly) fee, the fee is applied per Operator location unless the Order Form expressly states to the contrary. Monthly fees are not pro-rated for any partial month and are payable without regard to whether or not Operator actually uses the underlying service during the month. Operator shall also be liable for any penalties or fines imposed on Cake or its Bank Partners or directly on Operator by any Card Network or financial institution as a result of Operator activities. Pricing for Other Cake Services (such as those described in Part A, Section 2) is not bundled with the Fees for Cake Payments unless otherwise expressly stated in the agreement governing those Other Cake Services or herein.
The above fees are first netted against other funds due to Operator or, in the alternative, deducted from the Operator bank account, Reserve (described below) or other payment instrument associated with the Operator account.
All pricing is exclusive of all taxes. Operator shall be responsible for all sales, use, excise, value added, and other taxes and duties however designated that are levied by any taxing authority relating to the activities related to this Payfac Agreement, excluding taxes in respect of Cake’s net income. All undisputed Fees not paid when due (including in the event the funds in the Bank Account are insufficient to cover fees due hereunder) shall bear interest at the rate of 1.5% per month or the maximum legal rate, whichever is lower, until paid in full. Additionally, Operator will be liable for Cake’s costs associated with collection in addition to the amount owed, including without limitation attorneys’ fees and expenses and collection agency fees. In its discretion, Cake may make appropriate reports to credit reporting agencies and law enforcement authorities, and cooperate with them in any resulting investigation or prosecution. Operator hereby expressly agree that all communication in relation to delinquent accounts will be made by electronic mail or by phone, as provided by Operator to Cake. Such communication may be made by Cake or by anyone on its behalf, including but not limited to a third party collection agent.
Operator may increase the prices to include the cost of the fees and shall, in such event, disclose these increases to the buyers as a service fee, subject to the Card Network rules and regulations as in effect from time to time.
8.2. Fees Changes. Pricing is based upon assumptions associated with, among other things, (a) Card Network Rules and interchange fees, applicable laws, rules and regulations, and the commercial terms of Cake’s banking and vendor partnerships as well as (b) Operator’s individual risk and processing profile which includes Operator’s merchant category code, anticipated transaction volume, payment card category (i.e., interchange rate) ratios, and processing methods, as well as Operator’s method of doing business (i.e., the nature and type of business conducted by Operator) and the exclusive nature of the Payfac Agreement (see Part D, Section 5 below (Exclusivity)).
Cake reserves the right to modify, amend or supplement the Fees (individually or generally to similarly situated Operators) at any time (a “Fees Change”), subject to a thirty (30) day notice period to Operator (a “Fee Change Notice”). If Operator continues to use Cake Payments after the end of the notice period then Operator is deemed to have accepted the change in Fees contemplated by such notice. Fee Changes shall become effective upon the date stated in the Fee Change Notice, provided the date shall not be fewer than 30 days after the date of the Fee Change Notice, unless the notice relates to a change arising from a change in the fees or Card Network Rules by the Card Networks or a change in applicable laws, rules, or regulations (collectively, a “Third Party Change”), in which case the Fees Changes shall be effective upon the earlier of the date stated in the Fee Change Notice or upon the date the Third Party Change is or was implemented by the applicable Card Network or governing authority.
In the event of a material Fees Change (but not including a Third Party Change unless required by law or Card Network Rules), Operator shall have the right to terminate the Payfac Agreement and any agreement for Other Cake Services related to the Payfac Agreement, and be released from future payment obligations under the Payfac Agreement or such related agreements except for outstanding fees owed (which include any and all fees owed for equipment purchases (if applicable)), by providing written notice thereof to Cake, provided such notice must be given to Cake within 30 days following the date of the Fee Change Notice, and provided further, no such right to terminate shall apply in the event the modification relates to a Third Party Change.
9. Customer Support.
Cake provides its Operators with customer service to resolve issues relating to card processing and the settlement of funds that arise from use of Cake Payments. Operator is solely responsible for all customer service issues relating to its goods or services, including pricing, order fulfillment, order cancellation, returns, refunds and adjustments, rebates, functionality and warranty, technical support, feedback concerning experiences with Operator personnel, policies or processes, and dispute resolution and issues arising from the processing of Buyers’ cards through Cake Payments, all in accordance with the terms applicable to any transaction. In performing customer service, Operator will always present itself as a separate entity from Cake.
10. Set-off and Collection Rights.
To the extent permitted by applicable law, the Bank may set off any obligation Operator owes Cake under this Payfac Agreement, including processing fees, accelerating funding fees, and exception item fees (such as fees related to chargebacks), against any credit in Operator’s Account or against amounts due to Operator. All Fees shall be first deducted from funds payable to Operator arising from the settlement of card transactions and thereafter such amounts shall be deducted from the Bank Account or Reserve (described below). If the Bank Account does not have sufficient funds, the Bank Partners may collect from any funding source or payment instrument associated with the Payments Account, or from any other account under Operator control, or from any funding source associated with such other account, including but not limited to any funds (a) deposited by Operator, (b) due to Operator under this Payfac Agreement, or (c) available in Bank Account, or other payment instrument registered with the Bank Partners. Failure to pay in full undisputed amounts owed on demand breaches this Payfac Agreement and Operator will be charged with additional fees arising from the collection of delinquency accounts and Chargebacks, including without limitation collection agency fees, attorneys’ fees and expenses, costs of any legal proceeding, and any applicable interest.
Cake may require – as part of the application/registration process or thereafter – a personal guaranty from a principal of a business (who will be personally liable for the Operator’s financial obligations) for amounts due owed under this Payfac Agreement and in such case Operator understands that future delivery of Cake Payments is conditioned upon it delivering such guaranty to Cake. Communication from Cake regarding delinquent accounts, whether made by Cake or by an agent on its behalf (such as a third party collection agent) may be made by electronic communications or phone.
To the fullest extent permitted by applicable law, Operator hereby authorizes Bank Partners to deduct undisputed Other Services Fees arising from Other Cake Services owed by Operator from the payout of funds (settling from Buyer card transactions submitted by Operator through Cake Payments) under this Payfac Agreement. This authorization will remain in effect until Cake receives notice from Operator terminating the authorization or Operator’s payment obligations under this Payfac Agreement terminate (whichever is earlier) and in such manner as to afford Cake a reasonable opportunity to act on it.
At any time and from time to time, the Bank Partners may temporarily suspend or delay payments to Operator and/or designate an amount of funds that the Bank Partners must maintain (“Reserve”) to secure the performance of Operator payment obligations under this Payfac Agreement. A Reserve may be required for any reason, including high chargeback risk or indications of performance problems related to Operator use of the Payments Service and to otherwise ensure that Operator can cover chargebacks, returns, reversals, and other obligations under this Payfac Agreement.
The Reserve will be in an amount as reasonably determined by Cake to cover anticipated chargebacks, returns, unshipped merchandise and/or unfulfilled services or credit risk based on your processing history or such amount designated by the processor. The Reserve may be raised, reduced or removed at any time by Banking Partners, in their sole discretion, based on Operator’s payment history, a credit review, the amount of any arbitration award or court judgment against Operator in Cake’s favor, or otherwise as Cake or its Bank Partners may determine or require. If Operator does not have sufficient funds in Operator’s Reserve, the Bank Partners may fund the Reserve from any funding source associated with Operator’s Payments Account, or from any other account under Operator’s control or any funding source associated with such other account, including but not limited to any funds (a) credited to Operator’s Payments Account, (b) due to
Operator under this Payfac Agreement, or (c) available in Operator bank account, or other payment instrument registered with Cake.
To the extent permitted by applicable law Operator grants Cake a security interest in and lien on any and all funds held in any Reserve, and also authorizes Cake to coordinate withdrawals or debits from the Reserve, without prior notice to Operator, to collect amounts that Operator owes Cake under this Payfac Agreement, including without limitation for any reversals of deposits or transfers made to Operator’s Payments Account. Operator will execute any additional documentation required for Cake to perfect its security interest in any funds in the Reserve. This security interest survives for as long as funds are held in Operator’s Reserve; however, it does not apply to any funds for which the grant of a security interest would be prohibited by law. You irrevocably assign to us all rights and legal interests to any interest or other earnings that accrue or are attributable to your Reserve.
12. Dormant Accounts.
If there is no activity in Operator’s Payments Account (such as a payment or disbursement) for the period of time set forth in applicable unclaimed property laws, and there are Operator funds in that account, Cake may notify Operator by U.S. mail or sending an email to the Operator’s registered email address. Cake will give Operator the option of maintaining the Payments Account or requesting a release of funds. If Operator does not respond to the notice within the time period specified in the notice, Cake may close the Payments Account and the Bank Partners will escheat funds (less a processing fee) in accordance with applicable law.
13. Accelerated Funding.
If Operator is eligible for and participates in any accelerated funding program that Cake makes available from time to time, then in connection with such program Bank Partners may credit Operator’s Bank Account for fund amounts clearing from Buyer card transactions. Cake or the Bank Partners may establish required batch times in order for Operator to qualify for accelerated funding programs and recommends that Operator batch transactions at least 15 minutes prior to any stated required batch time. Amendment of the criteria to participate in or rules associated with accelerated funding programs will not constitute an amendment to the Agreement that allows Operator to terminate this Payfac Agreement as contemplated herein. In no event shall Cake or the Bank Partners be liable to Operator for monetary damages associated with failure to meet accelerated funding times. Operator’s eligibility to participate in accelerated funding program may be terminated or suspended by Cake or its Bank Partners for any reason or no reason at any time. For the avoidance of doubt, accelerated funding (i) is not intended to be, nor shall it be construed as, a loan from Cake to Operator and (ii) does not relieve Operator of any of its obligations hereunder, including but not limited to those set forth in Part C, Section 7 (Chargebacks).
B. APPLICATION AND ACCOUNT
Cake Payments may only be used in connection with restaurants doing business in the fifty states of the United States of America and the District of Columbia and for the purpose of accepting card payments for business purposes. To be eligible to use the service, Operators have to apply for a Cake Payments account (“Payments Account”). Now or in the future this Payments Account may be merged with an umbrella Cake account covering products/services other than Cake Payments, such as discovery, online ordering or point of sale software services (see Section 2 of Part A). Operator is responsible for maintaining the secrecy and security of the Cake Payment Account access credentials and for any use of or action taken through account.
When Operator applies for a Payments Account, Cake collects information such as name, the business name, location, email address, tax identification number and phone number. Operator may choose to register as an individual (sole proprietor) or as a company or other business organization. If Operator registers as a company or organization, it must also provide information about an owner or principal of the company, who is authorized to act on behalf of the company and have the authority to bind the company to this Payfac Agreement and Operator agrees to provide supplemental documentation upon request (including but not limited to: articles of incorporation and/or a business license). When agreeing to this Payfac Agreement on behalf of a company or other organization, the term “Operator” will mean the natural person, as well as the business entity.
Operator must provide accurate and complete information. Cake reserves the right to deny Operator access to services or close a Payment Account if such information cannot be verified. Each account must be linked to a verified U.S Bank account.
Please note that American Express may use the information obtained in Operator’s Payments Account application to screen and/or monitor Operator in connection with payment card marketing and administrative purposes.
Operator may not export Cake Payments directly or indirectly, and Operator acknowledges that Cake Payments may be subject to export restrictions imposed by U.S. law, including US Export Administration Regulations (15 C.F.R. Chapter VII).
2. Business Name.
Operator must provide to Cake the name under which it does business when completing the application process. This name may appear on Buyers’ payment card statements. Operator indemnifies Cake from any costs from Buyer disputes based on Operator’s failure to provide an accurate name or business description.
Operator funds will be co-mingled and held by the Bank Partners with other Operators’ funds in one or more pooled accounts that are established in the applicable Bank Partner’s name for the benefit of Operator and other users. The Bank Partners have sole discretion over the establishment and maintenance of any pooled account. Cake has no ownership or control, and no right, title or interest in any account in which Operator funds are held. The Bank Partners will hold any funds associated with Operator’s Payments Account in an account separate from any account used for Cake’s corporate funds. Cake will not and cannot use Operator funds located in such pooled account for Cake’s corporate purposes, will not voluntarily make funds available to its creditors in the event of bankruptcy or for any other purpose, and will not knowingly permit Cake’s creditors to attach the funds. Operator will not receive interest or any other earnings on any funds that the Bank Partner holds for Operator. As consideration for using the Cake Payments service, Operator irrevocably assigns to Cake or the Bank Partners all rights and legal interests to any interest and/or other earnings or benefits that may accrue or are attributable to the Bank Partner holding Operator funds in a pooled account.
If the Payments Account is negative for an extended period of time (as defined by Cake in its sole discretion), the Bank Partner may close Operator’s Payments Account and Cake or Bank Partner may pursue legal action or other collection efforts.
4.1. General. Cake needs to ensure that the persons using a Payments Account are who they say they are and further needs to understand the business risks associated with such persons. Accordingly, Operators are generally required to provide a business EIN or Tax ID, social security number, and date of birth and Cake may ask Operator to provide additional information (such as a driver’s license (or other government issued ID), a business license, or invoices) at any time. By signing up for a Payments Account, Operator authorizes Cake to retrieve additional information about it or its principals from third parties and other identification services, including credit bureaus and other information providers. In some cases Cake may request to inspect Operator’s physical location and/or examine Operator’s financial statements and refusal to comply with such requests may result in refusal or suspension of the Payments Account.
Operator information may be used by Cake (during the registration process or thereafter) to determine whether Operator is eligible to use Cake Payments and/or shared with Bank Partners, each of which may also make a determination regarding eligibility. Eligibility requirements or Operator information may change from time to time and Cake may periodically audit or re-verify Operator information (by performing third party checks or otherwise) against the prevailing eligibility requirements for a Payments Account.
4.2. Sharing Information. Cake may share some or all of the information about Operator’s transactions with its Bank Partners, the Card Networks, and Cake’s other partners (and their respective affiliates, agents, subcontractors, and employees), who may use this information to perform their obligations under their agreements with Cake, to operate and promote their respective networks, to perform analytics and create reports, to prevent fraud, and for any other lawful purpose. American Express and other Card Networks may use Operator’s name, address, and website address (URL) in any media from time to time. At any time, Cake, its Bank Partners or its other partners may conclude that Operator will not be permitted to use Cake Payments.
Operator agrees that Cake is permitted to contact and share information about Operator and its Payments Account with banks and other financial institutions. This includes sharing information (a) about Operator transactions for regulatory or compliance purposes, (b) for use in connection with the management and maintenance of the Cake Payments service, (c) to create and update customer records about Operator and to assist them in better serving Operator, and (d) to conduct Cake’s risk management process.
5. Prohibited Businesses and Activities.
Operator will only accept card payments via Cake Payments in connection with the operation of a restaurant business in the United States. For the avoidance of doubt, Operator agrees not accept payments in connection with the following business activities:
* Age restricted products or services (except for card present Buyer transactions for the purchase of alcohol as permitted by law)
* Delayed delivery services where the good or service the Operator is providing the Buyer is not shipped, delivered or fulfilled on or around when the card transaction is processed but is to occur at a future date
* Personal enhancement products
* Any product, service or activity that is deceptive, unfair, predatory or prohibited by one or more Card Networks
* Sale of products that infringe on the intellectual property rights of others, including counterfeit goods or any product or service that infringes on the copyright, trademark or trade secrets of any third party
* Adult entertainment oriented products or services (in any medium, including internet, telephone, or printed material)
* Buyer or membership clubs, including dues associated with such clubs
* Gambling activities, including lotteries, internet gaming, contests, sweepstakes, or offering of prizes as an inducement to purchase goods or services
* Internet pharmacies
* High-risk products and services, including telemarketing sales
* Cruise lines
* Digital wallet or prepaid sales
* Drug paraphernalia, e-Cigarettes
* Firearms parts or hardware, and ammunition
* Marijuana dispensaries and related products or services
In addition, Operator agrees that it must take all available steps and precautions to prevent fraud, theft, or misappropriation of cardholder data. The Operator is deemed to be responsible for the conduct of its employees, contractors, and representatives. Operator shall be responsible for the security of data (including cardholder data) in Operator’s possession or control. Operator must comply with all applicable laws, operating regulations, and rules in relation to collection, security and dissemination of personal, financial or transaction information. If the Operator handles, transmits or stores any cardholder data, Operator shall ensure compliance with the Payment Card Industry Data Security Standards. Operator shall certify compliance with the foregoing and submit documentation in accordance with the Operating Regulations when requested by Cake.
Operator agrees that the prohibited actions described below are actions which may mislead, disadvantage, defraud or damage any, or all of, the following entities; (a) a cardholding Buyer; (b) the issuing bank; (c) the settlement bank; (d) the Card Networks (e) Bank Partner(s), (f) Cake and will make commercially reasonable efforts to ensure it does not:
* Use any cardholder data or other transaction data received from Cake for any purpose not authorized by this Payfac Agreement.
* Disclose any cardholder data or other transaction data to any entity except for necessary disclosures to affected cardholders, and through Cake to affected Card Networks.
* Knowingly provide to Cake any inaccurate, incomplete, or misleading information.
* Fail to provide Cake with timely notification of events that have caused or could cause material changes in the Operator’s ability to fulfill its obligations under this Payfac Agreement, including but not limited to (a) adverse changes in the Operator’s financial health; (b) adverse changes in the Operator’s business conditions or environment; or (c) actions by governmental or non-governmental agencies.
* Send or receive funds for something that may have resulted from fraud or other illegal behavior.
* Transfer or attempt to transfer its financial liability by asking or requiring cardholders to waive their dispute rights.
* Transfer funds between bank accounts held in the same name.
* Act as a payment intermediary or aggregator or otherwise resell our services on behalf of any third party.
If Cake determines that Operator has received funds resulting from fraud or a prohibited activity, those funds may be frozen, returned to the Buyer, or seized. In addition, if Cake reasonably suspects that Operator’s Payments Account has been used for an unauthorized, illegal, or criminal purpose, Operator gives Cake, Network and Bank Partners express authorization to share information about Operator, the Payments Account, Operator’s access to the Cake Payments services, and any of Operator’s transactions with law enforcement.
C. Card Transactions and Funds
1. Card Acceptance.
When accepting or declining any card presented for payment by Buyers and completing any card transaction, Operator shall follow all procedures and rules in this Payment Agreement, the Card Network Rules (defined below), and any applicable Bank Partner rules (“Bank Rules”) or operating guides provided to Operator from time to time. Operator shall honor all eligible cards when presented in accordance with the Card Network Rules and the Bank Rules for the purchase of goods or services or in processing a request for credit resulting from such a transaction, by an authorized holder of a card. Operator will obtain an authorization from the Card Network(s) for each accepted card transaction, as required under the Card Network Rules, and will not submit a card transaction for settlement where there is a negative authorization or the card is expired.
In addition, Operator will not submit any card transaction:
* That adds any surcharge to the transaction, except to the extent authorized by the Card Network Rules (defined below) or applicable law.
* That adds any tax to the transaction, unless applicable law expressly allows for Operator to impose a tax. Any tax amount, if allowed, must be included in the transaction amount and not collected separately.
* That represents the refinancing or transfer of an existing Buyer obligation that is deemed to be uncollectible or arises from the dishonor of a Buyer’s personal check or from the acceptance of a card at a terminal that dispenses scrip (a form of credit).
* That is not a valid transaction between the Operator and a bona fide Buyer cardholder.
* That Operator knows or should have known to be (i) not authorized by the Buyer, or (ii) authorized by a Buyer colluding with the Operator for a fraudulent purpose.
* Until after the products are shipped or the services are performed, and/or the Operator has completed the transaction, unless the Operator has obtained Buyer consent for a recurring transaction.
* Where a valid authorization was required but not obtained.
* Where multiple authorizations for amounts less than the total sale amount have been obtained.
* Which results in a disbursement of cash or cash equivalent to a Buyer.
* That establishes a maximum dollar sale transaction amount, except to the extent authorized by the Card Network Rules.
2. Card Marks.
Operator will provide a receipt to the Buyer at the conclusion of the purchase transaction that includes all information required under Card Network Rules and applicable law.
Operator will use and display all Card Network marks in compliance with the Card Network Rules and any such use and display rights will terminate effective with the termination of the Payfac Agreement.
3. Transaction Processing.
Unless otherwise agreed to in writing by Cake, Operator shall electronically deliver to Cake and in a format acceptable to Cake all sales transaction records within two (2) business days after the transaction date (or such shorter period as determined by the applicable Card Network), except (a) in the case of a permitted delayed merchandise delivery, when the sales transaction record shall be delivered within two (2) business days of the merchandise delivery or (b) as specified otherwise in Bank Rules. Operator agrees that in ordinary course it shall deliver sales transaction records to Cake at least every business day. The preparation and delivery to Cake of sales transactions shall constitute an endorsement to Cake by Operator of each sales transaction, and Operator authorizes Cake or its representative to place Operator’s endorsement on any sales transaction at any time. The Bank Partners may refuse to authorize any sales transaction that is reasonably likely to result in a Chargeback. The parties acknowledge and agree that neither party is responsible for any action or inaction taken by the financial institution or other entity that issued the card(s) to the Buyers or the processor of such card(s) to the extent the respective party is not the direct cause of such action or inaction.
4. Exception Items.
Operator agrees to reacquire and pay Cake the amount of any sales transaction, and Cake shall have the right at any time to charge Operator with notice in accordance with Cake’s standard operating procedure, for any return, Chargeback, compliance case, any other Card Network action, or if the sales transaction performed was in violation of law or the rules or regulations of any governmental agency, federal, state, local or otherwise; or if Cake has not received payment for any sales transaction, notwithstanding Cake’s prior payment to Operator for such sales transaction. Not limiting the generality of the foregoing, Operator agrees that any operational services performed on behalf of Operator by Cake, including but not limited to, response to compliance cases or transaction stand-in shall in no way affect Operator’s obligations and liability in this Payfac Agreement. Operator may instruct Cake in the defense of Chargebacks, compliance cases and similar actions, and Operator agrees that it will promptly provide any such instructions to Cake. When Cake has determined it has all necessary information and instructions, Operator hereby authorizes Cake to resolve Chargebacks and respond to retrieval requests and other inquiries without further consulting Operator.
5. Refunds and Returns Provided by Operator.
Operator agrees to provide refunds and adjustments for returns of its goods and services through Cake Payments to the Buyer’s card in accordance with the terms of this Payfac Agreement and Card Network Rules. Card Network Rules require that Operator (a) maintain a fair return, cancellation or adjustment policy; (b) disclose its return or cancellation policy to Buyers at the time of purchase, (c) not accept cash or any other item of value for preparing a card sale refund (unless required by law) and (d) not give cash refunds to Buyers for a card sale. Operator agrees to not submit any refund transaction through Cake Payments:
* That does not correlate to an original transaction.
* That exceeds the amount shown as the total on the original transaction (including tax, handling charges, etc.), unless the excess represents the amount equal to the reimbursement to Buyer for postage paid to return merchandise in accordance with a policy applied consistently by the Operator to all its customers.
* For returned products that were acquired in a cash purchase from the Operator (unless required by law); or
* That would cause an overdraft.
Operator refund policies must be the same for all payment methods. Refunds must be submitted within thirty (30) days of the original transaction but in all cases, within three (3) business days following either a regulatory requirement granting a cardholding Buyer’s right to a refund or a non-disputed Buyer request.
In processing a refund to a Buyer’s card the Bank Partners will deduct the refund amount either from the payout of settlement funds owed to Operator or funds in any Reserve. If such funds are not sufficient to satisfy the refund amount, the Bank Partners will initiate an ACH debit entry to the Bank Account in the amount that completes the refund. In the event Bank Partners cannot access Operator’s Bank Account by means of ACH debit entry, Operator shall pay all funds owed upon demand.
For the avoidance of doubt, Operator shall be solely responsible for accepting and coordinating returns of Operator’s goods and services and Cake has no responsibility or obligation with respect to such goods and services or the return logistics of the same.
6. Review of Settlement Activity and Reports; Reconciliation.
Operator agrees that it shall exert diligence to review all material reports, notices, and invoices prepared by Cake or its agent and made available to Operator, including but not limited to reports on sales transaction and settlement history, notices, and invoices provided via the online reporting tools of Cake or its Bank Partners. Operator should make archival copies of its Payments Account data regularly. Except as required by law, Operator is solely responsible for (a) compiling and retaining permanent records of all transactions and other data associated with its sales transaction and settlement history and use of Cake Payments and (b) reconciling all transaction information that is associated with its Payments Account. Operator agrees to notify Cake of any discrepancies arising from reconciliation and verification of its records with those that may be provided by Cake. Operator expressly agrees that Operator’s failure to (a) notify Cake that Operator has not received settlement funds within 10 days from the date that settlement was due to occur (i.e., settlement is not occurring in any form), or (b) notify Cake of an error or discrepancy in transaction history or report, notice, or invoice within 90 days from the date the report or invoice is first made available to Operator, will be deemed a waiver of any rights to amounts owed in connection with any such error in card payment processing or to reject such report or invoice. In the event Operator believes that Cake has failed in any way to provide the Cake Payments service, Operator agrees to provide Cake with written notice, specifically detailing any alleged failure, within 30 days of the date on which the alleged failure occurred. TO THE EXTENT PERMITTED BY APPLICABLE LAW CAKE AND THE BANK PARTNERS SHALL NOT BE LIABLE OR OTHERWISE RESPONSIBLE TO YOU, AND SHALL HAVE NO OBLIGATION TO REIMBURSE YOU, FOR ANY UNDERPAYMENT TO YOU OR OTHER DISCREPANCY THAT IS NOT REPORTED TO CAKE OR BANK PARTNERS IN WRITING WITHIN 90 DAYS OF YOUR RECEIPT OF THE APPLICABLE STATEMENT.
Operator will be liable for, defend, hold harmless, and will indemnify Cake and its affiliates from and against all claims, losses, liabilities, damages, fines, fees, assessments, expenses (including attorneys’ and collection fees and expenses) and other costs resulting from (a) inaccuracies in the Operator’s bank account information provided to Cake, (b) any instructions from Operator regarding the release or holding of Operator’s settlement funds, and/or (c) any breach by Operator of its obligations under any Operator funding program or any misrepresentation by Operator.
Operator will be assessed fees for each Operator funding failure (i.e. attempt to credit or debit the Bank Account fails for any reason) and/or for each notification of change received in connection with an ACH attempt.
Operator shall also provide Cake in the event Cake is not otherwise notified, with prompt notice as to any reports or communications from the Card Networks relative to the actual or threatened assessment of any, fines, and penalties to be charged by a Card Network.
Operator further agrees that it will take all steps necessary to assist Cake in complying with Cake’s obligations arising under the Card Network Rules and applicable laws related to the settlement of transactions, including but not limited to filing of quarterly or other reports required under the Card Network Rules and the payment of assessments, chargebacks and fees in connection with transactions processed under this Payfac Agreement.
Except as required by law, Operator is solely responsible for compiling and retaining permanent records of all transactions and other data associated with the Payments Account, Operator’s transaction history and use of the Cake Payments service.
The amount of a transaction may be reversed (charged back) to Operator if the transaction (a) does not comply with Card Network Rules, Bank Partner rules, or the terms of this Payfac Agreement, (b) is disputed by a Buyer, (c) is reversed for any reason by the Card Networks, our Bank Partner(s), or a Buyer or Buyer’s financial institution, (d) was not authorized or improperly authorized or there is reason to believe that the transaction was not authorized (due to, for example, error), or (e) is allegedly unlawful (a “Chargeback”).
Operator is immediately liable to and shall pay Cake for the full amount of payment of any Chargeback (i.e., face amount of the card transaction) plus any associated Fees, fines, expenses or penalties (including those assessed by Bank Partners or the Card Networks) regardless of the reason for, or timing of, the Chargeback. Operator hereby authorizes Bank Partners to debit without notice Chargebacks and related handling fees from Operator’s daily collected transactions, and if such collections are inadequate to reimburse Cake, to deduct such amounts by ACH debit or other means from the Bank Account or Reserve. Operator shall pay all costs and expenses, including without limitation attorneys’ fees and other legal expenses, incurred by or on behalf of Cake in connection with the collection of any unpaid Chargebacks.
Further, if Cake reasonably believes that a Chargeback is likely with respect to any transaction, the Bank Partners may withhold the amount of the potential Chargeback from payments otherwise due to Operator under this Payfac Agreement until such time that: (a) a Chargeback is assessed due to a Buyer’s complaint, in which case Cake will retain the funds; (b) the period of time under applicable law or regulation by which the Buyer may dispute that the transaction has expired; or (c) Cake determines that a Chargeback on the transaction will not occur.
Operator agrees to assist Cake when requested, at Operator’s expense, to investigate any of Operator’s transactions processed through the Cake Payments service. Operator shall respond to all Chargebacks within ten calendar days after notice. Failure to respond within each ten day period shall constitute a waiver by Operator of its right to question or reverse a Chargeback. Operator shall provide the necessary information to investigate or help resolve any Chargeback. Cake does not assume any liability for any assistance to Operator in contesting Chargebacks. Operator grants Cake permission to share records or other information required with third parties, such as the cardholding Buyer and financial institutions, in order to investigate and/or mediate a Chargeback. If the Chargeback is contested successfully, Bank Partner will release the reserved funds to Operator. If the Buyer’s issuing bank or the Card Network does not resolve a dispute in Operator’s favor or you choose not to contest the Chargeback, the Chargeback amount and any associated fees may be recovered from Operator. Operator acknowledges that its failure to assist Cake in a timely manner when investigating a transaction, including providing necessary documentation within ten (10) days of our request, may result in an irreversible Chargeback. Cake reserves the right, upon notice to Operator, to charge a fee for mediating and/or investigating Chargeback disputes.
At any point, Cake, Cake’s Bank Partners or the Card Networks, may determine that Operator is incurring excessive Chargebacks. The Card Networks impose fines or impose restrictions on Operator in the event it experiences excessive Chargebacks as described in the Card Network Rules. Excessive Chargebacks may also result in restrictions to the use of Cake Payments, including without limitation, (a) changes to the terms of the Reserve, (b) increases to applicable Fees, (c) delays in the payout of settlement funds, or (d) possible suspension of Operator’s Payments Account and Cake Payments service. Operator shall reimburse and indemnify Cake for any fines imposed by the Card Networks as a result of excessive Chargebacks.
8. Supported Cards and Limited Acceptance.
Cake Payments supports most U.S. issued credit cards that have a Visa, MasterCard, Discovery or American Express logo. However, the types of payment cards supported may change from time to time without prior notice. Operator is solely responsible for properly verifying the identity of a user of a presented payment card. Operator may elect by providing notice to Cake to be a “Limited Acceptance Provider,” which means that Operator has elected to accept only certain VISA/MasterCard card types. As a Limited Acceptance Provider, Operator will be solely responsible for the implementation of its decision for limited acceptance. Operator will be solely responsible for policing, at the point of sale, the card type(s) of transactions it submits for processing. Should Operator submit a transaction for processing for a card type it has indicated it does not wish to accept, Cake may process that transaction and Operator will pay the applicable fees, charges, and assessments associated with that transaction. To the extent Cake Payments now or in the future supports payments via Apple Pay in the U.S., any Apple terms and conditions governing use of the Apple Pay platform, including Apple marketing guidelines, apply.
D. Other Operator Obligations
1. Rules; Laws. The Card Networks have established operating rules, regulations, guidelines, by-laws, and policy statements, including but not limited to the Payment Card Industry Data Security Standard, the VISA Cardholder Information Security Program, the MasterCard Site Data Protection Program, and any other program or requirement that may be published and/or mandated by the Card Networks or payment networks, that are applicable to financial institutions and merchants (the “Card Network Rules”). Notwithstanding Cake’s assistance in understanding the Card Network Rules, Operator expressly acknowledge and agree that Operator is assuming the risk of compliance with all provisions of the Card Network Rules, regardless of whether Operator has possession of those provisions. The Card Networks make excerpts of their respective Card Network Rules available on their websites (including usa.visa.com, www.mastercard.com, www.americanexpress.com and www.discover.com). Exhibit B to this Payfac Agreement sets forth certain specific requirements of the American Express Merchant Regulations, US. The Card Networks reserve the right to amend the Card Network Rules. Cake reserves the right to amend the Payfac Agreement at any time as necessary to comply with Card Network Rules or otherwise address changes in Cake Payments.
In addition, Operators are required to comply with all other applicable rules, regulations and requirements of payment processor and banking partners, banks, institutions, organizations, associations, or networks which govern or affect any services provided under this Payfac Agreement, and all state and federal laws, rules and regulations which govern or otherwise affect the activities of Operator, including, but not limited to, those of the National Automated Clearing House Association (which include requirements for record keeping and proper authorization for transmission of entries), and the Federal Trade Commission (“FTC”), as any or all of the foregoing may be amended and in effect from time to time.
Operator acknowledges receipt and review of the Bank Rules, which are incorporated into this Payfac Agreement by reference as Exhibit C. Operator agrees to fully comply with all of the terms and obligations in the then current Bank Rules, as changed or updated by Cake’s Bank Partners from time to time, at Bank Partner’s sole reasonable discretion with notice in accordance with Bank Partner’s standard operating procedures.
Operator further agrees that it will fully comply with any and all confidentiality and security requirements of the USA Patriot Act (or similar law, rule or regulation) and the Card Network Rules.
2. Merchant Suppliers.
From time to time Operator may use one or more third party entities other than Cake, including but not limited to, Operator’s software providers, equipment providers, and/or third party processors (“Merchant Supplier”) in connection with its use of the Cake Payments services and/or the processing of some or all of its card transactions. To the extent applicable to the service type provided by the Merchant Supplier, Operator shall make commercially reasonable best efforts to cause any Merchant Supplier to complete any steps or certifications required by any Card Network with respect to registrations, PA-DSS, PCI, audits, etc. Operator shall cause its Merchant Supplier to cooperate with Cake in completing any such steps or certifications (if applicable), and in performing any necessary due diligence on such Merchant Supplier. Operator shall be solely responsible for any and all applicable fees, costs, expenses and liabilities associated with such steps, registrations, and certifications. Operator shall bear all risk and responsibility for conducting
Operator’s own due diligence regarding the fitness of any Merchant Supplier(s) for a particular purpose and for determining the extent of such Merchant Supplier’s compliance with the Bank Rules, the Card Network Rules, and applicable law. Cake shall not in any event be liable to Operator or any third party for any actions or inactions of any Merchant Supplier used by Operator, even if Cake introduced and/or recommended the use of such Merchant Supplier to Operator, or never objected to the use of such Merchant Supplier, and Operator hereby assumes all such liability; except to the extent that the acts or omissions giving rise to such liability were directly caused by Cake’s negligence or willful misconduct.
3. Cardholder Information.
Operator shall not disclose, sell, purchase, provide, or exchange Buyer cardholder name, address, account number or other information to any third party (a “Disclosure”) to the extent such Disclosure (or related act) is prohibited by the Card Network Rules or applicable law other than to Cake for the purpose of completing a sales transaction. Operator represents and warrants that neither it, nor its Merchant Suppliers shall retain or store any portion of the magnetic-stripe data subsequent to the authorization of a sales transaction, nor any other data to the extent such retention (or related act) is prohibited by the Card Network Rules, applicable law and/or the Payfac Agreement.
4. Third Party Assessments.
Notwithstanding any other provision of this Payfac Agreement, Operator shall be responsible for all amounts directly imposed or assessed to (a) Operator in connection with this Payfac Agreement by third parties (“Third Party Assessors”) directly arising from an act or omission of Operator to the extent such act or omission was not a result of the negligence or intentional misconduct of Cake and (b) Cake by Third Party Assessors to the extent such amounts arise from the performance of activities that are reasonably necessary under this Payfac Agreement and the payment of which can reasonably be construed as Operator’s responsibility under this Payfac Agreement in light of its purposes. Third Party Assessors include, but are not limited to, a Card Network, and Merchant Suppliers (including telecommunication companies). Such amounts include, but are not limited to, fees, fines, assessments, penalties, loss allocations, etc. Cake shall make commercially reasonable best efforts to provide Operator with prior written notice when material third party assessment amounts not identified in this Payfac Agreement are reasonably likely to be first imposed on Cake. Any changes or increases in such amounts shall automatically become effective upon notice to Operator in accordance with Cake’s standard operating procedure and in the absence of a good faith dispute shall be payable by Operator within a reasonable amount of time after assessed by Cake. In the event of a Float Event ( as defined below), Cake reserves the right to assess to Operator, and Operator shall pay to Cake, a reasonable cost of funds associated with the Float Event (which Cake may at its option assess as a transaction surcharge to the extent the cost of funds are not disputed in good faith) (the “Float Fees”), the amount of which shall be determined by Cake in its reasonable discretion, and which may be changed by Cake from time to time, and such Float Fees shall be effective as of the start of the Float Event and in the absence of a good faith dispute shall be immediately payable by Operator within a reasonable amount of time after assessed by Cake. The parties agree that the Float Fees may vary from time to time but is intended to approximate amount of additional costs incurred by Cake to facilitate the Float Event. So long as Cake has actually received notice from the applicable Card Network(s) or Merchant Supplier(s) with respect to fee increases, Cake will use reasonable efforts to provide Operator with notice within a reasonable time and will use reasonable efforts to provide such notice in advance of the increase in fees in accordance with Cake’s then current standard operating procedures.
“Float Event” shall mean a circumstance where Cake or the Bank Partners advance settlement or any amounts and/or delays the assessment of any fees to Operator (a) due to a request from Operator or (b) as is commercially necessary in order to deliver the Cake Payments service.
Cake reserves the right to enter into other agreements pertaining to the Cake Payments services with others including without limitation other Operators. During the term of this Payfac Agreement, the parties agree that Operator will not use the services of any bank, corporation, entity, or person other than Cake and the Bank Partners under this Payfac Agreement to provide services similar to those contemplated in this Payfac Agreement. This exclusivity provision will not apply in any event where Cake terminates this Payfac Agreement or if Cake is unable or unwilling to provide services (in materially significant form) required by Operators.
6. Taxes and Reporting.
Operator is solely responsible for determining any and all taxes assessed, incurred, or required to be collected, paid, or withheld for any reason in connection with its goods and services and/or the payments received from Buyers in connection with use of the Cake Payments service (“Transaction Taxes”). It is Operator’s sole responsibility to (a) appropriately apply the correct tax rates to determine what, if any, Transaction Taxes apply to payments Operator makes or receives and comply with federal, state and local tax record-keeping requirements. Further, it is Operator’s sole responsibility to collect, report and remit the correct Transaction Taxes to the appropriate tax authority.
7. Payment Card Data Security.
Operator shall comply with all applicable state and federal laws and rules as well as standards, guidelines, practices or procedures adopted, recommended or required by the applicable Card Networks with respect to data security or protection of cardholder data, including, without limitation, Payment Card Industry (“PCI”) Data Security Standards (“PCI-DSS”), PIN Entry Device Standards, Visa’s Cardholder Information Security Program, Discover’s Information Security & Compliance Program, American Express’s Data Security Operating Policy, MasterCard’s Site Data Protection Program, Visa’s Payment Application Best Practices and Payment Application-Data Security Standards (“PA-DSS”). Operator shall have appropriate security procedures in place to accept cardholder data and provide Cake with evidence of compliance with PCI DSS and/or PA DSS upon reasonable request. Operator must not store CVV2 data at any time. Information on PCI-DSS can be found on the PCI Council’s website.
Operator is fully responsible for the security of data (including but not limited to cardholder data) on Operator’s website or otherwise in its possession or control. Operator agrees to comply with all applicable laws and Card Network Rules rules in connection with the collection, security and dissemination of any personal, financial, or transaction information. Unless Operator receives the express consent of its Buyer, it may not retain, track, monitor, store, disclose or otherwise use data (e.g. to send any marketing or promotional materials to Buyer) except for the transaction for which it was given and any post-transaction activities in connection with such immediate transaction (e.g. chargeback).
If Operator is using Cake Payments in connection with an electronic commerce website, such website must prominently display (a) the name of the Operator (including the name that will appear on the cardholder statement), (b) a customer service contact for Operator, including email address or telephone number and (c) the address, including the country, of Operator’s permanent establishment either on the same screen view as the checkout screen used to present the final transaction amount or within the sequence of web pages the Buyer cardholder accesses during the checkout process.
E. Other Legal Terms
1. Confidentiality. Operator agrees that the Cake Payments and any materials and data associated therewith is the sole property of Cake and its parent and subsidiary affiliates and business partners and includes valuable trade secrets of Cake. Operator agrees to treat the Cake Payments service and related data as confidential and will not without the express written consent of Cake: (a) distribute or market the Cake Payments and any associated data to any third party; (b) disclose information relating to the performance or quality of the Cake Payments to any third party (except as permitted by law); or (c) disassemble, decompile, or reverse engineer any portion of the Cake Payments. Any information that constitutes a trade secret under applicable law shall be kept confidential for so long as such information continues to qualify as a trade secret.
With respect to confidential or proprietary information that is provided by Operator or received by Cake or its operating affiliates in connection with this Payfac Agreement, including but not limited to any and all credit card transaction and fees and related sales transaction data (collectively, “Operator Data”), neither Cake nor its operating affiliates shall disclose any Operator Data in violation of the Card Network Rules or applicable laws, rules, and regulations. Subject solely to the foregoing and applicable law, Cake and/or its operating affiliates may disclose or use Operator Data, and Operator hereby grants Cake a royalty-free, non-exclusive, perpetual license to use and distribute such Operator Data, in any discrete or aggregated form (including data formulated from such data), (a) incidentally as part of the performance or development of existing or new services or products for the end-users or other Operators of Cake and Cake’s direct and indirect affiliates, business partners, including non-affiliated marketing partners, or third party vendors (collectively, “Disclosure Parties”), or their respective affiliates, (b) for the purposes of analysis and improving the services or products of Cake, the Disclosure Parties, or their respective affiliates, (c) in order to promote existing or new services of Cake, the Disclosure Parties, or their respective affiliates, including, without limitation, the right to contact Operator, including by email, regarding new services or products or promotions (or other similar activities), (d) in connection with the development of existing or prospective non-affiliated third party business relationships, (e) in connection with, or during the negotiation of, any merger, sale of company stock or assets, financing, or dissolution of Cake’s business (or a portion thereof); or (f) to the extent Cake believes disclosure is reasonably necessary to comply with any law or governmental request; to enforce applicable agreements or policies; to protect the security of Cake services; or to protect Cake, other Operators, consumers, or the public from harm or illegal activities.
If a party provides permission to the other to obtain or disclose information in connection with this Payfac Agreement such party releases and waives any right or claim arising out of or related to such disclosure, including defamation claims, even if the information that is disclosed is incorrect or incomplete. Operator acknowledges that its business name and the name of its principals may be reported to MATCH and hereby consents to such reporting, and waives and holds Cake and its affiliates harmless from all claims and liabilities it may have as a result of such reporting.
2. Term and Termination.
2.1. Term. This Payfac Agreement commences and shall be binding as of the date Operator executes this Payfac Agreement, including execution by manual signature, electronic signature, or by similar click-through such as by clicking “I agree”. The Payfac Agreement shall continue in effect for the term identified on the Order Form and unless otherwise noted on the applicable Order Form shall automatically renew on a month to month basis thereafter, unless and until (a) Operator terminates the Payfac Agreement by giving written notice to Cake at least 30 days before the expiration of the then current term, (b) the Payfac Agreement is terminated pursuant to this Section, or (c) the parties agree in writing to a new term. Subject to Cake’s right to change Fees herein, renewal of any Cake Payments will be at Fees equal to the higher of (a) the Fees in effect immediately prior to the renewal and (b) Cake’s then-current pricing for Cake Payments (or its reasonable equivalent if the service as originally contracted is no longer available) as applicable to similarly situated Operators at the time of the renewal, unless the parties otherwise agree in writing at the time of renewal.
2.2. Termination. Cake may terminate this Payfac Agreement or suspend or close your Payments Account for any reason or no reason at any time upon notice and to the extent permitted by applicable law and the Bank Partners. Cake may also suspend Cake Payments and instruct Banking Partners to suspend Operator’s access to the Payments Account (including the funds associated with its account) if Operator (a) violates the terms of this Payfac Agreement, any other agreement it has with Cake, or Cake’s policies, (b) poses a credit or fraud risk to Cake, or (c) provides any false or misleading information or otherwise engages in illegal conduct. Operator understands that Cake’s Bank Partners have a right to immediately terminate an Operator or Cake for good cause or fraudulent or other activity or upon Card Network request and Cake is obligated to suspend or terminate services and terminate Operator’s Payments Account in such event.
Operator may terminate this Payfac Agreement and close its Payments Account prior to the end of the term (if any) in the event that (a) Cake or its Bank Partners materially breaches any of the provisions of the Payfac Agreement and fails to cure such breach within 30 days of receipt of written notice from you specifying such material breach or (b) there is a Fees Change or Agreement Change subject to the terms of this Payfac Agreement
2.3. Effect of Termination. Upon any termination of this Payfac Agreement, Operator agrees: (a) that the license provided under this Payfac Agreement shall end, (b) that Cake reserves the right (but have no obligation) to delete all of Operator information and Payments Account data stored on our servers, and (c) that Cake shall not be liable to Operator or any third party for termination of access to the Cake Payments service, deletion of Operator information or Payments Account data, or export of Operator’s information or Payments Account data.
When Operator closes its Payments Account, any pending transactions will be cancelled. Further, any funds that the Bank Partners hold in custody for Operator at the time of closure, less any applicable Fees, refunds, and other liabilities owed (or that Bank Partners reasonably anticipate may become due after the termination date), will be paid out to Operator, assuming all payout-related authentication requirements have been fulfilled (for example, Operator may not close the Payments Account as a means of evading the payout schedule). If an investigation is pending at the time the Payments Account is closed, the Bank Partners may hold funds or establish a Reserve as described herein. If Operator is later determined to be entitled to some or all of the funds in dispute, the Bank Partners will release those funds.
Cake will not be liable to Operator for compensation, reimbursement, or damages in connection with any termination or suspension of Cake Payments service. Any termination of this Payfac Agreement does not relieve Operator of any obligations to pay any Fees or costs accrued prior to the termination and any other amounts owed by Operator to Cake as provided in this Payfac Agreement.
Any provision that is reasonably necessary to accomplish or enforce the purpose of this Payfac Agreement shall survive and remain in effect in accordance with its terms upon the termination of this Payfac Agreement.
The termination of this Payfac Agreement does not relieve Operator of any obligations it may have under third party agreements or an agreement for Other Cake Services (see Part A, Section 2) unless expressly stated to the contrary in such agreement.
3. Intellectual Property Ownership.
Cake grants Operator a personal, limited, non-exclusive, revocable, non-transferable license, without the right to sublicense, to electronically access and use the Cake Payments service solely to accept and receive payments and to manage the funds Operator so receive. Operator will be entitled to download updates to the Cake Payments service, subject to any additional terms made known to Operator at that time, when Cake makes these updates available.
The intellectual property that inheres in the Cake Payments is licensed and not sold. The Cake Payments is protected by copyright, trade secret and other intellectual property laws. Subject to the intellectual property rights of Cake’s business partners, Cake owns the title, copyright, marks and other Intellectual Property (as defined below) in the Cake Payments and all copies of the Cake Payments. Operator does not obtain any right, title or interest in such Intellectual Property, including any rights to trademarks or service marks of Cake or its business partners. “Intellectual Property” means all present and future worldwide copyrights, trademarks, trade secrets, patents, patent rights, moral rights, rights in databases and other proprietary rights of any nature, and all applicable applications and registrations, renewals and extensions thereof, under the laws of any jurisdiction. Any idea or suggestion submitted by Operator to improve the Cake Payments is gratuitous may be used by Cake in any manner commercial or otherwise and modified or otherwise without notice, compensation or attribution to Operator or any other person and shall not be subject to any obligation of confidentiality.
Operator is responsible for all Chargebacks, Claims, fines, fees, penalties and other liability arising out of or relating to Operator’s violation of this Payfac Agreement, and/or use of the Cake Payments service. “Claim” means a challenge to a payment that Operator or a Buyer files directly with Cake. Cake shall have the final decision-making authority with respect to Claims, including without limitation claims for refunds for purchased items that are filed with Cake by Operator or its Buyers. Operator will be required to reimburse Cake for its liability. Operator’s liability will include the full purchase price of the item plus the original shipping cost.
Without limiting the foregoing, Operator agrees to defend, indemnify and hold harmless Cake and its indirect or direct subsidiary, parent or affiliate companies or any of their employees, officers, directors, and agents (collectively, the “Cake Entities”) from and against all claims, losses, expenses, tax assessments, penalties, interest, and expenses (including without limitation reasonable attorneys’ fees and costs) arising out of any claim, action, audit, investigation, inquiry, or other proceeding instituted by a person or entity that arises out of or relates to: (a) any actual or alleged breach of Operator representations, warranties, or obligations set forth in this Payfac Agreement, including without limitation any violation of Cake policies or applicable policies of its business partners or Card Network rules; (b) any claim for state sales, use, or similar tax obligations of Operator arising from Buyer transactions; (c) wrongful or improper use of any Cake Payments; (d) Operator’s violation of any rights of a third party, (e) Operator’s violation of any federal, state or local law, rule or regulation, including but not limited to any applicable data privacy or security laws, any laws governing gift cards, and any law or regulation governing the use, sale, and distribution of alcohol, or any other regulated Operator goods and/or services; (f) the negligence or willful misconduct of Operator (including its agents), (g) any claim arising out of Operator’s misuse of Buyer data, (h) any transaction submitted by you through the Cake Payments service (including without limitation the accuracy of any product information that you provide or any claim or dispute arising out of products or services offered or sold by you), or (i) third party indemnity obligations incurred by Cake as a direct or indirect result of Operator’s acts or omissions (including indemnification of any Card Network or card issuer).
Cake maintains the right to control its own defense and to choose its own legal counsel in any matter subject to the foregoing indemnification, regardless of any conflict of interest between Cake and Operator.
5. Disclaimer of Warranties.
THE CAKE PAYMENTS SERVICE IS PROVIDED ON AN “AS IS” AND “AS AVAILABLE” BASIS. USE OF THE SERVICE IS AT OPERATOR’S OWN RISK. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, THE CAKE PAYMENTS SERVICE IS PROVIDED WITHOUT WARRANTIES OF ANY KIND, WHETHER EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR NON-INFRINGEMENT. NO ADVICE OR INFORMATION, WHETHER ORAL OR WRITTEN, OBTAINED BY OPERATOR FROM CAKE OR THROUGH THE CAKE PAYMENTS SERVICE WILL CREATE ANY WARRANTY NOT EXPRESSLY STATED HEREIN. WITHOUT LIMITING THE FOREGOING, THE CAKE ENTITIES, THEIR PROCESSORS, THEIR PROVIDERS, THEIR LICENSORS AND THE BANK PARTNERS (AND THEIR RESPECTIVE SUBSIDIARIES, AFFILIATES, AGENTS, DIRECTORS, AND EMPLOYEES) DO NOT WARRANT THAT THE CONTENT IS ACCURATE, RELIABLE OR CORRECT; THAT THE CAKE PAYMENTS SERVICE WILL MEET YOUR REQUIREMENTS; THAT THE CAKE PAYMENTS SERVICE WILL BE AVAILABLE AT ANY PARTICULAR TIME OR LOCATION, UNINTERRUPTED OR SECURE; THAT ANY DEFECTS OR ERRORS WILL BE CORRECTED; OR THAT THE CAKE PAYMENTS SERVICE IS FREE OF VIRUSES OR OTHER HARMFUL COMPONENTS.
CAKE DOES NOT WARRANT, ENDORSE, GUARANTEE, OR ASSUME RESPONSIBILITY FOR ANY PRODUCT OR SERVICE ADVERTISED OR OFFERED BY A THIRD PARTY THROUGH THE CAKE PAYMENTS SERVICE OR ANY HYPERLINKED WEBSITE OR SERVICE, OR FEATURED IN ANY BANNER OR OTHER ADVERTISING, AND CAKE WILL NOT BE A PARTY TO OR IN ANY WAY MONITOR ANY TRANSACTION BETWEEN YOU AND THIRD-PARTY PROVIDERS OF PRODUCTS OR SERVICES.
SOME JURISDICTIONS MAY PROHIBIT A DISCLAIMER OF WARRANTIES AND OPERATOR MAY HAVE OTHER RIGHTS THAT VARY FROM JURISDICTION TO JURISDICTION.
6. Limitation of Liability.
Please read this Section carefully since it limits the liability of the Cake Entities and certain of their suppliers and partners, including the Bank Partners. Nothing in this Section is intended to limit any rights Operator may have that may not be lawfully limited.
NO CAKE ENTITY OR BANK PARTNER OR ANY OF THEIR PROCESSORS, SERVICE PROVIDERS, SUPPLIERS, OR LICENSORS (OR THEIR RESPECTIVE AFFILIATES, AGENTS, DIRECTORS, OR EMPLOYEES) WILL BE LIABLE TO OPERATOR OR ANY THIRD PARTY FOR INDIRECT, SPECIAL, INCIDENTAL, CONSEQUENTIAL, OR PUNITIVE DAMAGES, INCLUDING DAMAGES RELATED TO FINES OR FEES ASSESSED BY THE FINANCIAL INSTITUTION HOLDING OPERATOR’S BANK ACCOUNT OR FOR LOSS OF PROFITS, GOODWILL, USE, DATA, OR OTHER INTANGIBLE LOSSES, THAT RESULT FROM THE USE OF, INABILITY TO USE, OR UNAVAILABILITY OF THE CAKE PAYMENTS SERVICES OR OTHERWISE ARISE IN CONNECTION WITH THE PAYFAC AGREEMENT. UNDER NO CIRCUMSTANCES WILL ANY CAKE ENTITY BE RESPONSIBLE FOR ANY DAMAGE, LOSS, OR INJURY RESULTING FROM HACKING, TAMPERING, OR OTHER UNAUTHORIZED ACCESS OR USE OF THE CAKE PAYMENTS SERVICES OR THE ACCOUNT, OR THE INFORMATION CONTAINED IN THE ACCOUNT OR ACCESSIBLE VIA THE CAKE PAYMENTS SERVICES.
TO THE FULLEST EXTENT PERMITTED BY LAW, THE CAKE ENTITIES, BANK PARTNERS AND THEIR PROCESSORS, SERVICE PROVIDERS, SUPPLIERS, OR LICENSORS (AND THEIR RESPECTIVE AFFILIATES, AGENTS, DIRECTORS, OR EMPLOYEES) ASSUME NO LIABILITY OR RESPONSIBILITY FOR ANY (a) LOSS OF PAYMENT TRANSACTIONS OR LOSS OF DATA, (b) PERSONAL INJURY OR PROPERTY DAMAGE, OF ANY NATURE WHATSOEVER, RESULTING FROM OPERATOR’S ACCESS TO AND USE OF THE CAKE PAYMENTS SERVICE, (c) ANY UNAUTHORIZED ACCESS TO OR USE OF CAKE’S SYSTEMS OR ANY AND ALL PERSONAL INFORMATION OR FINANCIAL INFORMATION STORED ON THOSE SYSTEMS, (d) ANY INTERRUPTION OR CESSATION OF TRANSMISSION TO OR FROM THE CAKE PAYMENTS SERVICES, (e) ANY BUGS, VIRUSES, TROJAN HORSES, OR THE LIKE WHICH MAY BE TRANSMITTED TO OR THROUGH THE CAKE PAYMENTS SERVICES BY ANY THIRD PARTY, (f) ANY ERRORS OR OMISSIONS IN ANY CONTENT AND MATERIALS OR FOR ANY LOSS OR DAMAGE OF ANY KIND INCURRED AS A RESULT OF THE USE OF ANY CONTENT MADE AVAILABLE VIA THE CAKE PAYMENTS SERVICES, OR (g) OPERATOR CONTENT OR THE DEFAMATORY, OFFENSIVE, OR ILLEGAL CONDUCT OF ANY THIRD PARTY.
NO CAKE ENTITY, BANK PARTNER OR ANY OF THEIR PROCESSORS, SERVICE PROVIDERS, SUPPLIERS, OR LICENSORS (OR THEIR RESPECTIVE AFFILIATES, AGENTS, DIRECTORS, OR EMPLOYEES) WILL BE LIABLE TO OPERATOR FOR ANY CLAIMS, PROCEEDINGS, LIABILITIES, OBLIGATIONS, DAMAGES, LOSSES OR COSTS IN AN AMOUNT EXCEEDING THE AGGREGATE AMOUNT OF FEES AND CHARGES PAID TO CAKE PURSUANT TO THE PAYFAC AGREEMENT FOR THE APPLICABLE CAKE PAYMENT SERVICES RELATING TO THE CLAIMS, PROCEEDINGS, LIABILITIES, OBLIGATIONS, DAMAGES, LOSSES, OR COSTS IN THE SIX MONTH PERIOD PRECEDING THE EVENT THAT GAVE RISE TO THE CLAIM OF LIABILITY.
OPERATOR RECOGNIZES AND CONFIRMS THAT IF IT INCURS ANY DAMAGES, LOSSES OR INJURIES THAT ARISE OUT OF THE CAKE PAYMENTS SERVICES OR CAKE’S ACTS OR OMISSIONS, THE DAMAGES, IF ANY, CAUSED TO OPERATOR ARE NOT IRREPARABLE OR SUFFICIENT TO ENTITLE IT TO AN INJUNCTION, AND IT WILL HAVE NO RIGHTS TO ENJOIN OR RESTRAIN THE DEVELOPMENT, PRODUCTION, DISTRIBUTION, ADVERTISING, EXHIBITION OR EXPLOITATION OF THE CAKE PAYMENTS SERVICES.
IF OPERATOR IS A CALIFORNIA RESIDENT, OPERATOR WAIVES CALIFORNIA CIVIL CODE SECTION 1542, WHICH SAYS: “A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH, IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.”
Operators who access or use Cake Payments from jurisdictions other than the United States do so at their own volition and are entirely responsible for compliance with all applicable United States and local laws and regulations, including but not limited to export and import regulations. Operators may not use Cake Payments if they are residents of a country embargoed by the United States, or are a foreign person or entity blocked or denied by the United States government.
Operator is solely responsible for determining any taxes assessed or required to be collected, paid, or withheld in connection with its receipt of the Cake Payments (“Service Taxes”). Operator is also solely responsible for collecting, withholding, reporting, and remitting Service Taxes to the appropriate tax authorities; provided, however, that in the event that Cake determines in its sole discretion to calculate and collect Service Taxes from Operator, Cake reserves the right to charge and Operator agrees to pay any Service Taxes as reasonably calculated by Cake.
Cake or the Bank Partners may have tax reporting responsibilities in connection with the Cake Payments service. For example, if applicable Cake or the Bank Partners will report to the Internal Revenue Service on Form 1099-K as required by law, Operator name, address, Tax Identification Number (such as Employment Identification Number or Social Security Number), the total dollar amount of the payments you receive in a calendar year, and the total dollar amount of the payments you receive for each month in a calendar year.
8. Dispute Resolution and Arbitration.
8.1 Generally. In the interest of resolving disputes between Operator and Cake in the most expedient and cost effective manner, Operator and Cake agree that every dispute arising in connection with the Payfac Agreement (“Dispute”) will be resolved by binding arbitration. Arbitration is less formal than a lawsuit in court. Arbitration uses a neutral arbitrator instead of a judge or jury, may allow for more limited discovery than in court, and can be subject to very limited review by courts. Arbitrators can award the same damages and relief that a court can award. The agreement to arbitrate disputes includes all claims arising out of or relating to any aspect of the Payfac Agreement, whether based in contract, tort, statute, fraud, misrepresentation, or any other legal theory, and regardless of whether a claim arises during or after the termination of the Payfac Agreement. OPERATOR UNDERSTANDS AND AGREES THAT, BY ENTERING INTO THE PAYFAC AGREEMENT, OPERATOR AND CAKE ARE EACH WAIVING THE RIGHT TO A TRIAL BY JURY OR TO PARTICIPATE IN A CLASS ACTION.
For purposes of this arbitration provision, references to Operator and Cake also include respective subsidiaries, affiliates, agents, employees, predecessors, successors and assigns as well as authorized users or beneficiaries of the Cake Payments service. In the event that you or Cake are not able to resolve a Dispute with American Express, or a claim against Cake or any other entity that American Express has a right to join, Section 7 of Exhibit B will apply.
8.2. Exceptions. Despite the provisions of the foregoing paragraph, nothing in the Payfac Agreement will be deemed to waive, preclude, or otherwise limit the right of either party to: (a) bring an individual action in small claims court; (b) pursue an enforcement action through the applicable federal, state, or local agency if that action is available; (c) seek injunctive relief in a court of law; or (d) to file suit in a court of law to address an intellectual property infringement claim.
8.3. Arbitrator. Any arbitration between Operator and Cake will be settled under the Federal Arbitration Act, and governed by the Commercial Dispute Resolution Procedures and the Supplementary Procedures for Consumer Related Disputes (collectively, “AAA Rules”) of the American Arbitration Association (“AAA”), as modified by these Terms, and will be administered by the AAA. The AAA Rules and filing forms are available online at www.adr.org, by calling the AAA at 1-800-778-7879, or by contacting Cake.
8.4. Notice; Process. A party who intends to seek arbitration must first send a written notice of the dispute to the other party by certified U.S. Mail or by Federal Express (signature required) or, only if the other party has not provided a current physical address, then by electronic mail (“Notice”). Cake’s address for Notice is: Cake Corporation, 101 Redwood Shores Pkwy, Suite 200, Redwood City, CA 94065. The Notice must: (a) describe the nature and basis of the claim or dispute; and (b) set forth the specific relief sought (“Demand”). The parties will make good faith efforts to resolve the claim directly, but if the parties do not reach an agreement to do so within 30 days after the Notice is received, Operator or Cake may commence an arbitration proceeding. During the arbitration, the amount of any settlement offer made by Operator or Cake must not be disclosed to the arbitrator until after the arbitrator makes a final decision and award, if any. If the dispute is finally resolved through arbitration in Operator’s favor, Cake will pay Operator the highest of the following: (i) the amount awarded by the arbitrator, if any; (ii) the last written settlement amount offered by Cake in settlement of the dispute prior to the arbitrator’s award; or (iii) $1,000.
8.5. Fees. If Operator commences arbitration in accordance with the Payfac Agreement, Cake will reimburse Operator for Operator’s payment of the filing fee, unless Operator’s claim is for more than $10,000, in which case the payment of any fees will be decided by the AAA Rules. Any arbitration hearing will take place at a location to be agreed upon in Santa Clara County, California, but if the claim is for $10,000 or less, Operator may choose whether the arbitration will be conducted: (a) solely on the basis of documents submitted to the arbitrator; (b) through a non-appearance based telephone hearing; or (c) by an in-person hearing as established by the AAA Rules in the county (or parish) of Operator’s billing address. If the arbitrator finds that either the substance of Operator’s claim or the relief sought in the Demand is frivolous or brought for an improper purpose (as measured by the standards set forth in Federal Rule of Civil Procedure 11(b)), then the payment of all fees will be governed by the AAA Rules. In that case, Operator will reimburse Cake for all monies previously disbursed by it that are otherwise Operator’s obligation to pay under the AAA Rules. Regardless of the manner in which the arbitration is conducted, the arbitrator must issue a reasoned written decision sufficient to explain the essential findings and conclusions on which the decision and award, if any, are based. The arbitrator may make rulings and resolve disputes as to the payment and reimbursement of fees or expenses at any time during the proceeding and upon request from either party made within 14 days of the arbitrator’s ruling on the merits.
8.6. No Class Actions. OPERATOR AND CAKE AGREE THAT EACH MAY BRING CLAIMS AGAINST THE OTHER ONLY IN ITS INDIVIDUAL CAPACITY AND NOT AS A PLAINTIFF OR CLASS MEMBER IN ANY PURPORTED CLASS OR REPRESENTATIVE PROCEEDING. Further, unless both Operator and Cake agree otherwise, the arbitrator may not consolidate more than one Person’s claims, and may not otherwise preside over any form of a representative or class proceeding.
8.7. Modifications to this Arbitration Provision. If Cake makes any future change to this arbitration provision, other than a change to Cake’s address for Notice, Operator may reject the change by sending Cake written notice within 30 days of the change to Cake’s address for Notice, in which case Operator’s account with Cake will be immediately terminated and this arbitration provision, as in effect immediately prior to the changes Operator rejected will survive.
8.8. Enforceability. The arbitrator has exclusive authority to resolve any dispute relating to the interpretation, applicability, or enforceability of this binding arbitration agreement. If the “No Class Action” paragraph above is found to be unenforceable or if the entirety of this Section is found to be unenforceable, then the entirety of this Section is null and void, the remaining provisions of these terms will remain in effect in accordance with “Severability” paragraph (below) of this Payfac Agreement and the exclusive jurisdiction and venue described in “Governing Law” paragraph (below) will govern any action arising out of or related to the Payfac Agreement.
9.1. Entire Agreement; Waiver. The Payfac Agreement, along with any applicable policies and agreements made available at Cake’s websites or Operator portal(s) incorporated into the Payfac Agreement by express reference and any exhibits, appendices, addenda, schedules, and amendments explicitly made to the Agreement, sets forth the entire understanding between Operator and Cake with respect to Operator’s use of the Cake Payments services, and supersedes any and all other agreements, oral or in writing, including any agreements as to pricing, implementation schedules, or future releases of services, related to the Cake Payments services, unless made in writing and expressly incorporated into the Payfac Agreement. Notwithstanding the foregoing, an updated version of these Terms and Conditions or any other portion of the Payfac Agreement (including any version made available to Operator by written communication or by notice at Cake’s websites or Operator portal(s)) prevail over previous versions. Any purchase order or similar document that Operator may issue in connection with the Payfac Agreement will be for ordering purposes only and any terms and conditions on that purchase order or other document will be of no force or effect.
No waiver by any party of any provision of this Payfac Agreement will be valid unless the same will be in writing and signed by the party making such waiver. No Cake sales representative is authorized to make any change to the Payfac Agreement. No waiver of a provision of this Payfac Agreement shall constitute a waiver of any other provision or of the same provision on another occasion. NOTHING IN THE AGREEMENT WILL AFFECT ANY NON-WAIVABLE STATUTORY RIGHTS THAT APPLY TO OPERATOR.
9.2. Right to Amend. Subject to the terms hereunder and applicable law, Cake has the right to change or add to the terms of this Payfac Agreement at any time, and to change, delete, discontinue, or impose conditions on any feature or aspect of the Cake Payments service or software (an “Agreement Change”) with notice that is reasonable in light of the circumstances, including such notice on Cake’s website or any other website maintained or owned by Cake for the purposes of providing services related to this Payfac Agreement. Operator understands the importance of regularly reviewing these Terms and other portions of the Payfac Agreement as updated. Use of the Cake Payments services after notice of any Agreement Change will confirm that Operator have read, accepted, and agreed to be bound by the modifications to the Payfac Agreement or constitute Operator’s acceptance of the changed Cake Payments service. Notwithstanding the foregoing, (a) any Dispute that arose before the effective date of an Agreement Change shall be governed by the version of the Payfac Agreement (including the binding individual arbitration clause) that was in place when the Dispute arose and (b) in the event that an Agreement Change negatively and materially impacts Operator’s rights under this Payfac Agreement, then Operator may terminate the Payfac Agreement and any agreement for Other Cake Services related to Cake Payments (subject to the terms herein (including but not limited to Part E, Section 2.3 (“Effect of Termination”))) by providing written notice thereof to Cake, provided such notice must be given within 30 days following the date of notice by Cake of the Agreement Change.
9.3. Severability; Remedies. If any provision of this Payfac Agreement is determined to be unenforceable, that provision will be limited or eliminated to the minimum extent necessary for this Payfac Agreement to remain enforceable.
This Payfac Agreement has been reviewed by Operator with the benefit of independent legal counsel to the extent Operator considers necessary and any rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not apply to the construction or interpretation of this Payfac Agreement. The rights conferred upon Cake in this Payments
Agreement are not intended to be exclusive of each other or of any other rights and remedies Cake may have at law or in equity. Rather, each and every right Cake may have under this Payfac Agreement, at law or in equity is cumulative and concurrent and in addition to every other right.
9.4. Electronic Communications Delivery Policy. Operator agrees and consents to receive electronically all agreements, documents, notices, disclosures and communications that Cake provides to Operator regarding Cake Payments or Operator’s your Payments Account (“Communications”). Communications include, but are not limited to:
1. Cake agreements and policies, such as this Payfac Agreement, including updates
2. Account statements and history;
3. Transaction receipts or confirmations;
4. Annual disclosures or notices; and
5. Federal or state tax forms or statements such as Form 1099-K that Cake or its Bank Partners are required (if required) to make available to Operator.
Cake will provide these Communications to Operator by posting them on Cake’s website(s) or applications, the merchant/operator POS portal, or emailing them to an email address listed in Operator’s Payments Account. Electronic Communications shall have the same meaning and effect as if provided by physical paper.
By giving consent Operator is confirming that it has access to the necessary equipment and is able to receive, open, and print or download a copy of any Communications for Operator’s records. Operator may print or save a copy of these Communications for Operator’s records as they may not be accessible online at a later date.
Such Communications shall be considered to be received by Operator within 24 hours of the time it is posted to Cake’s website or merchant portal or emailed to you unless Cake receives notice that the email was not delivered. Operator may withdraw consent to receive Communications electronically by writing to Cake at “Attn: Electronic Communications Delivery Policy, 101 Redwood Shores Pkwy, Suite 200, Redwood City, CA 94065,” or by contacting us via email@example.com. Please note that Cake may not be able to support such request, in which case Cake may need to terminate Operator’s account. If you fail to provide or if you withdraw your consent to receive Communications electronically, Cake reserves the right to either deny your application for a Payments Account, restrict or deactivate your account, close your account and any sub-account, or charge you additional fees for paper copies.
It is your responsibility to keep your primary email address up to date. Operator agrees that if Cake sends a Communication but Operator does not receive it because Operator’s primary email address (as provided) on file is incorrect, out of date, blocked by Operator’s service provider, or Operator is otherwise unable to receive electronic Communications via such email address, Cake will be deemed to have provided the Communication. Please note that if Operator uses a spam filter that blocks or re-routes emails from senders not listed in its email address book, Operator must add Cake to its email address book so that Operator will be able to receive the Communications Cake sends to Operator.
9.5. Excused Non-Performance. Neither party will be liable for any delay in or failure to perform under this Payfac Agreement as a result of circumstances beyond such party’s reasonable control; provided that the foregoing shall not excuse Operator’s responsibility for refunds, Chargebacks and fulfilling Buyer orders. Excusing circumstances include flood; war; embargo; failure or delay by third parties; and laws of any governmental authority.
9.6. Governing Law. The Payfac Agreement and any Dispute will be governed by and construed in accordance with the laws of the State of California and/or applicable federal law without reference to conflict of laws principles that would result in the application of the laws of another jurisdiction. Subject to and without waiver of the arbitration Section above, Operator agrees that any judicial proceedings (other than small claims actions in consumer cases) will be brought in and Operator
hereby consents to the exclusive jurisdiction and venue in the state courts in the County of Santa Clara, California, or federal court for the Northern District of California. Unless otherwise required by law, an action or proceeding by Operator relating to any Dispute must commence within one year after the cause of action accrues.
9.7. Assignment. This Payfac Agreement, and any rights and licenses granted hereunder, may not be transferred, encumbered or assigned by Operator. Cake may assign this Payfac Agreement any or all of Cake’s rights hereunder without restriction.
9.8. Representations and Warranties. Operator represents and warrants to Cake that: (a) Operator is eligible to register and use the Cake Payments service and have the right, power, and ability to enter into and perform under this Payfac Agreement; (b) the name identified by Operator when it registered is the name or business name under which Operator sells goods and services; (c) the account application/registration information provided to Cake is accurate in all respects; (d) any sales transactions with a Buyer will represent a bona fide sale; (e) any sales transactions submitted will accurately describe the goods and/or services sold and delivered to Buyer; (f) Operator will fulfill all obligations to each Buyer for which it enters into a transaction and will resolve any consumer dispute or complaint directly with such Buyer; (g) Operator and all transactions initiated by Operator will comply with all federal, state, and local laws, rules, and regulations applicable to Operator’s business, including any applicable tax laws and regulations; (h) except in the ordinary course of business, no transaction submitted by Operator through the Cake Payments service will represent a sale to any principal, partner, proprietor, or owner of Operator’s entity; (i) Operator will not use the Cake Payments service, directly or indirectly, for any fraudulent undertaking or in any manner so as to interfere with the use of the Cake Payments service; and(j) Operator’s use of the service will be in compliance with this Payfac Agreement.
9.9. Interpretation. Section headings are used in the Payfac Agreement for convenience of reference only and will not affect the meaning of any provision of the Payfac Agreement. For purposes of the Payfac Agreement: (a) the words “include,” “includes” and “including” will be deemed to be followed by the words “without limitation”; (b) the words “such as”, “for example” “e.g.” and any derivatives of those words will mean by way of example and the items that follow these words will not be deemed an exhaustive list; and (c) the word “or” is used in the inclusive sense of “or” and the terms “or,” “any,” and “either” are not exclusive. No ambiguity will be construed against any party based on a claim that the party drafted the language.
MERCHANT SERVICES AGREEMENT
This Merchant Services Agreement (“Direct Services Agreement”) sets forth the terms that apply to all merchant users of Cake Payments (as defined in the Payfac Agreement) for the acceptance of card payments whose Visa or MasterCard transaction volume (in dollar amount) is anticipated to exceed certain limits (set by Visa and MasterCard from time to time) during any 12 month period. Such Operators are “Commercial Entities” (as defined by Visa and MasterCard). This Direct Services Agreement constitutes a separate legally binding contract between (1) you, as a Operator and Commercial Entity, and (2) VANTIV, LLC, having its principal office at 8500 Governors Hill Drive, Symmes Township, OH 45249-1384 and its designated Member Bank (collectively “Acquirer”) to govern the authorization, conveyance and settlement of Transactions (defined below) facilitated by Cake Payments. The Cake Operator has agreed to the Cake Payment Facilitator Agreement or equivalent agreement, which sets forth requirements regarding Cake Payments and are incorporated into this Direct Services Agreement by reference.
Acquirer will provide Operator with certain payment processing services (“Direct Services”) in accordance with the terms of this Direct Services Agreement. In consideration of Operator’s receipt of credit or debit card funded payments, and participation in programs affiliated with the Card Networks, Operator agrees to comply with Operating Regulations (defined below) as they pertain to payments Operator receives through the Cake Payments. In addition, if Operator meets certain requirements under the Operating Regulations or a Card Network or the Operating Regulations otherwise require, Operator may be required to enter into a direct relationship with an entity that is a member of the Card Networks. By agreeing to this Direct Services Agreement, Operator has fulfilled such requirement.
1. Certain Operator Responsibilities.
Operator agrees to comply, and to cause third parties acting as Operator’s agent (“Agents”) to comply, with the Card Network’s and other payment network’s by-laws, operating regulations and/or all other rules, policies and procedures, including but not limited to the Payment Card Industry Data Security Standard, the VISA Cardholder Information Security Program, the MasterCard Site Data Protection Program, and any other program or requirement that may be published and/or mandated by the Card Networks or payment networks (collectively “Operating Regulations”). Operator may review the VISA, MasterCard, and Discover websites for a copy of the Visa, MasterCard and Discover regulations. The websites are: http://usa.visa.com/merchants/ and http://www.mastercard.com/us/merchant/ and http://www.discovernetwork.com/merchants/. Operator also agrees to comply with all applicable state, federal, and local laws, rules, and regulations (“Laws”). Without limiting the foregoing, Operator agrees that it will fully comply with any and all anti-money laundering laws and regulations, including but not limited to the Bank Secrecy Act, the US Treasury’s Office of Foreign Assets Control (OFAC) and the Federal Trade Commission. For purposes of this section, Agents include, but are not limited to, Operator’s software providers and/or equipment providers.
If appropriately indicated in Operator’s agreement with Cake [i.e., Cake Payment Agreement], Operator may be a limited-acceptance merchant, which means that Operator has elected to accept only certain Visa and MasterCard card types (i.e., consumer credit, consumer debit, and commercial cards) and must display appropriate signage to indicate the same. Acquirer has no obligation other than those expressly provided under the Operating Regulations and applicable law as they may relate to limited acceptance. Operator, and not Acquirer, will be solely responsible for the implementation of its decision for limited acceptance, including but not limited to policing the card type(s) accepted at the point of sale.
Operator shall only complete sales transactions produced as the direct result of bona fide sales made by Operator 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 Operator, or for any purposes related to any illegal or prohibited activity, including but not limited to money-laundering or financing of terrorist activities. Operator is required to obtain an authorization through Cake Payments, in accordance with this Direct Services Agreement, for each Transaction. Acquirer reserves the right to not process any Transaction Data presented by Operator unless it includes a proper authorization.
Operator 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).
2. Operator Prohibitions.
Operator 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 Operator 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 Operator, (v) disburse funds in the form of cash unless Operator 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 Operator), or Operator is participating in a cash back service, (vi) submit any transaction receipt for a transaction that was previously charged back to the Acquirer and subsequently returned to Operator, irrespective of cardholder approval, (vii) accept a Visa consumer credit card or commercial Visa product issued by a U.S. issuer to collect or refinance an existing debt, (viii) accept a card to collect or refinance an existing debt that has been deemed uncollectable, or (ix) submit a transaction that represents collection of a dishonored check. Operator further agrees that, under no circumstance, will Operator store cardholder data in violation of the Laws or the Operating Regulations including but not limited to the storage of track-2 data. Neither Operator nor its Agent shall retain or store magnetic-stripe data subsequent to the authorization of a sales transaction.
Upon receipt of Operator’s sales data for card transactions, Acquirer will process Operator’s sales data to facilitate the funds transfer between the various Card Networks and Operator. After Acquirer receives credit for such sales data, subject to the terms set forth herein, Acquirer will fund Operator, either directly to the Operator-Owned Designated Account or through Cake to an account designated by Cake (“Cake Designated Account”), at Acquirer’s discretion, for such card transactions. Operator agrees that the deposit of funds to the Cake Designated Account shall discharge Acquirer of its settlement obligation to Operator, and that any dispute regarding the receipt or amount of settlement shall be between Cake and Operator. Acquirer will debit the Cake Designated Account for funds owed to Acquirer as a result of the Services provided hereunder, provided that Acquirer may also debit Operator’s designated demand deposit account (“Operator-Owned Designated Account”) upon receipt of such account information from Operator or Cake, or if Acquirer deposits settlement funds into the Operator-Owned Designated Account. Further, if a cardholder disputes a transaction, if a transaction is charged back for any reason, or if Acquirer reasonably believes a transaction is unauthorized or otherwise unacceptable, the amount of such transaction may be charged back and debited from Operator or Cake.
4. Term and Termination.
This Direct Services Agreement shall be binding upon Operator upon the date Operator agrees to it (by electronically indicating acceptance hereof or otherwise). The term of this Direct Services Agreement shall begin, and the terms of the Direct Services Agreement shall be deemed accepted and binding upon Acquirer, on the date Acquirer accepts this Direct Services Agreement by issuing a merchant identification number, and shall be coterminous with Cake’s agreement with Operator.
Notwithstanding the foregoing, Acquirer may immediately cease providing Services and/or terminate this Direct Services Agreement without notice if (i) Operator or Cake fails to pay any amount to Acquirer when due, (ii) in Acquirer’s opinion, provision of a service to Operator or Cake may be a violation of the Operating Regulations or any Laws, (iii) Acquirer believes that Operator has violated or is likely to violate the Operating Regulations or the Laws, (iv) Acquire determines Operator poses a financial or regulatory risk to Acquirer or a Card Network, (v) Acquirer’s agreement with Cake terminates, (vi) any Card Network deregisters Cake, (vii) Acquirer ceases to be a member of the Card Networks or fails to have the required licenses, or (viii) Acquirer is required to do so by any of the Card Networks.
5. Limits of Liability.
Operator agrees to provide Acquirer, via a communication with Cake, with written notice of any alleged breach by Acquirer of this Direct Services 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 Operator and a waiver of any and all rights to dispute such breach.
EXCEPT FOR THOSE EXPRESS WARRANTIES MADE IN THIS DIRECT SERVICES AGREEMENT, ACQUIRER DISCLAIMS ALL WARRANTIES, INCLUDING, WITHOUT LIMITATION, ANY EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. Operator’s sole and exclusive remedy for any and all claims against Acquirer arising out of or in any way related to the transactions contemplated herein shall be termination of this Direct Services Agreement. In the event that Operator has any claim arising in connection with the Services, rights, and/or obligations defined in this Direct Services Agreement, Operator shall proceed against Cake and not against Acquirer, unless otherwise specifically set forth in the Operating Regulations. In no event shall Acquirer have any liability to Operator with respect to this Direct Services Agreement or the Services. Operator acknowledges Acquirer is only providing this Direct Services Agreement to assist in Cake’s processing relationship with Operator, that Acquirer is not liable for any action or failure to act by Cake, and that Acquirer shall have no liability whatsoever in connection with any products or services provided to Operator by Cake. If Cake is unable to provide its services to Operator in connection with this Direct Services Agreement and Acquirer elects to provide those services directly, Operator acknowledges and agrees that the provisions of this Direct Services Agreement will no longer apply and the terms of Acquirer’s then current Bank Card Merchant Agreement, which would be provided to Operator, will govern Acquirer’s relationship with Operator. If Cake subsequently provides its services to Operator in connection with this Direct Services Agreement, Acquirer will cease to provide such services after receipt of notice from Cake and this Direct Services Agreement will govern Acquirer’s relationship with Operator.
This Direct Services Agreement is entered into, governed by, and construed pursuant to the laws of the State of Ohio without regard to conflicts of law provisions. This Direct Services Agreement may not be assigned by Operator without the prior written consent of Acquirer. This Direct Services Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors, transferees and assignees. This Direct Services Agreement is for the benefit of, and may be enforced only by, Acquirer and Operator and is not for the benefit of, and may not be enforced by, any other party. Acquirer may amend this Direct Services Agreement upon notice to Operator in accordance with Acquirer’s standard operating procedure. If any provision of this Direct Services 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 Direct Services Agreement will be construed as if such provision is not contained in the Direct Services Agreement. “Member Bank” as used in this Direct Services Agreement shall mean a member of VISA, MasterCard and/or Discover, as applicable, that provides sponsorship services in connection with this Direct Services Agreement. As of the commencement of this Direct Services Agreement, Member Bank shall be Fifth Third Bank, an
Ohio Banking Corporation, located in Cincinnati, OH 45263. The Member Bank is a party to this Direct Services Agreement. The Member Bank may be changed, and its rights and obligations assigned to another party by Acquirer at any time without notice to Operator.
“Transaction” is a transaction conducted between a customer and Operator utilizing a payment card in which consideration is exchanged between the customer and Operator.
“Transaction Data” is the written or electronic record of a Transaction, including but not limited to an authorization code or settlement record.
AMERICAN EXPRESS CARD ACCEPTANCE AND BRAND REQUIREMENTS
1. Defined Terms.
As used in this Exhibit B, the following capitalized terms have the following respective meanings:
* “Cardmember” means an individual or entity that has entered into an agreement establishing an American Express Card account, or whose name appears on the American Express Card.
* “Cardmember Information” means any information about Cardmembers and transactions, including, but not limited to, transaction data, and Cardmember name, addresses, American Express Card numbers, and American Express Card Identification Numbers.
* “Establishments” means any or all of your and your affiliates’ locations, outlets, websites, online networks, and all other methods for selling goods and services including methods that you adopt in the future.
* “Marks” means names, logos service marks, trademarks, trade names, taglines, or other proprietary designs or designations.
* “Other Payment Products” means any charge, credit, debit, stored value, prepaid, or smart cards, account access devices, or other payment cards, services, or products other than the American Express Card.
2. American Express Card Acceptance.
Operator must accept the American Express Card as payment for goods and services sold, or (if applicable) for charitable contributions made, at all of Operator’s Establishments, except as expressly permitted by state statute. Operator is jointly and severally liable for the obligations of Operator Establishments under this Agreement.
3. Treatment of the American Express Brand.
Except as expressly permitted by applicable law, Operator must not:
* indicate or imply that Operator prefers, directly or indirectly, any Other Payment Products over the American Express Card,
* try to dissuade Cardmembers from using the American Express Card,
* criticize or mischaracterize the American Express Card or any American Express services or programs,
* try to persuade or prompt Cardmembers to use any Other Payment Products or any other method of payment (e.g., payment by check),
* impose any restrictions, conditions, disadvantages or fees when the American Express Card is accepted that are not imposed equally on all Other Payment Products, except for electronic funds transfer, or cash and check,
* suggest or require Cardmembers to waive their right to dispute any transaction,
* engage in activities that harm our business or the American Express brand (or both),
* promote any Other Payment Products (except Operator’s own private label card that Operator issues for use solely at Operator’s Establishments) more actively than Operator promotes the American Express Card, or
* convert the currency of the original sale transaction to another currency when requesting authorization or submitting transactions (or both).
4. Treatment of the American Express Brand (US).
Operator may offer discounts or in-kind incentives from Operator’s regular prices for payments in cash, ACH funds transfer, check, debit card or credit/charge card, provided that (to the extent required by applicable law): (i) Operator clearly and conspicuously discloses the terms of the discount or in-kind incentive to Operator’s customers, (ii) the discount or in-kind incentive is offered to all of Operator’s prospective customers, and (iii) the discount or in-kind incentive does not differentiate on the basis of the issuer or, except as expressly permitted by applicable state statute, Card Network. The offering of discounts or in-kind incentives in compliance with the terms of this paragraph will not constitute a violation of the provisions set forth above in the paragraph titled, “Treatment of the American Express Brand”.
5. Treatment of the American Express Marks.
Whenever payment methods are communicated to customers, or when customers ask what payments are accepted, Operator must indicate Operator’s acceptance of the American Express Card and display the American Express Marks as prominently and in the same manner as any Other Payment Products. Operator must not use the American Express Marks in any way that injures or diminishes the goodwill associated with the Mark, nor in any way (without the prior written consent of American Express) indicate that American Express endorses Operator’s goods or services. Operator shall only use the American Express Marks as permitted by the Agreement and shall cease using the American Express Marks upon termination of the Agreement.
6. Treatment of American Express Cardmember Information.
Any and all Cardmember Information is confidential and the sole property of the American Express Card issuer, American Express or its affiliates. Except as otherwise specified, Operator must not disclose Cardmember Information, nor use nor store it, other than to facilitate transactions at Operator’s Establishments in accordance with the Agreement.
7. Arbitration (as to Disputes involving American Express) (U.S.).
In the event that Operator or Cake is not able to resolve an “AMEX Claim” (as defined below) against American Express, or a claim against Cake or any other entity that American Express has a right to join, this Section explains how AMEX Claims may be resolved through arbitration. Operator or American Express may elect to resolve any AMEX Claim by binding individual arbitration. AMEX Claims will be decided by a neutral arbitrator. If arbitration is elected by any party, neither Operator nor Cake nor American Express will have the right to litigate or have a jury trial on that AMEX Claim in court. Further, Operator, Cake, and American Express will not have the right to participate in a class action or in a representative capacity or in a group of persons alleged to be similarly situated pertaining to any AMEX Claim subject to arbitration under this Arbitration Agreement. Arbitration procedures are generally simpler than the rules in court. An arbitrator’s decisions are final and binding, and the arbitrator’s final decision on an AMEX Claim generally is enforceable as a court order with very limited review by a court. Other rights Operator, Cake, or American Express would have in court may also not be available in arbitration.
a. Initiation of Arbitration. AMEX Claims may be referred to either JAMS or AAA, as selected by the party electing arbitration. AMEX Claims will be resolved pursuant to this Arbitration Agreement and the selected organization’s rules in effect when the AMEX Claim is filed, except where those rules conflict with this Arbitration Agreement. Contact JAMS or AAA to begin an arbitration or for other information. AMEX Claims may be referred to another arbitration organization if all parties agree in writing, if American Express selects the organization and Operator selects the other within 30 days thereafter or if an arbitrator is appointed pursuant to section 5 of the Federal Arbitration Act, 9 U.S.C. 1-16 (FAA). Any arbitration hearing will take place in the federal judicial district where Operator’s headquarters is located or New York, NY, at Operator’s election.
b. Limitations on Arbitration. If any party elects to resolve an AMEX Claim by arbitration, that AMEX Claim will be arbitrated on an individual basis. No AMEX Claim is to be arbitrated on a class or purported representative basis or on behalf of the general public or other persons allegedly similarly situated. An arbitration award and any judgment confirming it will apply only to the specific case brought by Operator, Cake or American Express and cannot be used in any other case except to enforce the award as between Operator, Cake and American Express. This prohibition is intended to, and does, preclude Operator from participating in any action by any trade association or other organization against American Express. Notwithstanding any other provision in this Arbitration Agreement, if any portion of these Limitations on Arbitration is found invalid or unenforceable, then the entire Arbitration Agreement (other than this sentence) will not apply, except that Operator, Cake, and American Express do not waive the right to appeal that decision.
c. Previously Filed Claims/No Waiver. Operator, Cake, or American Express may elect to arbitrate any AMEX Claim that has been filed in court at any time before trial has begun or final judgment has been
entered on the AMEX Claim. Operator, Cake, or American Express may choose to delay enforcing or to not exercise rights under this Arbitration Agreement, including the right to elect to arbitrate a claim, without waiving the right to exercise or enforce those rights on any other occasion. For the avoidance of any confusion, and not to limit its scope, this section applies to any class-action lawsuit relating to the “Honor All Cards,” “non-discrimination,” or “no steering” provisions of the American Express Operator Regulations, or any similar provisions of any prior American Express Card acceptance agreement, that was filed against American Express prior to the Effective Date of the Arbitration Agreement to the extent that such claims are not already subject to arbitration pursuant to a prior agreement between Operator and American Express.
d. Arbitrator’s Authority. The arbitrator will have the power and authority to award any relief that would have been available in court and that is authorized under this Arbitration Agreement. The arbitrator has no power or authority to alter the Agreement or any of its separate provisions, including this Arbitration Agreement.
e. Split Proceedings for Equitable Relief. Operator, Cake, or American Express may seek equitable relief in aid of arbitration prior to arbitration on the merits if necessary to preserve the status quo pending completion of the arbitration. This section shall be enforced by any court of competent jurisdiction, and the party seeking enforcement is entitled to seek an award of reasonable attorneys’ fees and costs to be paid by the party against whom enforcement is ordered.
f. Small Claims. American Express will not elect arbitration for any AMEX Claim Operator properly files in a small claims court so long as the AMEX Claim seeks individual relief only and is pending only in that court.
g. Governing Law/Arbitration Procedures/Entry of Judgment. This Arbitration Agreement is made pursuant to a transaction involving interstate commerce and is governed by the FAA. The arbitrator shall apply New York law and applicable statutes of limitations and honor claims of privilege recognized by law. The arbitrator shall apply the rules of the arbitration organization selected, as applicable to matters relating to evidence and discovery, not federal or any state rules of procedure or evidence, provided that any party may ask the arbitrator to expand discovery by making a written request, to which the other parties will have 15 days to respond before the arbitrator rules on the request. If Operator’s AMEX Claim is for $10,000 or less, Operator may choose whether the arbitration will be conducted solely based on documents submitted to the arbitrator, through a telephonic hearing, or by an in-person hearing under the rules of the selected arbitration organization. At the timely request of a party, the arbitrator will provide a written opinion explaining his/her award. The arbitrator’s decision will be final and binding, except for any rights of appeal provided by the FAA. Judgment on an award rendered by the arbitrator may be entered in any state or federal court in the federal judicial district where Operator’s headquarters or Operator’s assets are located.
h. Confidentiality. The arbitration proceeding and all information submitted, relating to or presented in connection with or during the proceeding, shall be deemed confidential information not to be disclosed to any person not a party to the arbitration. All communications, whether written or oral, made in the course of or in connection with the AMEX Claim and its resolution, by or on behalf of any party or by the arbitrator or a mediator, including any arbitration award or judgment related thereto, are confidential and inadmissible for any purpose, including impeachment or estoppel, in any other litigation or proceeding; provided, however, that evidence shall not be rendered inadmissible or non-discoverable solely as a result of its use in the arbitration.
i. Costs of Arbitration Proceedings. Operator will be responsible for paying Operator’s share of any arbitration fees (including filing, administrative, hearing or other fees), but only up to the amount of the filing fees Operator would have incurred if Operator had brought a claim in court. American Express will be responsible for any additional arbitration fees. At Operator’s written request, American Express will consider in good faith making a temporary advance of Operator’s share of any arbitration fees, or paying for the reasonable fees of an expert appointed by the arbitrator for good cause.
j. Additional Arbitration Awards. If the arbitrator rules in Operator’s favor against American Express for an amount greater than any final settlement offer American Express made before arbitration, the arbitrator’s award will include: (1) any money to which Operator is entitled as determined by the arbitrator, but in no case less than $5,000; and (2) any reasonable attorneys’ fees, costs and expert and other witness fees incurred by Operator.
k. Definitions. For purposes of this Section 7, “Arbitration Agreement (as to AMEX Claims involving American Express) (U.S.)” only, (i) American Express includes its affiliates, licensees, predecessors, successors, or assigns, any purchasers of any receivables, and all agents, directors, and representatives of any of the foregoing, (ii) Operator includes Operator’s affiliates, licensees, predecessors, successors, or assigns, any purchasers of any receivables and all agents, directors, and representatives of any of the foregoing, and (iii) AMEX Claim means any allegation of an entitlement to relief, whether damages, injunctive or any other form of relief, against American Express or against Cake or any other entity that American Express has the right to join, including, a transaction using an American Express product or network or regarding an American Express policy or procedure.
Good Business Practices That Will Help Reduce Your Processing Costs
· Use an imprinted sales ticket with signature for all “key entered” transactions. This will assist you with issues such as chargebacks.
· Close and settle your sales transactions daily. This will help reduce those instances where “Mid-Qualified” or “Non-Qualified” discount rates are assessed.
· Balance your merchant account, processing statements, and your sales slips to assure that you are receiving anticipated funds in a timely fashion, as more fully described below. Because of the number of parties involved in the processing of credit card and other electronic transactions, the only way to ensure that you receive all funds is by balancing each day’s sales tickets against daily ACH deposits.
· Respond within the acceptable time frame to retrievals and/or chargebacks in order to assure the most favorable outcome possible.
· Do not call the voice authorization center for services other than authorization.
· Settle disputes with your customers before they reach “chargeback” status. A chargeback is like a returned check, it is expensive and time consuming.
· Read your Operator processing agreement (Cake Payment Facilitator Agreement) and these Bank Rules closely and thoroughly.
· Shipping products overseas without a card present should be closely monitored. A merchant has little ability to prevent a chargeback in this type of situation.
· You should carefully reconcile sales tickets against deposits daily, particularly in the following situations: installation of new equipment, new downloads, adding new products to your terminal, power outages, change in your merchant account.
Cards shall mean Card Network cards, account numbers assigned to a Cardholder or other forms of payment accepted by Cake and its Bank Partners.
Cardholder shall mean any person authorized to use a Card or the accounts established in connection with a Card.
Cake shall mean Cake Corporation.
Member Bank shall mean a member of VISA, MasterCard and/or other Card Networks, as applicable, that provides sponsorship services in connection with the Cake Payfac Agreement. As of the commencement of the Payfac Agreement with Cake, the Member Bank shall be Fifth Third Bank, an Ohio banking corporation.
Processor shall mean Vantiv, LLC.
1. Honoring Cards
A. You shall honor all Cards when presented in accordance with these Rules for the purchase of goods or services or in processing a request for credit resulting from such a transaction, by an authorized holder of a Card without imposing any special conditions not required by any Rules. However, if you do not deal with the public at large (for example, if your business is a private club), you are required to honor a valid Card only if presented by a cardholder who has purchasing privileges or a membership with you. You may attempt to steer customers who initially present a Card to an alternative method of payment, such as by providing discounts for cash, but you may not do so in a confusing manner that denies consumer choice. You may also consider whether present circumstances create undue risk, for example if the sale involves high-value electronics, but the card signature panel is not signed, and the Cardholder does not have any other identification.
B. Cardholder Identification. You will identify the Cardholder and check the expiration date and signature on each Card. You will not honor any Card if: (i) the Card has expired; (ii) the signature on the sales draft does not correspond with the signature on the Card; or (iii) the account number embossed on the Card does not match the account number on the Card’s magnetic stripe (as printed in electronic form) or the account number is listed on a current Electronic Warning Bulletin file. Unless permitted under the all applicable state, federal, and local laws, rules, and regulations (“Laws”) and these Rules, you will not require a Cardholder to provide personal information, such as a home or business telephone number, a home or business address, or a driver’s license number, as a condition for honoring a Card.
C. Responsibility for Transactions. Merchant is responsible for ensuring that the Cardholder understands that the Merchant is responsible for the transaction, including goods or services that are the subject of the transaction, and for related customer service, dispute resolution, and performance of the terms and conditions of the transaction. A Merchant must prominently and unequivocally inform the Cardholder of the identity of the Merchant at all points of interaction so that the Cardholder readily can distinguish the Merchant from any other party such as a supplier of goods or services to the Merchant.
D. Card Recovery. You will use your reasonable, best efforts to recover any Card: (i) on Visa Cards, if the printed four digits above the embossed account number do not match the first four digits of the embossed account number; (ii) if you are advised by Cake or Member Bank (or its designee), the issuer of the Card or the designated voice authorization center to retain it; (iii) if you have reasonable grounds to believe the Card is counterfeit, fraudulent or stolen, or not authorized by the Cardholder; or (iv) for MasterCard Cards, the embossed account number, indent printed account number and/or encoded account number do not agree, or the Card does not have a MasterCard hologram on the lower right corner of the Card face. This obligation upon you in no way authorizes a breach of the peace or any injury to persons or property, and you will hold Cake, Processor and Member Bank harmless from any claim arising from any injury to person or property or other breach of peace.
E. Return Policy. You will properly disclose to the Cardholder, at the time of the transaction and in accordance with the Rules, any limitation you have on accepting returned merchandise.
F. No Claim Against Cardholder. You will not have any claim against, or right to receive payment from a Cardholder unless Cake, Member Bank or Processor refuses to accept the sales draft or revokes its prior acceptance of the sales draft (after receipt of a chargeback or otherwise). You will not accept any payments from a Cardholder relating to previous charges for merchandise or services included in a sales draft, and if you receive such payment, you will promptly remit them to Member Bank. You may not reimburse a Cardholder in cash or check for any transaction.
G. Disputes With Cardholders. You must ensure that the Cardholder understands that you are responsible for the transaction, for any related customer service, dispute resolution, and performance of the terms and conditions of the transaction. All disputes between you and any Cardholder relating to any transaction will be settled between you and the Cardholder. Neither Cake nor Processor nor Member Bank bears any responsibility for such transactions. You shall not require a Cardholder to waive his or her rights to dispute the transaction as a condition of the sale.
H. Employee Actions. You are responsible for your employees’ actions while in your employ.
I. Prohibitions on Card Acceptance. You may not do any of the following: (i) submit for payment into interchange any transaction that is illegal or that you should have known was illegal; (ii) require a Cardholder to complete a postcard or similar device that includes the Cardholder’s account number, expiration, signature or any other account-related data in plain view when mailed; (iii) add any tax to a transaction, unless applicable law expressly requires you to impose a tax, and in such event the tax amount must be included in the transaction amount and not collected separately; (iv) request or use an account number for any purpose other than as payment for goods or services, except as permitted by the Bank Rules; (v) disburse funds in the form of travelers checks, if the sole purpose is to allow cardholder to make a cash purchase of goods or services from you, (vi) permit a Cardholder to purchase travelers checks, or other similar item, if the sole purpose is to allow the Cardholder to make a cash purchase of goods or services from Merchant; (vii) accept a Card to collect or refinance an existing debt that has been deemed uncollectible; (viii) enter into interchange a transaction that represents collection of a dishonored check; (ix) require a Cardholder to waive his/her rights to dispute a transaction as a condition of sale; (x) accept Cardholder payments for previous Card charges incurred at the Merchant location; (xi) submit for payment into interchange any transaction that may in the sole discretion of a Card Network, damage the goodwill of such Card Network or reflect negatively on a Card Network’s brands; (xii) add any surcharge to a transaction; (xiii) enter into interchange any transaction receipt for a transaction that was previously charged back to Cake or Member Bank and subsequently returned to you, irrespective of Cardholder approval (you may pursue payment from the customer outside of the Card Network system); (xiv) accept a Card for the purchase of Scrip; (xv) accept a Visa Electron Card or a Visa TravelMoney Card for manual cash disbursement; or (xvi) redeem a Visa Prepaid Card for cash. You may establish a minimum sale amount as a condition for honoring Cards, provided that the minimum transaction amount does not differentiate between Card Networks and/or issuers and the minimum transaction amount does not exceed $10.00 (or any higher amount established by applicable law or the Card Network Rules). Unless otherwise set forth below or otherwise allowed by applicable law or the Card Network Rules, you may not establish a maximum sale amount as a condition for honoring Cards. You may establish a maximum sale amount as a condition for honoring Cards if you are a department, agency or instrumentality of the U.S. Government, you are a corporation owned or controlled by the U.S. Government, or your primary business is reflected by one of the following MCCs: 8220 (Colleges, Universities, Professional Schools and Junior Colleges), 8244 (Schools, Business and Secretarial), or 8249 (Schools, Trade and Vocational), provided that the maximum transaction amount does not differentiate between Card Organizations and/or issuers.
J. Security Features. You are required to examine the Card security features prior to completing a sale. You should examine the Card to be sure there has been no tampering to the signature panel. Specific Card security features are as follows:
a. The “DOVE” hologram should appear to fly when tilted.
b. All Visa account numbers begin with a “4” and can be up to 19 digits long.
c. The first four digits of the embossed account number match the four digits printed on the account number of the Card.
d. The “V” to the right of the expiration date should be a special letter (a “Flying V” not a normal “V”).
a. The MasterCard Global hologram or the Debit MasterCard hologram and the MasterCard brand mark stacked within a retaining line, or the MasterCard brandmark without a retaining line if the hologram is on the back.
b. All MasterCard account numbers are 16 digits long.
c. The first four digits of the embossed account number match the four digits printed on the account number of the Card. The last four digits of the account number are embossed over the hologram.
iii. Discover Network: (certain valid devices (e.g., radio frequency enabled Cards, key fobs, contactless Cards, and JCB, CUP and DCI Cards) may not display the features described below).
a. Card numbers are at least 16 digits embossed on the front of the Card.
b. The word DISCOVER or DISCOVER NETWORK will appear in ultraviolet ink on the front of the Card when it is held under an ultraviolet light.
c. An overprint on the signature panel reads Discover Network.
d. The Discover Network three-dimensional hologram, bearing a distinct circular shape and images of a globe pierced by an arrow, water and stars on a repetitive pattern background (the “Discover Network Hologram”), appears on the front of certain Discover Network Cards. The hologram reflects light and appears to move as the Card is rotated.
When an Electronic Cash Register or Electronic Draft Capture terminal reads the magnetic stripe on the Card, you must check the Card account number on the terminal (if displayed) against the account number embossed on the Card or follow such other security check as is mandated by Cake or Processor from time to time. If the Card is read with a terminal that displays the Card number and the sales draft is printed, you shall verify that the account number displayed on the terminal and the printed card numbers on the sales draft match the embossed numbers on the face of the Card. In the event that they do not match, the sale must not be completed. Failure to follow these checks and procedures will expose you to chargebacks. If the terminal is programmed to require you to key the last 4 or more digits of each Card used for a sale, and the terminal indicates that the numbers keyed are not the same as those present on the Card, the sale must not be completed.
K. Advertising. You must display Visa, MasterCard, Discover Network and any other applicable Card issuer, Debit Network and EBT Network decals and program marks on promotional materials that Cake or Processor furnishes, including, if applicable, the JCB, CUP, DCI and/or Electron symbol, in equal prominence near the point-of-sale devices and as otherwise required by the Rules. Your use of the promotional materials of Visa, MasterCard, Discover Network or any other Card Network or state will not indicate, directly or indirectly, that Visa, MasterCard, Discover Network or any other Card Network or state endorse any goods or services other than their own and you may not refer to Visa, MasterCard, Discover Network or any other Card Network or state in stating eligibility for your products or services.
L. Acceptance Procedures. You may ask or incent your customers to use alternative forms of payment other than a Visa or MasterCard. Discounts can be offered on alternate card brands, card types or payment types. Card brand or payment method preference can be promoted, as well as the ability to inform your customers of the costs associated with accepting a particular card type or brand.
i. MasterCard Specific Requirements. You may request or encourage a customer to use a payment card with an acceptance brand other than MasterCard or other form of payment or a Card of a different product type (e.g., traditional cards, premium cards, rewards cards) than the Card the consumer initially presents. You may do so by methods that include, but are not limited to:
a. offering the customer an immediate discount from your list, stated, or standard price, a rebate, a free or discounted product or service, or any other incentive or benefit if the customer uses a particular payment card with an acceptance brand other than MasterCard or other particular form of payment;
b. offering the customer an immediate discount from your list, stated, or standard price, a rebate, a free or discounted product or service, or any other incentive or benefit if the customer, who initially presents a MasterCard, uses instead another payment card or another form of payment;
c. expressing a preference for the use of a particular payment card or form of payment;
d. promoting the use of a particular general purpose payment card with an acceptance brand other than MasterCard or the use of a particular form or forms of payment through posted information, through the size, prominence, or sequencing of payment choices, or through other communications to customers (provided that merchants will abide by the MasterCard trademark standards relating to the display of its marks); or
e. communicating to customers the reasonably estimated or actual costs incurred by you when a customer uses particular payment cards or forms of payment or the relative costs of using different general purpose payment cards or forms of payment.
You are free to engage in the POS practices that are described above, or any other substantially equivalent practices.
ii. Visa Specific Requirements. You may steer customers to use a particular network brand, such as Visa or MasterCard; to a type of payment card, such as a “non-reward” credit card; or to another preferred form of payment. You may also encourage a customer who initially presents a Visa card to use a payment card with a different network brand, a different type of payment card, or a different form of payment. You may engage in any of the following steering activities:
a. offering a customer a discount or rebate, including an immediate discount or rebate at the point of sale;
b. offering a free or discounted product;
c. offering a free or discounted or enhanced service;
d. offering the customer an incentive, encouragement or benefit;
e. expressing a preference for the use of a particular brand or type of general purpose card or a particular form of payment;
f. promoting a particular brand or type of general purpose card or a particular form or forms of payment through posted information, through the size, prominence or sequencing of payment choices, or through other communications to a customer;
g. communicating to a customer the reasonably estimated or actual costs incurred by the merchant when a customer uses a particular brand or type of general purpose card or a particular form of payment or the relative costs of using different brands or types of general purpose cards or different forms of payment; or
h. engaging in any other practices substantially equivalent to these.
You are not required to display the Visa mark in a size as large as other payment marks. You may promote acceptance brands other than Visa through the size, prominence, or sequencing of payment choices. However, you must continue to respect a cardholder’s ultimate decision to pay with Visa: you still have an obligation to accept for payment properly presented Visa cards, including rewards cards. In addition, surcharging of Visa cards and steering among Visa cards based on the issuing bank are not permitted and you must ensure that your steering practices are not performed in a confusing manner.
iii. American Express Specific Requirements. If you accept American Express cards, you must comply with the American Express rules regarding card acceptance. You should review your agreement with American Express for further details on the requirements for American Express card acceptance.
A. Required on all Transactions. You will obtain a prior authorization via electronic terminal or similar device before completing any transaction, including MO/TO transactions. You will follow any instructions received during such authorization process. Upon receipt of authorization, you may consummate only the transaction authorized and must note on the sales draft the authorization number. Where authorization is obtained, you will be deemed to warrant the true identity of the customer as the Cardholder. If you receive a negative authorization response, you may not complete the sale and may be requested to recover the Card, if you can do so by reasonable and peaceful means. If you do recover the Card, you should notify the voice authorization center and ask for further instructions. Transactions will be deemed invalid on Cards that are expired, whether or not an authorization has been obtained. For electronic commerce transactions, you must attempt to obtain the Card expiration date and forward it as part of the authorization request. You may not, after receiving a negative response or decline on an authorization request, split the sale amount into multiple transactions in order to obtain a valid authorization for each one so that the separate transactions total the original dollar amount of the sale.
B. Effect. Authorizations are not a guarantee of acceptance or payment of the Card transaction and will not waive any provision of the Cake Payfac Agreement or otherwise validate a Fraudulent Transaction or a transaction involving the use of an expired Card. Obtaining an authorization will not assure payment to you for a Card transaction. The fact that an authorization is obtained by you will not affect Cake’s, Processor’s or Member Bank’s right thereafter to revoke the authorization of a Card transaction or to charge back the transaction to you. In no event will the fact that an authorization is obtained by you be deemed to be Cake’s, Processor’s or Member Bank’s representation or warranty, either express or implied, that the particular Card transaction is in fact a valid, authorized or undisputed transaction entered into by the Cardholder.
C. Unreadable Magnetic Stripes. If you authorize and present Card transactions electronically and your terminal is unable to read the magnetic stripe on the Card, you will obtain an imprint of the Card and the Cardholder’s signature on the imprinted draft before presenting the sales draft to Member Bank, Cake and Processor for processing.
D. Procedures. If an unsigned Card is presented at the point of sale, you must request that Cardholder provide proof of identification and sign the card before completing the sale. Details of the identification provided must be placed on the sales draft unless prohibited by local law. If the Cardholder refuses to do so, the sale must not be completed. In any of the following cases, you shall obtain authorization from the voice authorization center, designated or approved by Cake, Processor or Member Bank, before completing a sales transaction:
i. paper merchants whose sales exceed your floor limit as established by Cake, Processor or Member Bank, or amended from time to time;
ii. an unsigned Card is presented;
iii. if you believe the Card may be counterfeit or stolen or that the sale is in some other manner suspicious or unusual, you should state to the voice authorization clerk, “This is a Code 10” and await further instruction; or
iv. in any other circumstances established by Cake, Processor or Member Bank or stated in the Rules and/or the Cake Payfac Agreement.
E. If you are approved to utilize batch authorization by Cake and Processor, you may obtain batch authorization for certain sales after such sales have occurred provided, however, that authorization for each transaction is obtained by end of the calendar day upon which such sale was initiated and that you do not presort the batch by account number or BIN. Further, you explicitly agree that you will be responsible for any fines, fees, chargebacks, assessments, and declined or disputed transactions that may result from using a batch authorization process.
3. Sales Drafts.
A. Forms. You will use a sales draft to document each Card transaction. Each sales draft will be legibly imprinted with: (i) Merchant’s name, identification number, and city and state; (ii) the information embossed on the Card presented by the Cardholder (either electronically or manually); (iii) the date of the transaction (iv) a brief description of the goods or services involved; (v) the transaction authorization number; (vi) the total amount of the sale (including any applicable taxes) or credit transaction; and (vii) adjacent to the signature line, a notation that all sales are final, if applicable. If you use an electronic terminal to print sales drafts, the account number must be truncated on the cardholder copy of the sales draft. This means that only the last 4 digits of the account number may appear. The entire expiration date must be suppressed on receipts provided to cardholders.
B. Signatures. Sales drafts must be signed by the Cardholder. The requirement for the Cardholder’s signature on the sales draft will only be waived if the Card transaction is a valid MO/TO or electronic commerce card transaction, which fully complies with the requirements set forth in the Cake Payfac Agreement, or if otherwise permitted by the Rules.
C. Delivery and Retention of Sales Drafts. You will deliver a complete and legible copy of the sales draft or credit voucher to the Cardholder at the time of the transaction. You shall store all sales drafts and transaction records in a limited access area for at least 1 year after the date of sales. You will retain the Merchant copy of the sales draft or credit memorandum for at least 12 months following the date of completion of the transaction for Visa Card transactions, at least 18 months following the date of completion of the transaction for MasterCard Card transactions and at least 3 years following the date of completion of the transaction for Discover Network Card transactions (or such longer period as the Rules may require), which documentation must be maintained in a secure manner in accordance with your obligations under the Cake Payfac Agreement. You will submit to Cake or Processor or Member Bank a legible copy of a sales draft if any Card issuer requests such retrieval. Your deadline for providing Cake or Processor or Member Bank a legible copy of the requested sales draft will be ten (10) days after the date of the Card issuer’s retrieval request, as specified in the notice from Cake or Processor or Member Bank. Unless specifically permitted by Processor, goods and services purchased must be delivered to Cardholder at the time of sale. You shall not disclose a Cardholder’s account information or any other personal information to third parties other than your agents for the purpose of completing the transaction or as specifically required by the Laws or by the Card Network Rules.
D. Electronic Transmission. If you utilize electronic authorization and/or data capture services, you will enter the data related to a sales or credit transaction into a computer terminal or magnetic stripe reading terminal no later than the close of business on the date the transaction is completed. If you provide your own electronic terminal or similar device, such terminals must meet Cake and Processor’s requirements for processing transactions. Information regarding a sales or credit transaction transmitted with a computer or magnetic stripe reading terminal will be transmitted by you to Cake or Processor or its agent in the form Cake or Processor from time to time specifies or as required under the Laws or Rules. If Cake or Member Bank or Processor requests a copy of a sales draft, credit voucher, or other transaction evidence, you will provide it within 3 business days following the request. If your terminal cannot successfully read the magnetic stripe, you must imprint the Card, even if it is a key entered transaction. You must imprint the Card on the same sales draft containing the remainder of the transaction information and the Cardholder signature. Failure to obtain a signed and imprinted sales draft when a transaction is not captured by swiping through a magnetic stripe reader will expose you to a chargeback regardless of the authorization that may or may not be received. Failure to read the magnetic stripe on the Card may result in a discount rate tier downgrade.
E. Daily Settlement of Transactions. You must Batch Out each POS terminal every day. Failure to Batch Out daily will delay the deposit of funds. “Batch Out” is the process by which you total and settle all transactions, on each POS terminal, which occurred before midnight (12:00 a.m.) and transmit the information to Cake or Processor. In all cases, Merchant must present the record within 3 business days (2 business days for Electron Cards) after the transaction date, unless otherwise permitted by the Rules. Transactions contained in an untimely Batch Out may be refused, held for a 180 day period, become subject to chargeback or be transferred to a Reserve Account and held in accordance with the terms of the Cake Payfac Agreement. Merchant is responsible for resubmitting a Batch Out or ticket if the POS terminal fails to properly Batch Out or if sales ticket data does not process through the normal payment cycle. Neither Cake nor Processor is liable to Merchant for amounts not collected, including but not limited to amounts collected by Third Party Service Providers.
Failure to comply with the Rules will reduce Cake or Processor or Member Bank’s ability to reverse chargebacks and increase the likelihood of your receiving a chargeback. You may be subject to a chargeback on sales for a minimum period of 180 days from the date the sale was entered into the Card Network’s processing system. Cake’s Processor may hold funds from your account to cover any chargebacks for the later of 270 days following the effective date of termination of the Cake Payfac Agreement or 180 days from the date of your last chargeback. Cake, Processor or Member Bank will mail all chargeback documentation to the address provided by you. You agree to respond promptly to all chargebacks. If Cake or Processor or Member Bank elects, at its discretion, to take action on chargebacks after the Card Network time limits have expired, such action shall be done at additional cost. You will not redeposit sales that have been previously charged back and not represented. This restriction applies whether or not the Cardholder consents to such activity. If you receive a chargeback for an international Cardholder, you are responsible for any currency conversion differences in the dollar amount. You will be charged the fee indicated on the Merchant Application for each chargeback.
5. Chargeback Reasons.
A. Summary. The summary of reasons for chargebacks include, but are not limited to, any one of the following:
i. an invalid Card account number submitted by you;
ii. neither the Cardholder nor a person authorized by the Cardholder received the goods or services requested;
iii. the Cardholder received the good or services but disputes the quality;
iv. the Cardholder never received credit for a returned item or a canceled order;
v. the Cardholder was charged incorrectly;
vi. the amount of the sale exceeded the floor limit and an authorization was not obtained or was denied;
vii. the sale was authorized but not for the correct amount;
viii. the authorization code provided is invalid;
ix. the Card was expired at the time of the sale or had not reached its effective date;
x. the sales draft was not signed. An exception will be made where MO/TO sales are permitted by Cake or Processor;
xi. the Card issuer has information that a Merchant fraud has occurred;
xii. the Card account number and the amount of sale is missing from sales draft or is illegible;
xiii. the sales draft bears the imprint of a Card which to the Card Networks is a counterfeit Card because the Card is not embossed in accordance with the standards set forth in the Rules, even if the sale was authorized.
6. Chargeback Monitoring Programs.
A. If you exceed a 1% chargeback to interchange ratio for all incoming chargebacks for a particular location you are considered an excessive chargeback merchant and may be subject to a
Card Network’s monitoring programs. You are responsible for monitoring your monthly chargeback percentage and developing chargeback reduction plans as required by the Card Networks. Excessive chargeback activity for an unreasonable period of time may result in termination of the Cake Payfac Agreement. You must pay Cake or Member Bank or Processor for any fine or charge levied by the Card Networks on Cake, Member Bank, Processor or Merchant as a result of your chargeback activity. This section may be amended from time to time as a result of action by the Card Networks.
B. Other Monitoring Programs. If you are identified by certain Card Network monitoring programs, Cake, Processor or Member Bank’s ability to reverse chargebacks may be severely restricted. Certain monitoring programs review the number of lost, stolen and counterfeit Cards accepted by you in the normal course of business and the percentage of Cards used for sales that were not read electronically by terminals or Electronic Cash Registers. The purpose of these programs is to reduce the use of lost, stolen, fraudulent, and counterfeit Cards. In the event that you are identified under these programs as exceeding the acceptable threshold value of such Cards, you may become liable for chargebacks and sales on lost, stolen, or counterfeit Cards regardless of the Card acceptance procedures followed, and the Cake Payfac Agreement may be terminated by Cake, Processor or Member Bank and/or Cake, Processor or Member Bank may immediately cease providing services to Merchant without notice.
C. Excessive Activity. Your presentation to Cake or Processor of Excessive Activity will be a breach of the Cake Payfac Agreement and cause for immediate termination. “Excessive Activity” means, during any monthly period, and for any one of Merchant’s terminal identification numbers or Merchant Identification Numbers, chargebacks and/or retrieval requests in excess of 1% of the average monthly dollar amount of your Card transactions or returns in excess of 3% of the average monthly dollar amount of sales drafts. You authorize, upon the occurrence of Excessive Activity, Cake, Member Bank and Processor to take additional actions as either of them may deem necessary, including but not limited to suspension of processing privileges or creation or maintenance of a Reserve in accordance with the Cake Payfac Agreement.
A. Credit Memoranda. You will issue a credit memorandum, instead of making a cash advance, a disbursement or a cash refund on any Card transaction. Member Bank will debit the Merchant Account for the total face amount of each credit memorandum submitted to Cake or Processor. You will not submit a credit relating to any sales draft not originally submitted to Cake or Processor, nor will you submit a credit that exceeds the amount of the original sales draft. You will, within the time period specified by applicable law, provide Cake or Processor with a credit memorandum or credit statement for every return of goods or forgiveness of debt for services which were the subject of a Card transaction.
B. Revocation of Credit. Cake, Member Bank or Processor may refuse to accept any sales draft or revoke its prior acceptance of a sales draft in the following circumstances: (i) the transaction giving rise to the sales draft was not made in compliance with the Cake Payfac Agreement, the Laws and the Rules; (ii) the Cardholder disputes his/her liability to Member Bank for any reason, including but not limited to those chargeback rights enumerated in the Rules; or (iii) the transaction giving rise to the sales draft was not directly between you and the Cardholder. You will pay Cake, Member Bank or Processor, as appropriate, any amount previously credited to you for a sales draft not accepted by Cake, Member Bank or Processor or, where accepted, is subsequently revoked.
C. Returns. If you agree to credit a Cardholder for any merchandise or service that was the subject of a sale, you must provide a Credit Transaction Receipt using the same Card as in the original sale. Such credit shall not exceed the original sale amount. You shall not make any cash refund on sales. You may limit the acceptance of returned merchandise or establish a policy to make price adjustments for any sale provided proper disclosure is made and purchased goods and services are delivered to the Cardholder at the time of the sale. Proper disclosure means the words “NO REFUND,” “EXCHANGE ONLY,” or “IN STORE CREDIT ONLY” are printed in large letters near the signature line on all copies of the sales draft prior to obtaining the Cardholder’s signature on the sales draft. You may stipulate other special circumstances or terms of the sale on the sales draft. For each credit transaction, you must be able to provide Cake, Processor or Member Bank with evidence of the original purchase.
D. Fraud and Factoring. You agree that, except as otherwise contemplated herein or otherwise permitted by Cake or Processor, you will use the services provided by Cake or Processor only for your own internal and proper business purposes and will not resell, directly or indirectly, any of the services or any portion thereof to any third party. You must deposit only transactions that directly result from Cardholder transactions at your merchant locations. You must not deposit transactions resulting from any transaction involving a Card between a Cardholder and another entity (with the exception of Payment Service Providers (PSPs or Payment Facilitators), who may deposit transactions resulting from a transaction between a Cardholder and a Sponsored Merchant of the PSP). You will not present for processing or credit, directly or indirectly, any transaction not originated as a result of a Card transaction directly between you and a Cardholder or any transaction you know or should know to be fraudulent or not authorized by the Cardholder. Perpetrators of Fraudulent Transactions will be referred to law enforcement officials. You will not sell or disclose to third parties Card account information other than in the course of performing your obligations under the Cake Payfac Agreement. You will not deposit any sales draft representing the refinancing of an existing obligation of a Cardholder. In addition to Cake’s, Processor’s and Member Bank’s ability to establish and maintain a Reserve, you agree that Processor may, within its sole discretion, suspend the disbursement of sales draft funds for any reasonable period of time required to investigate suspicious or unusual deposit activity. Upon completion of Cake’s or Processor’s investigation, Processor may transfer such sales draft funds into a Reserve. Cake, Processor and Member Bank will have no liability for any losses you may attribute to any suspension of funds disbursement. You further agree that engaging in the aforementioned activity may result in the incurrence of research fees and may be grounds for termination of the Cake Payfac Agreement.
8. Other Types of Transactions.
A. Mail Order and Telephone Order. You may not solicit or accept mail orders or telephone orders or any transaction in which the Cardholder and Card are not present (“MO/TO”) without prior written authorization from Cake or Processor. MO/TO transactions completed without prior written consent of Cake, Processor or Member Bank will be a breach of the Cake Payfac Agreement and cause for immediate termination in addition to any other remedies available under the Laws and the Rules. You may be required to use an address verification service (“AVS”) on MO/TO transactions and are encouraged to use AVS even if not required. AVS is not a guarantee of payment and the use of AVS will not waive any provision of the Cake Payfac Agreement or validate a Fraudulent Transaction. You will obtain the expiration date of the Card for a MO/TO transaction and submit the expiration date when obtaining authorization of the Card transaction. For MO/TO transactions, you will type or print legibly on the signature line of the sales draft the following applicable words or letters: mail order or “MO” or telephone order or “TO”. If you are specifically authorized by Cake, Processor or Member Bank to accept MO/TO sales, no sale shall be submitted for processing prior to the shipping of the product or the provision of services purchased by the Cardholder. If you supply goods and/or services under a preauthorization order, you shall not charge a Cardholder for goods after receiving notice from a Cardholder that the authorization for goods or services is canceled. The shipping documents indicating the address the goods were shipped to and a signature of an individual (even Cardholder) will not normally be sufficient to reverse an Unauthorized Purchaser reason code. You assume the risk associated with accepting MO/TO sales transactions.
B. Recurring/Quasi Cash Transactions. You may not accept transactions where the goods or services are performed periodically without Cake or Processor’s consent. If you receive such consent, you must obtain a written request from the Cardholder for such goods and services to be charged to the Cardholder’s account, the frequency of the recurring charge and the duration of time during which such charges may be made. You will not complete any recurring transaction after receiving: (i) a cancellation notice from the Cardholder, (ii) notice from Cake, Processor or Member Bank indicating that you may not accept such transaction, or (iii) a response that the Card is not to be honored. You must print legibly on the sales draft the words “Recurring Transaction”. You shall not accept sales for processing that are classified as “QuasiCash Transactions” including but not limited to the sale of casino gaming chips, money orders, opening deposits on financial or other accounts, wire transfer money orders, or the issuance of scrip. You shall not accept a Card or use a Visa and MasterCard processing terminal to issue script exchangeable for cash, products, or services as a result of a sale. You must not submit for payment into interchange any transaction that represents the refinancing or transfer of an existing Cardholder obligation that is deemed to be uncollectible, or that arises from the dishonor of a Cardholder’s personal check.
C. Multiple Sales Drafts. You will include a description and total amount of goods and services purchased in a single sales transaction on a single sales draft or transaction record, unless: (i) partial payment is entered on the sales draft or transaction record and the balance of the transaction amount is paid in cash or by check at the time of transaction, or (ii) a sales draft represents an advance deposit in a Card transaction completed in accordance with the Cake Payfac Agreement and the Rules. If the total amount of both sales drafts exceeds the floor limit, authorization must be obtained. The use of multiple Cards for one purchase is permissible as long as an individual sales draft is used for each Card. The use of multiple sales on one Card, for one purchase, is not permitted.
i. Prior Consent. You will not accept for payment by Card any amount representing a deposit or partial payment for goods or services to be delivered in the future without the prior written consent of Processor. The acceptance of a Card for payment or partial payment of goods or services to be delivered in the future without prior consent will be deemed to be a breach of the Cake Payfac Agreement and cause for immediate termination in addition to any other remedies available under the Laws or Rules.
ii. Acceptance. If you have obtained prior written consent, then you will complete such Card transactions in accordance with the Cake Payfac Agreement, the Rules, and the Laws. Cardholders must execute one sales draft upon making a deposit with a Card and a second sales draft upon paying the balance. You will note upon the sales draft the words “deposit” or “balance” as appropriate. You will not deposit the sales draft labeled “balance” until the goods have been delivered to Cardholder or you have fully performed the services.
E. Future Delivery. You will not present any sales draft or other memorandum to Member Bank or Cake or Processor for processing (whether by electronic means or otherwise) which relates to the sale of goods or services for future delivery without Cake or Processor’s prior written authorization. If Member Bank, Cake or Processor have previously given such consent, you represent and warrant to Member Bank, Cake and Processor that you will not rely on any proceeds or credit resulting from such transactions to purchase or furnish goods or services. You will maintain sufficient working capital to provide for the delivery of goods or services at the agreed upon future date independent of any credit or proceeds resulting from sales drafts or other memoranda taken in connection with future delivery transactions.
F. Electronic Commerce Transactions.
i. Electronic Commerce. You must obtain the consent of Cake or Processor to process electronic commerce (“EC”) transactions, and you may process such transactions only if the transactions comply with the Payment Card Industry Security Standard requirements set forth below. If you submit EC transactions without Cake or Processor’s consent, Cake or Processor may immediately terminate the Cake Payfac Agreement. You understand that transactions processed via EC are high risk and subject to a higher incidence of chargebacks. A Merchant must not refuse to complete an EC transaction using a MasterCard card solely because the Cardholder does not have a digital certificate or other secured protocol. You are liable for all chargebacks and losses related to EC transactions, whether or not: a) EC transactions have been encrypted; and/or b) you have obtained the consent of Cake or Processor to engage in such transactions. Encryption is not a guarantee of payment and will not waive any provision of the Cake Payfac Agreement or otherwise validate a Fraudulent Transaction. You are responsible for contracting with a third party payment engine, payment gateway or other Internet service provider. You must ensure that such third parties transmit sales drafts to Cake, Processor and Member Bank in an acceptable format and in compliance with the Rules, including but not limited to PCI DSS. All communication costs related to EC transactions are your responsibility. You understand that Cake or Processor will not manage the EC telecommunications link and that it is your responsibility to manage that link. All EC transactions will be settled by Member Bank into a depository institution of the United States in U.S. currency.
ii. Requirements. For goods to be shipped on EC transactions, you may obtain authorization up to 7 calendar days prior to the shipment date. You need not obtain a second authorization if the sales draft amount is within 15% of the authorized amount provided that the additional amount represents shipping costs. Further, your website must contain all of the following information: a)
complete description of the goods or services offered, b) returned merchandise and refund policy, c) customer service contact, including electronic mail address and/or telephone number, d) transaction currency (such as U.S. or Canadian dollars), e) export or legal restrictions, if known, and f) delivery policy. If you store Cardholder account numbers, expiration dates, and other personal Cardholder data in a database, you must follow Card Network guidelines on securing such data.
iii. Cardholder Information Security Program. If you accept EC transactions, you must: install and maintain a working network firewall to protect data accessible via the Internet, keep security patches up-to-date, encrypt stored data and data sent over open networks, use and update anti-virus software, restrict access to data by business “need-to-know”, assign a unique ID to each person with computer access to data, not use vendor-supplied defaults for system passwords and other security parameters, track access to data by unique ID, regularly test security systems and processes, maintain a policy that addressed information security for employees and contractors, and restrict physical access to Cardholder information.
iv. Physical Address. If you accept EC transactions, your website must include the physical address of your permanent establishment, along with your country of domicile, either:
• On the same screen view as the checkout screen used to present the total purchase amount, or
• Within the sequence of webpages the Cardholder accesses during the checkout process.
v. You acknowledge and agree that you will only submit Electronic Commerce Card transactions in U.S. Dollars that arise from a Cardholder’s purchase over the Internet. If software is to be purchased by you, you will be responsible for sublicensing fees and all other fees for software and the software program utilized by you that enables you to connect to and maintain communication between you, the Internet and Cake or Processor. You will, at all times, maintain in effect a sublicense agreement for any such software. You agree to use any such software and the software program properly and for the purposes for which it was intended.
G. Third Party Service Provider Transactions.
i. Authorization. Upon your request, Cake or Processor will provide access to authorization and/or data capture services for Third Party Service Provider transactions, such as American Express, and all settlement and chargeback obligations and similar financial responsibilities arising from your transactions involving Third Party Service Providers will be governed exclusively by your agreement with such Third Party Service Providers. You must enter into a separate agreement with such Third Party Service Providers and must abide by the terms and conditions of such Third Party Service Providers. Neither Cake nor Processor nor Member Bank are responsible for funding such transactions. The terms of the Cake Payfac Agreement will apply to Third Party Service Providers. Cake or Processor may notify you in writing of the fees applicable to Third Party Service Provider transactions. Third Party Service Providers separately invoice Merchants for their services, and their fees are not necessarily included in the Cake Payfac Agreement (including the Merchant Application). Any applicable fees and charges for third party services will be disclosed by the applicable Third Party Service Provider and may be subject to adjustment in accordance with the Third Party Service Provider’s terms and conditions. Additionally, Cake or Processor charges a transaction fee for such transactions in addition to those fees charged by Third Party Service Providers (see the merchant application). Your acceptance of cards, bearing the symbols of organizations other than the Debit Networks or the Card Organizations, such as American Express and transmission of such card transactions to Cake or Processor will constitute your agreement to the terms of the Cake Payfac Agreement with regard to such cards. Termination of the Cake Payments does not automatically terminate your agreement with Third Party Service Providers.
ii. Information. Cake, Processor and Member Bank reserve the right and you agree and consent to allow Cake, Processor and Member Bank to share your credit report and credit history with all Third Party Service Providers. Changes made to the Cake Payfac Agreement, such as address or ACH changes, do not automatically make the same changes for the Third Party Service Provider. You must contact the Third Party Service Provider to make the changes. Neither Cake nor Processor is liable or responsible for such changes. If false data is provided to Cake or Processor or the Merchant Account has had any suspected fraudulent activity, Cake and Processor reserve the right to share such false or suspected fraudulent information with other financial entities and processors.
iii. Statements. You must reconcile your sales tickets for each Third Party Service Provider’s transactions against deposits to your bank account daily. Each Third Party Service Provider provides its own statement, and you are responsible for reviewing each statement and resolving all issues regarding the transactions directly with that Third Party Service Provider. Each Third Party Service Provider sets its own rates and fees for its services, and may adjust such rates and fees in accordance with your agreement with such Third Party Service Provider. Cake, Processor and Member Bank are not liable or responsible for these transactions and have no legal access to such transactions.
iv. JCB. The following special provisions apply (notwithstanding any contrary provision in the Cake Payfac Agreement) to your JCB Card transactions: (i) you must retain original sales drafts and credit vouchers for at least 120 days after the transaction and must retain microfilm or legible copies of sales drafts and credit vouchers for at least three (3) years after the transaction; (ii) for purposes of your chargeback liability with respect to JCB Card transactions, an Authorization obtained on a transaction does not override any chargeback reason which may apply to the item; (iii) if you process JCB Card transaction data electronically, your account number must be included in the JCB Card transaction data transmitted to us, in addition to the other information required to be included on each sales draft or credit voucher; (iv) if you are a lodging merchant, JCB Cardholders must be allowed to cancel reservations at resort establishments until 4:00 p.m. on the scheduled arrival date; and (v) by contracting for JCB settlement services, you authorize JCB to publish your name, address and telephone number in JCB solicitation materials.
H. Age Restricted Products. If you are engaged in the sale of age restricted products such as alcoholic beverages, tobacco products, weapons and/or any other applicable age-restricted products or services, you must comply fully with all local, state and federal laws governing the distribution of age-related products. You certify herein that you will implement age verification procedures governing the sale of such products, including age verification of each customer against an official government records database before entering certain transactions into the credit card payment system. For face-to-face sales, you will require the signature of the Cardholder. To verify legal age, you will also require the Cardholder to present a valid, government-issued photo identification card in the same name and address as the Cardholder. For sales made via mail, telephone and/or the Internet, you will (1) only deliver age-restricted products to the name and address listed as belonging to the Cardholder, and (2) require, without exception, the signature of the Cardholder, as well as presentation of a valid, government-issued photo identification card in the same name and address as the card holder to verify legal age upon delivery of the merchandise. Failure to abide by all applicable age verification laws may result in fines and/or loss of credit card merchant charge privileges, as well as termination of your account with Cake, Processor and Member Bank.
9. Cash Transactions.
You shall not receive money from a Cardholder and subsequently prepare a credit voucher for the purpose of depositing to the Cardholder’s account. Cash disbursement by you to a Cardholder is not permitted. Additionally, you shall not make any cash advance to an employee, principal, or family member of Merchant, who is a Cardholder. You will not accept sales from Cardholders where the primary purpose of the transaction is for the provision of working capital to business and not the purchase of goods and/or services from the business.
10. Third Parties.
A. Services. You may be using special services or software provided by a third party to assist you in processing transactions, including authorizations and settlements, or accounting functions. You are responsible for ensuring compliance with the requirements of any third party in using their products. This includes making sure you have and comply with any software updates. You are also responsible for demonstrating compliance by your Merchant Suppliers and other Agents with the requirements of the Cardholder Information Security Program and other security requirements. Cake and Processor have no responsibility for any transaction until that point in time when Cake or Processor receives data about the transaction.
B. Use of Terminals Provided by Others. You will notify Cake immediately if you decide to use electronic authorization or data capture terminals or software provided by any entity other than Cake or Processor or its authorized designee (“third party terminals”) to process transactions. If you elect to use third party terminals, you agree (i) the third party providing the terminals will be your agent in the delivery of Card transactions to Member Bank via a data processing network; and (ii) to assume full responsibility and liability for any failure of that third party to comply with the Rules or the Cake Payfac Agreement. Neither Cake nor Member Bank nor Processor will be responsible for any losses or additional fees incurred by you as a result of any error by a third party agent or a malfunction in a third party terminal.
11. Vehicle Rental Authorization Procedures.
A. Estimate. A special authorization procedure is available if you estimate the transaction amount based upon Cardholder’s intended rental length at time of rental, the applicable rental rate, tax, and/or mileage rates. Such estimated transaction amount shall not include ancillary charges representing amounts to cover potential vehicle damages or insurance deductible when Cardholder waives insurance at time of rental.
B. Procedures. Special terminal downloads may be required in order to qualify for certain rates on Vehicle Rental transactions. You shall record on the sales draft the date, amount, and all authorization approvals obtained. You shall disclose to Cardholder the amount authorized at the time of rental. Subsequent Authorization:
i. If no authorization was obtained at the time of rental and you, based upon Cardholder’s actual charges, later estimate that the transaction amount will exceed the applicable floor limit, you may obtain an Authorization approval code for the new estimated amount.
ii. You may obtain authorization for additional amounts (above any amount not authorized) on the car rental pickup date or prior to the car rental return date. Additional authorization is not necessary if the sales transaction does not exceed the sum of the authorized amounts plus 15% of the sum of the authorized amounts.
12. Paper Processing Merchants.
Paper processing merchants shall authorize by using the established floor limits. Any Merchant that wishes to accept a sales transaction that is under the established floor limits, and that is not authorized, is liable for the resulting chargebacks from those Card numbers listed on the Electronic Exception File. In the case of a Merchant depositing paper drafts, such drafts shall be deposited with Cake, Processor or Member Bank within 5 days of the sale date.
13. Forensic Investigations.
A. You will fully cooperate with any forensic investigation initiated by a Card Network (including but not limited to any investigation that is ongoing at the time the Cake Payfac Agreement is signed) until such time as the investigation is completed.
14. T&E Services.
A. Travel and Entertainment (“T&E”) Merchants. A merchant whose primary function is to provide travel related services shall be referred to as a Travel & Entertainment (“T&E”) Merchant. These include, but are not limited to, car rental, lodging, and central reservation services. A T&E Merchant may process delayed or amended charges if the Cardholder has consented to be liable for those charges. These charges may NOT include charges for loss, theft, or damage.
B. Services. T&E Merchants may participate in any of the following Visa T&E Services:
· Priority CheckOut Service
· T&E Advance Deposit Service
· T&E Cash Disbursement Service
· Visa Reservation Service
C. Visa Priority CheckOut Service:
You agree to:
i. accept all Visa Cards in accordance with the Cake Payfac Agreement;
ii. have Cardholder complete, sign, and return a Priority CheckOut Agreement (“PCO Agreement”) which includes the Cardholder’s mailing address;
iii. complete a sales draft which includes the total sales amount and the words “Priority CheckOut” on the signature line;
iv. review the completed PCO Agreement and ensure the account number matches the account number on the sales draft if applicable;
v. comply with normal authorization and deposit requirements;
vi. at the Cardholder’s request, you must mail the sales draft copy, the itemized bill, and the signed PCO Agreement to the Cardholder within 3 business days of the Cardholder’s departure; and
vii. you must retain the itemized bill and signed PCO Agreement for a minimum of 6 months after the transaction date.
D. T&E Advance Deposit Service:
You agree to:
i. accept all Visa Cards in accordance with the Cake Payfac Agreement;
ii. obtain the Cardholder name, account number, expiration date on the Card, telephone number, mailing address, scheduled date of arrival/embarkation/rental, and intended length of stay/term/rental;
iii. determine the advance deposit amount, which is the cost of the intended length of stay, cost of the cruise, or cost of the intended term of rental, not to exceed 14 days;
iv. apply the deposit amount to the total obligation;
v. provide: (1) reservation confirmation code to the Cardholder advising that it be retained, (2) advance deposit amount, and (3) cancellation policy requirements;
vi. advise the Cardholder the accommodations will be held according to the reservation and provide written confirmation if requested;
vii. advise the Cardholder that you will retain the deposit amount if the Cardholder has not canceled the reservation within the specified time frames;
viii. you must not charge for a no show transaction;
ix. complete the sales draft including advance deposit amount, Cardholder name, mailing address, telephone number, account number, expiration date, the words “Advance Deposit” on the signature line, confirmation code, scheduled date of arrival/embarkation/rental, and the date and time the cancellation privileges, if any, expire without forfeiture;
x. follow normal authorization procedures;
xi. mail a sales draft copy and cancellation policy to the Cardholder within 3 business days of the sales date;
xii. accept all Cardholder cancellations within the time limits specified by you;
xiii. upon cancellation, you shall complete a Credit Transaction Receipt with the information set out in (ix) above and include the cancellation code. You must deposit the Credit Transaction Receipt within 5 days of the transaction date and mail a copy to the Cardholder within 3 days of the transaction date of the Credit Transaction Receipt;
xiv. for a Lodging Merchant, if the reserved accommodations are unavailable, you must provide the Cardholder the following services without charge: (1) refund the entire advance deposit amount, (2) a copy of the Credit Transaction Receipt to the Cardholder, (3) comparable accommodations at an alternate establishment for the number of nights specified in the reservation not to exceed 14 nights or until the reserved accommodations become available, (4) two three-minute telephone calls, (5) message forwarding to the alternate establishment, (6) transportation to the alternate establishment and return to the original establishment and, if requested, daily transportation to and from the alternate establishment and your location; and
xv. for a Car Rental Merchant if the reserved vehicle is unavailable, you must provide the Cardholder the following services without charge: (1) refund the entire advance deposit amount, and (2) provide a comparable vehicle for the number of days specified in the reservation, not to exceed 14 days or until the reserved vehicle becomes available.
xvi. for a Cruise Line Merchant if the reserved accommodations are unavailable, and no comparable accommodations are available on the ship, the Merchant may offer: (1) a comparable cruise within the same approximate sailing dates and number of sailing days specified in the reservation, (2) any extra nights’ accommodations or air fare to a different port city necessitated by the Cardholder’s acceptance of alternate accommodations. The Merchant must refund the entire T&E deposit amount, if comparable accommodations are not available or the Cardholder does not accept the offered accommodations. The Merchant must provide a credit receipt to the Cardholder and the Merchant must provide all of the following without charge, (1) one night’s hotel accommodation, if required, (2) transportation to the hotel as well as the airport, (3) Airline transportation to the airport nearest the Cardholder’s residence, (4) reasonable out-of-pocket expenses incurred by the Cardholder because the guaranteed accommodations were not available.
E. T&E Cash Disbursement Service: You may make cash disbursement to a registered Visa Gold or Platinum Cardholder under the following conditions:
i. Cardholder indicates at registration the intent to pay for services with a Visa Card;
ii. Before disbursement, you review positive identification, and, if permitted by applicable law, record type and number on the sales draft;
iii. You complete an 80 column Cash Disbursement sales draft or a 51 column Cash Disbursement T&E sales draft that includes the Cardholder’s positive identification or a Cash Disbursement Record;
iv. You do not disburse more than $250.00 during the Cardholder’s stay. Cash availability may limit cash disbursements; and
v. You must not include any additional fees or charges except taxes or charges imposed by law on the transaction amount.
F. Visa Reservation Service: Any Merchant who accepts Cards to guarantee reservations must do so in accordance with the following requirements:
i. You must accept all Visa Cards in accordance with the Cake Payfac Agreement;
ii. You must obtain the Cardholder’s account number, expiration date, and name embossed on the Card. You must quote to Cardholder the rate of reserved accommodation, Merchant’s name and address, and the Confirmation Code advising that it be retained. Advise the Cardholder that if he/she has not checked in by checkout time the following day after his/her scheduled arrival date or the reservation was not properly canceled, the Cardholder will be billed for one night’s lodging plus applicable taxes. If requested, you will provide a written confirmation with the above information including the Visa reservation service provisions relating to the Cardholder’s obligation, and any other reservation details;
iii. You must accept all cancellations prior to the specified time. The Merchant must not require more than 72 hours cancellation notification prior to the scheduled arrival date. But, if the Cardholder makes the reservation within 72 hours of the scheduled arrival date, the cancellation deadline must be no earlier than 6:00 p.m. on the arrival date. If you require that the Cardholder cancel before 6:00 p.m. on the arrival date, you must mail the cancellation policy to the Cardholder;
iv. If the reservation is properly canceled, you must provide a cancellation code and advise the Cardholder to retain it. If requested, you must mail a confirmation of cancellation that includes the Cardholder name, account number, card expiration date, cancellation code, and details related to the canceled reservation;
v. If Cardholder has not claimed or canceled the accommodation by the specified time, the room(s) must be held available in accordance with the reservation until checkout time the following day. You may then complete a sales draft for 1 night’s lodging plus applicable tax, indicating the Cardholder’s account number, expiration date, and name embossed on the Card and the words “No Show” on the Cardholder signature line. You must obtain an authorization code for the no show transaction;
vi. If guaranteed accommodations are unavailable, you must provide Cardholder with comparable accommodations as described in Section 14.C.xiv above. These services shall be provided at no cost to Cardholder.
15. Health Care Transactions and Programs
A. Preauthorized Health Care Transactions.
i. Order Form. Merchants accepting Preauthorized Health Care Transactions must have the Cardholder complete an order form containing the following:
a. a request for the services to be charged to the Cardholder’s account;
b. assignment of insurance benefits to you;
c. authorization for you to charge the Cardholder’s account for only that portion of the bill subsequent to your receipt of any applicable insurance payment;
iv. duration of time, not to exceed 1 year, for which permission is granted; and
d. if the Preauthorized Health Care Transaction is renewed, the Cardholder must provide an updated order form.
ii Procedures. Merchants accepting Preauthorized Health Care Transactions must:
a. retain a copy of the order form during the period it is in effect;
b. provide a copy of the order form upon Cake, Processor or Member Bank’s request; and
c. type or print the words “Preauthorized Health Care” on the signature line of the sales draft; and
d. submit a sales draft within 90 days of the service date and request authorization for the amount due upon receipt of notice of adjudication from Cardholder’s insurance company.
iii. Cancellation. You must not complete a Preauthorized Health Care Transaction after receiving a decline response or a notice of cancellation from Cardholder, Cake, Processor or Member Bank.
B. Health Care Auto-Substantiation. Merchants participating in Health Care Auto-Substantiation must comply with the provisions of the Visa Health Care Auto-Substantiation Transactions Documents. The Merchant must also obtain a license from and be certified by SIGIS, the Special Interest Group for IIAS Standards.
C. Health Care Eligibility Service. Merchants participating in the Health Care Eligibility Service must comply with the provisions of the Visa Health Care Eligibility Service Implementation Guide.
16. Visa Supermarket Program
A merchant that wishes to participate in the Visa Supermarket Incentives Program must first obtain a Supermarket Incentives Agreement with Cake, Processor or Member Bank.
17. Telephone Services.
A telephone service Merchant must not accept payment for a telephone call when the Card number is either entered via touchtone key pad or provided to an operator. This prohibition excludes the following:
(i) Telephone Service Transactions conducted at an Unattended Cardholder-Activated Terminal
(ii) Transactions for which the Issuer has a contract with the carrier
(iii) Transactions involving telephone services that have been explicitly approved by Visa and provide appropriate risk controls
(iv) Telephone orders for goods and services; and
(v) Transactions provided by Inbound Teleservices Merchants, as specified in the Visa Merchant Data Standards Manual
18. Automated Fuel Dispenser
i. When an Automated Fuel Dispenser (“AFD”) transaction takes place, the card must be presented and the entire, unaltered contents of either Track 1 or Track 2 of the magnetic stripe must be read and transmitted along with a value of “90” in the POS entry mode code field.
ii. The Merchant name, city, state, and zip code of the station location where the transaction took place must be included in any authorization and clearing message.
iii. A transaction receipt must be produced and the transaction must be cleared within 2 days of the transaction date.
iv. You must obtain an authorization for the exact amount of the transaction or use the status check procedure, which requires you to request an authorization for no more than $1.00.
v. You must use the status check procedure if the floor limit is zero and the actual transaction amount is no more than the maximum set by Visa and MasterCard, which amounts are currently $125.00 for Visa transactions and $100.00 for MasterCard transactions.
vi. You must have an established self-service terminal operating plan on file with Cake, Processor or Member Bank and must establish a velocity check program that monitors the volume and frequency of account transactions.
vii. The transaction ratio of chargebacks to total Visa Interchange for Merchant must not exceed an average of 0.30% for the previous 6 months.
viii. The transaction ratio of fraud to total Visa Interchange for Merchant must not exceed an average of 0.40% for the previous 6 months.
ix. Under no circumstances should you use an arbitrary estimation of the transaction amount to obtain an authorization.
x. An AFD must not dispense scrip.
xi. Terminals at automated fuel dispensers do not qualify for the Qualified Rate set forth on the Merchant Application. In order to qualify for the Automated Fuel Dispenser Transaction Rate the authorization must be obtained within 1 day of the transaction date and the sale must be for less than the maximum amount set by Visa and MasterCard, currently $125.00 for Visa transactions and $100.00 for MasterCard transactions.
B. Programming. Neither Cake nor Processor is responsible for programming or reprogramming of fuel dispensers.
If you enter into a lease or rental agreement for the use of credit card processing equipment, you understand that such agreement is separate and apart from the the Cake Payfac Agreement and is subject to the terms and conditions of the lease or rental agreement. Neither Cake, nor Processor nor Member Bank is a party to such leases and neither is affiliated with the third party institutions. Such leases are typically non-cancelable 48-month leases. Termination of the Cake Payfac Agreement with Cake does NOT automatically terminate your equipment lease, it only terminates your processing agreement with Member Bank with respect to payment card processing and any other electronic transactions that are settled through the Member Bank as designated on your monthly statement from the Member Bank. You acknowledge that you have selected the equipment set forth on the Merchant Application based upon your own independent evaluation and you are not relying upon any warranty or representation of any third party, including but not limited to the representations of a sales representative, regarding the equipment. Cake is not responsible for and is not able to provide customer service for equipment, such as POS devices, installed by and/or operated by any third party. Merchant should contact the third party for service of this equipment. Merchant shall not allow any third party to install, remove, or modify any terminal software application of Cake, Processor or Member Bank without the express written consent of Cake, Processor or Member Bank.
You must be in possession of a working imprinter, a supply of blank sales drafts and an accurate imprinter plate showing your DBA name, city, state, and Merchant Identification Number. If you are not in possession of the above equipment, you must contact Cake to obtain such equipment. Failure to use the equipment and supplies listed above will seriously increase your liability for chargebacks. You must obtain an imprint of a Card when a Card will not swipe. Obtaining an imprint of a Card will greatly reduce your chance of a chargeback.
21. Merchant Identification Number.
You are responsible for ensuring that your Merchant Identification Number (“MID”) is kept confidential. When a change to your merchant account is required, you must disclose your MID to the Cake representative as confirmation that the person requesting the change has authority to do so. If the person requesting the change discloses the proper MID, Cake, Processor or Member Bank shall assume that person has the proper authority to make the change. You shall be fully liable for any changes to your Merchant Account after disclosure of the MID. Cake, Processor or Member Bank may request from you additional information to further verify your identity.
22. Use of Third Party Terminals and/or Software.
If you elect to use the terminal of a third party provider of software (such as POS or Accounting System vendors) to capture and transmit to Cake, Processor or Member Bank, you assume full responsibility and liability for any failure of such third party provider to comply with the Rules. The third party provider is the source for information regarding authorizations and reversals that may be needed by Cake, Processor or Member Bank. Certain reversals require authorization information to reverse. You are responsible for obtaining this information from the third party provider. Cake, Processor and Member Bank are not liable for sales that were not received by them. In addition, neither Cake nor Processor will not be liable for third party software or clearing of Card Network transactions.
THE FOLLOWING RULES APPLY ONLY IF CAKE, MEMBER BANK OR PROCESSOR SETTLES YOUR DISCOVER NETWORK CARD TRANSACTIONS
23. Discover Network Marks.
You are prohibited from using the Discover Network Program Marks, as defined below, other than as expressly authorized in writing by Processor or Cake. “Discover Network Program Marks” mean the brands, emblems, trademarks, and/or logos that identify Discover® Network cards. Additionally, you shall not use the Discover Network Program Marks other than to display decals, signage, advertising, and other forms depicting the Discover Network Program Marks that are provided to you by Cake or Processor pursuant to the Cake Payfac Agreement or otherwise approved in advance in writing by Cake or Processor. You may use the Discover Network Program Marks only to promote the services covered by the Discover Network Program Marks by using them on decals, indoor and outdoor signs, websites, advertising materials and marketing materials; provided that all such uses by you must be approved in advance by Cake or Processor in writing. You shall not use the Discover Network Program Marks in such a way that customers could believe that the products or services offered by you are sponsored or guaranteed by the owners of the Discover Network Program Marks. You recognize that you have no ownership rights in the Discover Network Program Marks. You shall not assign to any third party any of the rights to use the Discover Network Program Marks. Your authority to use the Discover Network Program Marks will terminate immediately upon notice from Cake, Processor, Member Bank or Discover Network.
24. Priority Check-Out Service.
If you offer priority check-out services, you must comply with the following requirements: (i) require the Cardholder to sign the registration card at the time of check-in acknowledging responsibility for all charges, and obtain an authorization for the estimated amount of the accommodations at check-in; (ii) complete a sales draft at check-out by entering the total amount of charges incurred during the stay, including restaurant bills, telephone charges, convenience bar charges, missing item fees and miscellaneous expenses; (iii) write the words “Priority Check-out” on the Cardholder signature line of the sales draft; (iv) obtain a final authorization code for any additional amounts from the check-in estimate to equal the total amount to be billed to the Cardholder by following the normal authorization procedures; and (v) mail (at the address shown on the registration card) or otherwise deliver a copy of the sales draft and the itemized lodging bill (portfolio) to the Cardholder within seven (7) calendar days of check-out.
25. Card Checks.
Card checks are frequently issued to Cardholders by Discover Network. You agree to accept card checks on a basis consistent with the terms of your policy applicable to acceptance of other payment card checks. You should handle these card checks like any other personal check drawn upon a bank in the United States.
26. Cardholder Contact.
You must not contact any Discover Network Cardholder with respect to any matter arising under the Discover Rules, except as required or permitted in the Discover Rules.
IN ADDITION TO THE OTHER REQUIREMENTS SET FORTH IN THIS DOCUMENT, THE FOLLOWING RULES APPLY TO PIN-DEBIT CARD TRANSACTIONS
27. Honoring PIN-Debit Cards.
You shall not require Cardholders to provide personal information (such as telephone number or address) as a condition for honoring a PIN-Debit Card, unless required by the Rules. You may not require or request the Cardholder’s signature or any other means of verifying the Cardholder’s identity. You shall place the PIN Entry Device in an area accessible by all Cardholders and that will reasonably prevent others, including Merchant employees, from observing the PIN. Any penalties incurred by you for failure to comply with Debit Network Rules will be your responsibility. You assume exclusive responsibility for the consequences of any oral or written instructions you may give to Cake, Processor and/or Member Bank, for your failure to properly access the services in the manner prescribed by Cake, Processor or Member Bank, and for your failure to supply accurate input information. You will be responsible for auditing, balancing, verifying and reconciling any out-of-balance condition, and for notifying Cake or Processor of any errors in the foregoing after receipt of the applicable report from Cake, Processor or Member Bank. You will reject all incorrect reports or output within two (2) business days after receipt of the reports or output. Note, also, that neither Cake, nor Processor nor Member Bank warrant the continuing availability of any Debit Network.
28. PIN-Debit Card Sales Drafts.
A. Procedures. You shall deliver to the Cardholder at the time of a sale a true and completed copy of the sales draft evidencing a sale involving use of a PIN-Debit Card (“PIN-Debit Sales Draft”). The PIN-Debit Sales Draft must comply with the Rules and Laws. The following information must be included on the PIN-Debit Sales Draft: (i) the PIN-Debit Card account number; (ii) your DBA name; (iii) your city and state; (iv) the amount of sale; and (v) the sale date. A PIN-Debit Sales Draft shall be made available to the Cardholder at each terminal. You may not require or request the Cardholder to provide or disclose their PIN in any oral or written manner to the Merchant. You shall not impose any fee or charge for a PIN-Debit Card transaction without the prior written consent of Cake, Processor or Member Bank. If surcharging is approved by Cake or Processor, it must be a separate line item on the PIN-Debit Sales Draft and must be in compliance with all Debit Networks’ rules and federal and state laws and regulations. You shall not process any sale if an authorization code is not received through the electronic terminal. When a denial to an authorization request is received, the POS transaction shall not be completed unless completed as a store and forward transaction or resubmission transaction. A sale shall not be completed if you know or should know that the sale is fraudulent or not authorized by the Cardholder.
B. Reversal. A sale may be reversed or voided electronically, but only if such reversal/void is entered prior to midnight of the calendar day on which the sale was initiated. To effect a reversal or void, Cardholder must reenter the PIN, the magnetic stripe reader must read the card, and you must transmit the trace number and the exact dollar amount of the sale to be reversed or voided. A reversal or void must be initiated at the same Merchant identified on the PIN-Debit Sales Draft at which the original sale was initiated, but it need not be initiated at the same POS terminal.
C. Returns. All returns shall be processed in accordance with your normal procedures except that you or Cardholder shall not attempt to reverse a previously approved POS transaction unless otherwise permitted in accordance with the Debit Network Rules. Any sale known by you to be erroneous should be canceled and re-billed in the Cardholder’s presence.
D. Balance Inquiry. Balance inquiries may be performed only by the Cardholder at a Cardholder-operated terminal and shall at all times require the Cardholder to enter the PIN and use the magnetic stripe reader.
29. Promotional Materials.
You will adequately display promotional materials to inform the public that PIN-Debit Cards will be honored by you. All uses by you of decals, signs, printed and broadcast materials and other promotional materials must be in conformity with the requirements of the Debit Networks, Processor, and Member Bank. You will not at any time do, or cause to be done, any act or deed in any way impairing or intended to impair Cake, Processor or Member Bank’s exclusive right, title and interest in and to its respective protected marks.
You agree to pay Cake, Processor or Member Bank for any Debit Network fees, fines or charges imposed on you, Cake, Processor or Member Bank. Such reimbursement will be accomplished by the debit of the sum(s) involved from your Merchant Account. If Cake, Processor or Member Bank elects, at its discretion, to take action on reversals after the Debit Network time limits have expired, such action shall be done at additional cost. Upon request of a Debit Network, Cake, Processor, or Member Bank, you will retrieve and forward to Cake, Processor or Member Bank, within the time frame required, either the original or a readable copy of the terminal journal tape or duplicate transaction receipt for the transaction in question and, if requested, will give the Debit Network such information from such transaction records as it requests by telephone. You will, on request of the Debit Network, cooperate fully with the Debit Network and the Card issuing participant in order that the participant may comply with the error resolution procedures.
31. Your Name and Address.
All forms submitted to Cake, Processor or Member Bank must bear both your corporate and “Doing Business As” (“DBA”) name.
A. Use. You shall take all necessary steps to ensure that all POS Terminals and PIN Entry Devices operated in all of your locations:
i. are placed in an area accessible by all Cardholders;
ii. are available for use whenever you are open for business;
iii. will function with minimal error, meeting all applicable technical specifications and security regulations; and
iv. will require the Cardholder to enter the Cardholder’s PIN at or near the check out location when initiating a POS transaction.
B. Standards. A PIN Entry Device must meet the ANSI standard format X9.8, 1995 or newer requirements, as they are released. A PIN Entry Device must comply with the PCI DSS requirements for POS and PED equipment. Terminals must have a magnetic stripe reader capable of reading Track 2 on the PIN-Debit Cards. PINs used in conjunction with any store and forward transaction or your resubmission must be encrypted and stored within a tamper-resistant security module. If your authorization system is capable of store and forward, it must comply with the Debit Networks’ rules and regulations regarding this capability. Cake, Processor or Member Bank, the Issuer and the Debit Networks shall not be liable for any losses suffered by you arising from the use of the store and forward function. A PIN must never be logged in any form as a function of software either in the clear or encrypted.
33. Supply of Information.
You must submit all information requested by the Debit Networks, Cake, Processor or Member Bank, including but not limited to lists and mailing addresses of terminals. You shall not sell, purchase, provide, or exchange account number information in any form, including but not limited to, transaction receipts, carbon copies of transaction receipts, mailing lists, tapes, to any third party other than to your agents for the purpose of assisting you in your business, or to the Debit Networks, Cake, Processor or Member Bank, or pursuant to a government request.
34. Distribution and Storage of Information.
You shall not disclose a Cardholder’s account information or any other personal information to third parties other than to your agents for the purpose of completing the sale or as specifically required by law or by the Rules. You shall store in a limited access area for at least 1 year after the date of sales all transaction records, and you shall make and retain for at least 2 years the original or legible microfilm copies of both sides of all transaction records. Prior to discarding, you shall destroy or make unreadable all material containing Cardholder account numbers. There are no voice authorizations for PIN-Debit Card transactions and no manually imprinted PIN-Debit Sales Drafts. You may not store the Cardholder’s PIN in any manner.
35. Left PIN-Debit Cards.
PIN-Debit Cards that are inadvertently left at your location must be held under dual control during the time they are retained. PIN-Debit Cards inadvertently left at your location may be returned to the Cardholder by you under the following conditions: (A) the Card was inadvertently left by the Cardholder at an on-premise location, (B) the Cardholder requests the Card within 1 business day, and (C) the Cardholder provides 2 forms of current identification, at least 1 of which is a photo identification. If the Cardholder has not requested the Card within 1 business day, the Card should be destroyed by cutting it in half through the stripe.