1. Purpose and Scope

This Agreement sets forth the terms and conditions under which Paaysay, acting as an Acquirer, provides payment processing, settlement, and compliance services to you as a Payment Facilitator. You will be responsible for onboarding, managing, and overseeing sub-merchants in accordance with this Agreement, applicable laws, and card scheme rules.

2. Definitions

2.1. Acquirer: A financial institution authorized to process card transactions on behalf of merchants or Payment Facilitators.
2.2. PayFac: The Payment Facilitator, authorized to onboard sub-merchants under its master account with Paaysay.
2.3. Sub-Merchant: A business onboarded by the PayFac to accept payments via the PayFac’s payment platform.
2.4. Card Schemes: Payment networks such as Visa, Mastercard, and others.
2.5. Chargeback: A reversal of a transaction initiated by the cardholder or issuing bank.

3. Obligations of the PayFac

3.1. Sub-Merchant Onboarding:
You are responsible for:

Conducting Know Your Customer (KYC) and Anti-Money Laundering (AML) checks on all sub-merchants.

Ensuring compliance with card scheme rules during onboarding.

Submitting sub-merchant data to Paaysay for approval and record-keeping.

3.2. Transaction Processing:

Facilitate transaction processing for sub-merchants under your master account.

Ensure all transactions comply with PCI DSS and other security standards.

3.3. Fraud and Risk Management:

Monitor transactions to detect and prevent fraud.

Notify Paaysay immediately of any suspicious activities or breaches.

3.4. Reporting:

Provide monthly reports on sub-merchant activity, including transaction volumes, chargebacks, and disputes.

3.5. Compliance:

Adhere to all applicable laws, card scheme rules, and Paaysay’s Acceptable Use Policy.

4. Obligations of Paaysay

4.1. Payment Processing:

Provide infrastructure to process card transactions for the PayFac’s sub-merchants.

4.2. Settlement and Reserves:

Settle funds to the PayFac’s designated account, net of applicable fees and reserves.

Maintain reserves to mitigate risks related to chargebacks and disputes.

4.3. Compliance Support:

Ensure compliance with card scheme rules and regulatory requirements on behalf of the PayFac.

4.4. Dispute Resolution:

Assist in managing chargebacks and disputes, providing tools and guidance to the PayFac.

5. Fees and Charges

5.1. Processing Fees:
Fees for processing transactions are outlined in the Pricing Schedule available on the Paaysay website or provided as an appendix to this Agreement.

5.2. Chargeback Fees:
A chargeback fee of £[Insert Amount] per chargeback will be applied to the PayFac.

5.3. Reserves:
Paaysay may withhold a percentage of the PayFac’s transaction volume as a reserve to mitigate financial risks. The reserve percentage will be determined based on risk assessments.

5.4. Other Fees:
Additional fees for services such as advanced fraud monitoring, reporting, or custom integrations will be specified in the Pricing Schedule.

6. Risk Management and Reserves

6.1. Reserve Requirements:

Paaysay reserves the right to withhold funds as a reserve based on the PayFac’s transaction volume, chargeback ratio, and risk profile.

6.2. Chargeback Ratio Monitoring:

The PayFac must maintain a chargeback ratio below [Insert Threshold, e.g., 1%]. Excessive chargebacks may result in additional reserves or termination of this Agreement.

7. Term and Termination

7.1. Term:
This Agreement remains in effect until terminated by either party with [Insert Notice Period, e.g., 30 days] written notice.

7.2. Termination by Paaysay:
Paaysay may terminate this Agreement immediately if:

The PayFac breaches the terms of this Agreement.

The PayFac’s activities violate card scheme rules or regulatory requirements.

The PayFac is involved in fraudulent activities or financial instability.

7.3. Post-Termination Obligations:

The PayFac remains liable for chargebacks and disputes related to transactions processed prior to termination.

8. Liability and Indemnification

8.1. PayFac Liability:
The PayFac is liable for all losses, chargebacks, and disputes related to sub-merchant transactions.

8.2. Indemnification:
The PayFac agrees to indemnify and hold Paaysay harmless from any claims, losses, or damages arising from the PayFac’s breach of this Agreement or non-compliance by its sub-merchants.

9. Data Protection and Security

Both parties shall comply with data protection laws, including GDPR, and implement security measures to protect cardholder data.

10. Governing Law and Dispute Resolution

This Agreement is governed by the laws of England and Wales. Any disputes shall be resolved in the courts of England and Wales.

11. Entire Agreement

This Agreement constitutes the entire agreement between the parties regarding the subject matter and supersedes all prior agreements.