Merchant Agreement

What Is a Merchant Agreement?

A merchant agreement is a contract overseeing the relationship between a business and the merchant procuring bank it partners with. This document subtleties the full scope of electronic payment services that the merchant securing bank consents to give.

Generally speaking, such banks are responsible for facilitating each part of the electronic transaction process. Merchant banks much of the time likewise act as credit card suppliers for both open loop and closed loop merchant cards.

Getting Bank Relationships

Gaining bank relationships make it feasible for merchants to conduct sales of goods and services utilizing electronic payment transaction methods. This partnership involves getting data from the merchant's payment gateway technology, speaking with card issuers through the acquirer's network, getting authorization, and settling the transaction in the merchant's account.

The fees merchants pay for electronic payment processing services differ in view of online and brick-and-mortar transactions. Merchants are generally required to pay complete fees to the acquirer for each electronic transaction, which covers both the acquirer's fees and the processor's fees. Acquirers ordinarily likewise charge a month to month fee for the settlement and bank account services they accommodate merchants.

In cases wherein merchants prohibit electronic payments and just acknowledge cash, they will generally set up a standard bank account, that has its own set of requirements and contractual provisions.

While merchant agreements normally apply to sellers of goods or services, they can likewise address establishments and charitable institutions.

Rules and Requirements

Merchant agreements feature abundant rules, including the accompanying requirements:

• The merchant must acknowledge all substantial cards issued by the payment network.
• The merchant must unmistakably display the logos of the payment cards it acknowledges.
• The merchant may not expect customers to pay a surcharge on payment card transactions, besides in certain countries where this practice is permitted.
• The merchant might lay out a base transaction amount for payment cards.
• The merchant can't acknowledge the card to pay for unlawful purchases, like the sale of liquor or tobacco to minors.
• The merchant must charge the sales tax to the payment card alongside the purchase amount.
• The merchant can't approve the transaction to incorporate an estimated tip for transactions where a tip could apply, for example, restaurant purchases and taxicab fares.
• Rather than refunding a payment card transaction in cash, merchants must straightforwardly issue refunds back to the payment card utilized.
• The merchant must not print the cardholder's full account number or expiration date on the receipt.
• The merchant must defend the cardholder's personal data.
• The merchant must train employees to perceive possibly fraudulent transactions and fake cards.
• The merchant must furnish its customers with clear refund and return policies.

Features

• The fees merchants pay merchant securing banks to a great extent rely upon the number of transactions conducted.
• A merchant agreement is a contract laying out the boundaries of the relationship between a merchant procuring bank and the business it serves.
• In spite of the fact that merchant banks predominantly work with electronic transaction processing, some likewise outfit credit cards.