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Acies
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14
wall street, suite
1620
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new
york, ny 10005
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tel.
800.361.5540
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| Attn: | Kathleen Collins, Accounting Branch Chief |
| David Edgar, Staff Accountant |
| As Per Chase Agreement: | ||
| (a) | The Service Providers shall be under no obligation to enter into a Merchant Agreement with any Merchant solicited by ISO. The decision as to whether to enter into a Merchant Agreement shall be at the sole discretion of the Service Providers. Furthermore, in the event the Service Providers do enter into a Merchant Agreement with a prospective Merchant, the Service Providers may terminate such Merchant Agreement(s) in accordance with the terms thereof. | |
| Acies Clarification: | ||
| (a) |
Chase
is not required to accept new merchant accounts submitted by
Acies which
do not conform to underwriting guidelines. If Chase decides not
to accept
a new account submitted for placement in our portfolio, Acies
may choose
to place the account elsewhere (e.g., Paymentech). This is why
Acies has
multiple processing partners.
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| As Per Chase Agreement: | ||
| (b) |
The
Service Providers will perform credit reviews on prospective
Merchants and
ISO understands that the Service Providers will not accept those
Merchants
who do not meet the Program Standards or other credit criteria
set forth
by the Service Providers. The Service Providers may refuse to
execute a
Merchant Agreement with any prospective Merchant for any reason.
The
Service Providers will assume the risks associated with the Bankcard
processing relationship for those Merchants with a valid Merchant
Agreement signed by the Service Providers, except as otherwise
provided
herein.
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| Acies Clarification: | ||
| (b) |
Acies
compiles merchant information, performs preliminary underwriting
of new
accounts, and submits a package which is underwritten for Chase.
As per
this agreement, Chase may perform its own review and may decline
acceptance of a merchant on that basis. If we disagree with
the results of
the Chase review, we may choose to place the account with a
different
partner.
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| Chase assumes the risks related to the base transaction amounts for merchants who are not in compliance with the merchant agreement or who “disappear” to the point of there being a loss. Acies assumes the risks relating to transaction, processing and other fees chargeable to the merchant and the related expenses paid to third parties (as per schedule A to the Chase Agreement) including, but not limited to, interchange fees. In other words, Acies assumes the risks relating to all of the items which we currently report as our revenues and our costs of revenues. | ||
| As Per Chase Agreement: | ||
| (c) |
ISO
shall be liable to the Service Providers for all losses associated
with
Merchant relationships with the Service Providers, where the
application
submitted by ISO contains significant inaccuracies or omissions
the
absence or disclosure of which could have permitted the Service
Providers
to avoid the loss, in the sole good faith judgment of the Service
Providers.
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| Acies Clarification: | ||
| (c) |
In
the cases referred to in Section 4, Paragraph (c), Acies bears
risk for
all
losses
if
Chase determines that such loss could have been avoided if
the merchant
application/agreement had been completed in the proper fashion.
This
indicates that Acies is at risk for all losses (including base
transaction
amounts as well as fees) should the merchant supply fraudulent,
inaccurate
or incomplete information on the
application/agreement.
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| As Per Chase Agreement: | ||
| (d) |
ISO
shall be responsible for all losses and expenses associated with
Merchant
relationships when the application or Merchant Agreement was not
signed by
an individual with proper authority to sign such Agreement, or
the
signature on either the application or Merchant Agreement is alleged
to be
a forgery. |
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| Acies Clarification: | ||
| (d) |
Same
ramifications as Paragraph (c), except this relates to the signatory’s
propriety and authority. This means that if the signer of the
application/agreement holds him or her self out to be of proper
authority
to enter such agreement on the merchant’s behalf, or forges the signature
of someone who does have proper authority to do so, and it turns
out that
he or she is not, then Acies bears the risks for all losses and
expenses,
including any transaction amounts.
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| As Per Chase Agreement: | ||
| (e) |
No
assignee for the benefit of creditors, successor in interest, custodian,
receiver, trustee in bankruptcy, debtor in possession, sheriff
or any
other officer of a court, or other person charged with taking custody
of a
party’s assets or business, shall have any right to continue or to assume
or to assign this Agreement.
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| Acies Clarification: | ||
| (e) |
Restricts
the assignment of the Chase Agreement by Acies to another
party.
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| · |
Transaction
and processing fees, including those related to interchange, are
charged
to a merchant for every transaction, including sales and returns/refunds.
The fees are typically based on the absolute amount of a transaction,
whether positive or negative.
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The
merchant’s bank account would be debited for the refunded amount ($100.00)
and for transaction and processing fees, including those related
to
interchange (assume $2.50 aggregate). The merchant would have paid
$2.50
on the original sale (and credited $97.50 upon settlement) and $2.50
on
the return transaction (and debited
$102.50).
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If,
upon processing the negative transaction, the merchant no longer
exists,
its bank account has been closed or there are insufficient funds
against
which the $102.50 is to be debited, then Acies is informed via e-mail
that
there has been an “ACH Reject”.
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It
is Acies’ responsibility to assist in the recovery effort, including but
not limited to locating the merchant’s principals. If we cannot, the item
is turned over to First Data’s collections group. If First Data cannot
recover, then the item is written off by the bank in the amount of
$100.00, and the merchant (and principals thereof) are “TMF’d”, which is
an acronym for Terminated Merchant File, which along with other ensuing
protocols ensures that the merchant cannot receive credit/debit card
processing services in the future.
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In
our current business model whereby we pay an up-front fee upon setting
up
the merchant to “lay off” the risk, we are not liable for the $100.00 in
this example. Acies is, however, liable for the $2.50, the amount
that
equates to our revenue derived from the transaction. We are responsible
for paying all of the transaction and processing fees, including
interchange, which need to be paid to Chase, First Data, the card
association and the card-issuing bank. Acies is at risk for all of
its
gross revenues and expenses resulting from the
transaction.
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The
consumer contacts the issuing bank to dispute the charge. The issuing
bank
in turn contacts First Data to give notification of the
dispute.
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First
Data generates, on Acies’ behalf and letterhead, a Retrieval Request
Letter which is issued to the merchant. This letter requests that
the
merchant supply supporting documentation for the item under dispute,
and
generally has approximately 14 days to comply with the
request.
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If
the merchant complies with the request and supplies the appropriate
information, an investigation is performed by the issuing bank which
renders a decision regarding the validity of the disputed
item.
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If
the merchant does not comply with the request in the allotted time
period,
then the merchant’s bank account is debited for the original transaction
amount as well as chargeback fees, retrieval fees, and collection
fees.
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If
the merchant no longer exists, has “disappeared”, or its bank account
either no longer exists or has insufficient funds, then there is
a
scenario similar to that outlined above in Paragraph I, wherein the
issuing bank is responsible for the disputed base transaction amount,
and
Acies is responsible for, and at risk for, all transaction and processing
fees associated with the
transaction.
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