Payment Facilitation Agreement

A payment facilitation agreement is a legally binding agreement between a payment facilitator and a merchant that allows the merchant to accept payments from customers through the payment facilitator’s platform. Payment facilitators, also known as payment aggregators or payment service providers, act as intermediaries between merchants and payment processors, allowing merchants to process payments without having to establish their own payment processing infrastructure.

This agreement sets out the terms and conditions that govern the relationship between the payment facilitator and the merchant, including fees, payment processing rules, and liability. It also outlines the roles and responsibilities of each party and their obligations to comply with regulatory requirements.

The payment facilitation agreement is a crucial component of any business that accepts electronic payments. It provides a framework for both parties to work together and ensures that the payment process is smooth and secure. By agreeing to the payment facilitation agreement, the merchant agrees to comply with the payment processing rules and procedures established by the payment facilitator, which helps to reduce the risk of fraud and chargebacks.

In addition to outlining the payment processing rules and procedures, the payment facilitation agreement also establishes the fees that the merchant will pay to the payment facilitator. These fees can include transaction fees, per-transaction fees, and other charges. The merchant should carefully review the payment facilitation agreement to ensure that they understand the fees they will be charged and how they will be calculated.

It’s important to note that payment facilitation agreements can vary depending on the type of payment facilitator and the merchant’s business needs. For example, some payment facilitators may require merchants to maintain a minimum monthly processing volume, while others may charge lower fees for higher processing volumes.

In summary, a payment facilitation agreement is a legal document that outlines the terms and conditions of the relationship between a payment facilitator and a merchant. This agreement is essential for any business that accepts electronic payments and helps to ensure that the payment process is smooth, secure, and compliant with regulatory requirements. Merchants should carefully review the payment facilitation agreement to understand the fees they will be charged and their obligations under the agreement.

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