Advertising Law Tool Kit 13th Edition 2025

Venable / 61 60 / Venable Payment Processing Establishing a solid merchant processing relationship for the acceptance of card and other forms of payment for your sales is a key back-end function that no merchant should neglect. In addition to processing payments through the credit and debit card and automated clearing house (ACH) networks, payment processors can provide helpful analytical tools, dispute resolution, data security assistance, and other products or services related to payment processing. Merchant processing can be complex, however, as the payments ecosystem has multiple layers of stakeholders, including card-issuing banks, the card and ACH networks, merchant-acquiring banks, processors, independent sales organizations, payment facilitators, third-party senders, and software providers. The emergence of value-added resellers and independent software vendors, which often offer payment processing services as part of their platforms, may also bring new processing options to the table. Complicating matters further, consumers demand more payment options than ever, including new developments such as Buy Now Pay Later (BNPL), digital wallet integration, and even cryptocurrency. We help our merchant clients navigate the roles and responsibilities of each party in the payments chain so they can effectively understand and negotiate the complexities of accepting a broad range of payment methods. We assist with the spectrum of related issues, from the merchant application through the terms of the payment processing agreement, fee schedules, bank requirements, and compliance with network rules. We also assist merchants in understanding the regulatory and law enforcement risks that go with payment processing, including how the regulators view processing metrics, the opening of multiple merchant accounts, chargeback or fraud-monitoring programs, Andrew E. Bigart aebigart@Venable.com Ellen T. Berge etberge@Venable.com consumer protection issues in accepting payments, and other potential processing pitfalls. Our work extends beyond the intricacies of establishing and maintaining merchant processing accounts. We regularly advise merchants on the legal and regulatory requirements for charging surcharges, convenience fees, and other, similar processing fees. This has become a nuanced area in recent years, given changes in state laws, network scrutiny, and a broader regulatory focus on ensuring that fees are clearly and conspicuously disclosed to consumers. Similarly, subscription and autorenewal payments continue to present opportunity and risk for merchants. These types of payment plans can bring stability and recurring revenue for merchants. But they are subject to a host of legal and regulatory requirements. If not structured carefully, these types of programs can expose merchants to law enforcement and private litigation risks. Consider these best practices to minimize legal, regulatory, and business problems related to payment processing: • Accept cards and other forms of payment consistent with your merchant processing agreements, network rules, and applicable laws and regulations • Handle payments, refunds, returns, and exchanges properly, and in a timely manner • Comply with payment card industry data security and storage requirements • Use encryption and tokenization to secure payments • Take proactive steps to minimize fraud and cardholder disputes (chargebacks) • Continually strengthen your understanding of the payments industry and your responsibilities in accepting payments.