Join us as we spotlight select chapters of Venable’s popular Advertising Law Tool Kit, which helps marketing teams navigate their organization’s legal risk. Click here to download the entire Tool Kit, and tune in to the Ad Law Tool Kit Show podcast, to hear the authors of this chapter dive deeper into the issue of payment processing in this week’s episode.

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 retailer 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 that they can effectively understand and negotiate the complexities of accepting a broad range of payment methods. We provide assistance 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, consumer protection issues in accepting payments, and other potential processing pitfalls.

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.

To learn more about payment processing, contact Ellen Berge or Andrew Bigart. For more insights into advertising law, bookmark our All About Advertising Law blog and subscribe to our monthly newsletter.

Print:
Email this postTweet this postLike this postShare this post on LinkedIn
Photo of Ellen T. Berge Ellen T. Berge

Ellen Berge provides counsel on regulatory compliance, government investigations, contract negotiations, and general business matters. Ellen focuses on advertising, marketing practices, payment processing, and merchant services. Her clients include major brand advertisers and direct-response retailers, and lead generators, telemarketers, media agencies, software providers…

Ellen Berge provides counsel on regulatory compliance, government investigations, contract negotiations, and general business matters. Ellen focuses on advertising, marketing practices, payment processing, and merchant services. Her clients include major brand advertisers and direct-response retailers, and lead generators, telemarketers, media agencies, software providers, and others who serve them. On the merchant services side, she leads a practice that works with banks, processors, sales agents, payment facilitators, independent software vendors, and fintech and financial services businesses. Ellen also serves as the firm’s managing partner of Professional Development and Recruiting.

Read more about Ellen T. Berge
Show more Show less
Andrew E. Bigart

Andrew Bigart focuses his practice on helping bank and non-bank financial institutions navigate the federal and state regulatory environment governing payments, lending, and consumer financial services. Andrew provides regulatory and business counseling advice to clients across a variety of industries, including banks, payments…

Andrew Bigart focuses his practice on helping bank and non-bank financial institutions navigate the federal and state regulatory environment governing payments, lending, and consumer financial services. Andrew provides regulatory and business counseling advice to clients across a variety of industries, including banks, payments companies, money transmitters, broker-dealers, lenders, and trade associations. He counsels clients on regulatory compliance matters, contract negotiations, due diligence, federal and state examinations, and civil investigations and litigation before federal and state banking and financial institution regulators. Andrew has been recognized by Legal 500 and named to the Electronic Transactions Association’s Forty under 40 list.

Read more about Andrew E. Bigart
Show more Show less
Related Posts
Drip Pricing, Surcharging, and the Push for “Total Price” Disclosures
May 17, 2024
Listen to Episode 7 of Venable's Ad Law Tool Kit Show – "Payment Processing"
March 12, 2024
Increasing Regulatory Scrutiny for the Merchant of Record Model
June 13, 2023