Merchant Agreement

A merchant agreement is a binding legal  contract between a merchant and a payment processing provider. The contract clearly defines the policies and conditions for accepting electronic payments. The terms for the agreement are set by the payment services provider, but are impacted by outside entities like card networks and financial institutions.

The merchant agreement outlines both merchants’ and service providers’ rights, responsibilities, and obligations, including transaction processing procedures, chargeback policies, and compliance requirements. The goal is to ensure transparency and accountability, so that all parties understand their rights and obligations

Merchant agreements also cover the fees or rates for processing. That per-transaction rate commonly varies based on the card issuer and/or the card network. In some instances, the merchant may have some room to negotiate pricing.