Payment Processing Agreement is one of the most crucial legal documents for any business accepting cashless payments — whether a physical store with a POS terminal or online commerce. This agreement regulates the relationship between the business (Merchant) and the Payment Service Provider (PSP) or bank. The document defines transaction fees, settlement periods, security standards, chargeback conditions, and liability in case of fraud.
The Law of Georgia on Payment Systems and Payment Services strictly regulates this field. Businesses often sign standard bank contracts without reading the details, leading to serious financial losses later. For example, in cases of high chargeback rates, a provider can unilaterally freeze an account or terminate services. Legal.ge allows you to connect with qualified lawyers who will help audit, negotiate, and optimize payment agreements to ensure your business interests are maximally protected.
What does the Payment Processing Agreement Service cover?
The service caters to both merchants and fintech companies and includes:
- Agreement Analysis and Risk Assessment: Detailed review of contracts proposed by banks or PSPs to uncover hidden fees, penalties, and unfavorable terms.
- Chargeback Policy Regulation: Refining clauses that determine when and at whose expense disputed transaction funds are returned.
- Rolling Reserve Conditions: Negotiating with the bank to reduce the amount and duration of frozen funds (e.g., 3% instead of 5% of turnover).
- PCI DSS Compliance: Correctly allocating data protection obligations between the provider and the merchant in the contract.
- International Payments: Legal structuring of multi-currency settlements and conversion terms.
- Merchant Agreement Drafting (for PSPs): If you are a payment provider, our lawyers will draft a standard agreement for your clients.
Common Real-World Scenarios
Businesses often face the following problems:
- Unexpected Account Blocking: The bank suspended transactions due to "suspicious activity." Legal intervention is needed to quickly unblock the account.
- High Fees: Small businesses pay much higher fees than the market average. Reviewing the contract can save thousands of GEL.
- Fraudulent Transactions: An online store sold an item with a stolen card. The bank demands reimbursement from the store. Who is liable — the 3D Secure system or the merchant?
- Termination Penalty: A company wants to switch providers, but the old contract stipulates a hefty penalty for early termination.
Legal Framework: National Bank and Legislation
The relationship is regulated by the Law on Payment Systems and Payment Services and relevant regulations of the National Bank of Georgia. The law obliges the provider to transparently inform the client about service terms. It is also important to consider the rules of international payment systems (Visa, Mastercard), which are often integrated into local contracts.
Step-by-Step Service Process
- Audit: Studying the existing agreement.
- Identification: Marking problematic clauses (Pain Points).
- Negotiation: Communicating with the bank/PSP legal department to change terms.
- Finalization: Signing the updated agreement or supplementary addendum.
Why choose a specialist on Legal.ge?
Payment processing is the lifeblood of a business. A poorly drafted contract can halt cash flows at the most critical moment. Lawyers on Legal.ge possess deep knowledge in fintech and banking law. We will help you achieve the best commercial terms and protect yourself from financial risks. Don't sign blindly; trust professionals.
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