The commercial slowdown wrought by the global pandemic COVID-19 has left many in the payments industry wondering how the virus will affect their existing processing agreements. Depending on which side of an agreement you are on, you may be worried about breaching your contractual obligations…

In light of the significant increase in chargebacks resulting from COVID-19, Visa, Mastercard and American Express recently issued guidance to assist acquirers, issuers, and merchants in navigating the dispute process. Below is a summary of that guidance. Visa On March 27, 2020, Visa released a…

The Taft Paytech & Payment Systems team has prepared the following tips for ISOs, processors, payment facilitators, ISVs, money services businesses, and banks in light of COVID-19 developments.

• Review Termination Rights and Implications. Contracts often include a force majeure clause that excuses nonperformance when it is caused by unforeseen events beyond the control of the parties. An evaluation of whether the current circumstances qualify as a force majeure event should be conducted. If the contract does not contain such a provision, there may be other remedies if you are unable to perform.
  

As of January 1, 2020, the California Consumer Privacy Act (CCPA) is now in effect. As we explained here, the CCPA imposes requirements on merchants and payment processors to protect personal information of California residents.

Enforcement of the law does not begin until July 1, 2020, which is good because the regulations interpreting the law have not even been finalized yet. The draft regulations, published this past October by California’s Attorney General, propose rules relating to consumer disclosures, processing consumer requests, and other implementation details. Final rules will be issued before the July 1, 2020 enforcement date.

A federal court’s interpretation of a merchant contract resulted in the merchant not being liable for card brand security breach assessments. It may be worthwhile to examine and revise your merchant agreement in light of that ruling.

In Specs v. First Data, decided June 2019, the US Court of Appeals for the Sixth Circuit ruled that the limitation of liability clause in First Data’s merchant agreement took precedence over the agreement’s indemnification clause, and therefore that the merchant was not liable for card brand penalties. The indemnity obligated the merchant to reimburse First Data for any losses arising out of merchant violations of card brand rules, whereas the limitation of liability exempted the parties from indirect and consequential damages. The court found that card brand penalties qualified as consequential damages.