Payment Products and Systems

Chapman advises financial institutions, payment processors, and systems participants on the legal aspects of payment products and services. We have a thorough understanding of the legal and practical aspects of issuing, acquiring and processing payments transactions, payment methods, and network participation. We provide advice and updates on the latest legal developments, particularly in the area of payments and financial technology, and provide advice on UCC, NACHA, MasterCard, VISA and network rules and regulations, as well as various laws related to commercial paper, deposits, collections, and electronic funds transfers.

Our work with clients spans the entire spectrum of payment matters including payment processing; electronic commerce; cash management services; electronic data interchange; data privacy; licensing; data processing services and technology agreements, including software as a service; processing and outsourcing agreements; merchant credit and debit card acquiring and processing; ATM, gift, payroll and other stored value card programs; money transmission; and remittance processing.

Additionally, we assist clients in the development of Internet-based banking products and services, as well as acquisitions and joint ventures relating to technology and transaction processing and advice on the associated legal issues.

Cash Management and Payment Systems

Chapman provides counsel for a broad array of cash management and payment systems products. We are well-versed in all manner of ACH and wire transfers, preauthorized debit, controlled disbursements, foreign currency, multicurrency, lockbox arrangements, blocked accounts, sweep accounts, positive pay, comprehensive payables, EDI, and similar services for recipients of cash management services. With respect to compliance, we advise on Check 21, Uniform Commercial Code, ACH, contractual, NACHA, credit card association, and debit network/ATM rules and regulations.

Additionally, we help develop “Master Agreements” with product-specific service descriptions for documentation provided to cash management customers, and drafts and revises deposit account and other banking agreements.

Credit Card Lending and Processing

Chapman has extensive experience in the credit card space. We advise on a wide variety of issues related to the issuing, acquiring and processing of debit and credit card transactions and have experience negotiating significant "partnership" marketing agreements with several major banking institutions.

Card Issuance

In the consumer realm, Chapman advises on credit card programs, including account acquisition and disclosure, card holder agreements, credit, collections, customer service and privacy issues, as well as Internet programs. In the commercial arena, we assist issuers in business card programs, including purchasing cards, fleet cards, and travel/entertainment cards. We are well-versed in all aspects of Visa and MasterCard association bylaws, rules and operating regulations and our practice group attorneys have negotiated brand and other forms of agreements between financial institutions and the card associations.

Merchant Acquiring

Chapman drafts and negotiates forms of merchant agreements, operating agreements, agent bank agreements, ISO agreements, and referral arrangements for merchant acquiring. We assist acquirers and ISOs in the start-up and development of merchant acquiring businesses and the purchase and sale of merchant or ISO portfolios, including joint ventures and alliances. Additionally, we counsel clients on risk management and fraud prevention and in connection with merchant and ISO guarantees, reserve accounts, merchant fraud, chargeback, recovery, and collection activity. We also provide legal assistance with enhancement programs such as check guaranty, electronic check and payroll services programs, and in Internet-based acquisition programs.

Litigation

Chapman represents issuers in rate, fee, collection, privacy and marketing practice cases (including class actions). We represent acquirers in disputes related to enforcement of merchant agreements, chargebacks and recoveries, holding of funds, risk management, and collection.

Merchant and ATM Processing

Chapman drafts and negotiates operational agreements for front-end authorizations, debit card sponsorships, check guarantee programs, system customization, payment processing and funds transfers. Sharing our vast knowledge of card association and debit network rules and requirements allows us to help our clients obtain optimum service levels and protections.

Gift Card and Other Stored Value Cards

Chapman helps develop closed-system gift card programs as well as MasterCard and Visa gift card programs available universally for customer use. We oversee the establishment of programs that allow access to funds on stored value cards to client-customer recipients, including those in foreign countries. We also assist clients in offering payroll card options to their corporate customers as a cash management product and to merchant acquirers to offer a stored value product for their merchant customers to access funds represented by processed payment transactions.

Outsourcing and Vendor Service Agreements

Chapman advises on the outsourcing of a wide range of services and technology for banking products, from account origination through collection. We assist clients in the outsourcing of credit, customer service, collection, accounting, treasury, wire transfer, check processing, ATM processing/servicing, and other back-office functions.

Additionally, Chapman regularly reviews, drafts, and negotiates vendor and servicing agreements and documentation with a broad range of companies, including:

• credit bureaus and credit reporting services
• data processors (including FIS, First Data, and Vantiv)
• software licensing arrangements
• technology-related contracts and data and information security providers
• telephone services
• marketing and ancillary services and advertising agencies
• treasury management and payment processing
• debt collection agencies
• brokers/originators/referrals
• other third-party service providers
• servicers of loan portfolios
• merchant agreements and programs

We have also negotiated agreements for phone services, equipment purchase and leasing, check guarantee and electronic check services and all facets of payment systems processing.

Privacy and Cybersecurity

As counsel to many financial institutions providing consumer financial products and services, we are highly attuned to privacy and information security concerns relating to financial products and services and in the arrangements with service providers and other vendors.

With respect to privacy law matters, we provide advice and assistance on:

• privacy provisions of the Gramm-Leach-Bliley law
• privacy notices
• security and safeguarding of non-public personal information
• credit reporting matters and the Fair Credit Reporting Act
• confidentiality, privacy, and data security considerations with respect to fintechs and payment processors
• remediation of data security breach events and related notifications
• compliance with recently enacted California privacy laws and similar new laws in Virginia and Colorado
• select GDPR issues
• Payment Card Industry Security Standards Council requirements (PCI)

With respect to cybersecurity matters, we provide advice and assistance on:

• state-specific and other cybersecurity regulations
• vendor management programs and compliance
• drafting and revising agreements to meet the requirements of applicable law, with a focus on due diligence, institution oversight, service level agreements, auditing, and correction/remediation of missed service levels or defaults

Technology and Payment Processing

Chapman counsels clients in all aspects of technology and payment processing matters. We draft, negotiate, and analyze technology-related contracts for clients, focusing on such critical aspects as data security, risk assessment and mitigation, and legal and regulatory compliance; acquisition and maintenance of hardware; the procurement, licensing, and maintenance of software; software development arrangements; customization; and various types of confidentiality agreements.

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