Paytech and Payment Systems

Paytech and Payment Systems

In today’s digital universe, technology continues to drive connected commerce and innovative payment solutions. Companies involved in electronic payments need legal counsel with the resources and experience to help them navigate the competitive and evolving landscape, both efficiently and cost-effectively.

Whether you are established in electronic transactions or offering payments as a feature of a non-payments core offering, Taft attorneys have the knowledge and experience to guide you through the regulatory landscape and advise you on crucial contractual relationships.

We are nationally recognized for our decades of experience with legal issues surrounding credit and debit card processing, Fintech, merchant acquiring, money transmission, prepaid access, virtual wallets, mobile payments, cryptocurrency, Automated Clearing House (ACH), and payment facilitation.

Regulatory Compliance and Payment Operations

Payment providers need to evaluate their legal and regulatory exposure to assess risks and make critical business decisions. There is no one-size-fits-all solution for every payment provider or transaction flow. Our attorneys are experienced in working with clients to identify problems, mitigate risk, and take maximum advantage of strategic opportunities and solutions tailored to business goals.

Strategic Relationships and Contracts

Payment-related contracts are unique and require industry-specific provisions and considerations. We advise clients on a multitude of matters, such as:

  • Acquisition and sale of payment company assets.
  • Drafting, reviewing, and negotiating high-stake sponsorship and commercial agreements.
  • Independent Sales Organizations (ISOs).
  • Payment Facilitators.
  • Independent software vendors (ISVs).
  • Value-added resellers (VARs) or sales agents.

Litigation and Regulatory Enforcement

We work with clients to proactively identify litigation and enforcement risks before they manifest. Where unavoidable, our team is uniquely suited to litigate regulatory enforcement actions involving payment-related issues. We also regularly advise clients on pre-litigation issues, such as violations of non-solicitation restrictions, imposition of reserve requirements, suspicious merchant activity, and minimum processing requirements.

Our clients regularly seek our counsel on a variety of payment needs, including:

  • ACH processing and NACHA compliance.
  • Bank Secrecy Act compliance (including Anti-Money Laundering (AML) programs).
  • BIN Sponsor Agreements.
  • Cannabis, CBD, and Hemp related payment processing.
  • Card brand compliance.
  • Consumer Financial Protection Bureau (CFPB) regulations.
  • Digital Wallets.
  • Electronic Funds Transfers – Regulation E.
  • Federal and state money services business (MSB) and money transmitter regulatory compliance.
  • Exemptions to money transmission laws including: agent-of-the-payee, payment processor, integral to sale of good or services, and authorized delegate exemptions.
  • Federal Trade Commission Act (FTC) regulations.
  • Financial Crimes Enforcement Network (FinCEN) regulations and guidance.
  • Integration Agreements.
  • Merchant and Sub-Merchant Agreements.
  • Mergers and acquisitions of payment businesses.
  • Mobile payments.
  • Payment Facilitator Sponsorship Agreements.
  • Prepaid access.
  • Processing Agreements.
  • Referral Agent Agreements.
  • Remittance Transfer Rule – subpart B of Regulation E.
  • Sale of merchant portfolios, residual income streams, and other payment assets.
  • Sate consumer privacy acts and data security laws.
  • State escheatment laws.
  • Surcharges, convenience fees, cash-discount programs.
  • Virtual, digital, and crypto currencies.

Our attorneys regularly publish articles to our Paytech & Payment Systems Insights blog, highlighting trends and developments in this evolving area of law.

Related Practices

Related Industries

Notable Matters

Regulatory Compliance and Payment Operations

Our Paytech and Payment Systems attorneys have extensive experience navigating various regulatory issues across multiple jurisdictions, including:

  • Advising payment facilitators regarding money transmission regulations and ways to restructure flow of funds to reduce regulatory exposure under state and federal law.
  • Advising payment processors regarding qualification of federal payment-processor exemption and agent-of-the-payee exemption to certain states’ money transmission regulation.
  • Advising payment processors regarding the structure of a surcharging program consistent with Card Brand rules and relevant state laws.
  • Advising merchants and providers on the implementation of a compliant cash-discount program.
  • Representing payment gateways on state and federal compliance matters to reduce risk of non-compliance.
  • Advising remittance providers and money transmitters on anti-money laundering (AML) compliance obligations.

Strategic Relationships and Contracts

Our attorneys routinely negotiate complex payment agreements and understand the business nuances of the payments industry allowing them to effectively protect our clients’ interests. Our extensive contract experience includes:    

  • Representing processors, payment facilitators, and ISOs in the negotiation of bank sponsorship agreements and downstream agreements.
  • Representing acquiring sponsor banks on BIN sponsorship agreements and compliance matters.
  • Representing private equity companies on several multi-hundred-million-dollar transaction in connection with various asset and equity acquisitions of payment companies.
  • Representing payment companies in the sale of their business or payment-related assets.
  • Representing ISVs in various merchant verticals in connection with their entry into the payments industry through payment facilitator sponsor arrangements or “pay-fac lite” models.
  • Serving as outside general counsel to various payment companies including an ATM network, payment processors, and merchant acquiring companies.

Litigation and Regulatory Enforcement

Our attorneys understand that the best defense is a good offense. Our payment attorneys have decades of experience navigating payment-related disputes and can effectively mitigate exposure points before they materialize.  But in those cases where litigation is necessary, our team of payment litigators have the gravitas to get the job done and have handled a wide range of disputes including:

  • Representing ISOs in litigation with agents regarding the calculation of residuals and violations of non-solicitation restrictions.
  • Representing an ISO in suit against an agent regarding amounts owed for a sold portfolio.
  • Appealing a card brand compliance assessment imposed against an acquiring bank due to a merchant’s data breach.
  • Advising an ISO concerning the appropriate response to a Federal Trade Commission (FTC) asset freeze on merchant accounts and compliance with a demand for the production of documents.
  • Counseling a gateway on its response to a state Attorney General’s inquiry about merchant online tobacco sales.
  • Representing a bank against a merchant disputing its placement on MATCH.

All Paytech and Payment Systems Professionals

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