How do you review Payment Systems contracts?

1 Know your needs

Before you sign a payment systems contract, you should have a clear idea of what your business needs from a PSP. Consider factors such as the payment methods you accept, the currencies you deal with, the markets you serve, the security standards you require, and the integration options you prefer. You should also estimate your monthly and annual transaction volumes, as well as your average ticket size. These factors can affect the pricing, features, and service levels of different PSPs.

2 Compare offers

Once you have identified your needs, you should compare the offers from different PSPs and evaluate them based on your criteria. When reviewing payment systems contracts, be sure to look into the pricing structure and fees, including setup, monthly, transaction, chargeback, refund, cross-border, currency conversion, and termination fees. Additionally, assess the service level agreement (SLA), which defines the availability, performance, reliability, and support of the PSP's platform and services. Furthermore, consider the payment processing terms such as the settlement time, payout frequency, reserve policy, fraud prevention, dispute resolution, and refund policy. Moreover, make sure to review the compliance and security requirements like the data protection, encryption, authentication, and certification standards that the PSP follows and expects from you. Lastly, don't forget to examine the contract duration and renewal terms such as the minimum commitment period, the notice period, the cancellation procedure, and the penalties for early termination.

3 Negotiate terms

After comparing offers, you may find that some PSPs are more flexible and willing to negotiate the terms of their payment systems contracts than others. You can use this opportunity to ask for clarifications, adjustments, or discounts that suit your business needs and goals. For example, you can negotiate for lower fees, faster payouts, higher service levels, or more features. You can also request for a trial period, a free setup, or a waiver of termination fees. However, be realistic and respectful in your negotiations, and avoid making unreasonable demands or threats.

4 Review clauses

Before you finalize and sign a payment systems contract, you should review all the clauses carefully and make sure you understand and agree with them. Pay special attention to the clauses that may affect your rights, obligations, or liabilities. For instance, the indemnification clause states that you will compensate the PSP for any losses or damages caused by your breach of contract, negligence, or misconduct. Additionally, the limitation of liability clause states that the PSP's liability for any losses or damages caused by their breach of contract, negligence, or misconduct is capped at a certain amount or percentage. The force majeure clause outlines that the PSP is not liable for any failures or delays in providing their services due to events beyond their control. Lastly, the dispute resolution clause specifies how and where any disputes or claims arising from the contract will be resolved.

5 Seek advice

Finally, if you have any doubts or questions about the payment systems contract, you should seek advice from a professional, such as a lawyer, an accountant, or a consultant. They can help you understand the legal, financial, and operational implications of the contract, and advise you on the best course of action. They can also help you draft, review, or amend the contract, or represent you in case of a dispute or claim.

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?