Decline Recapture Terms and Conditions

These Decline Recapture Terms & Conditions (these “Terms”) constitute a binding and enforceable agreement

1. Definitions.

1.1. “Authorized User” means those employees, contractors, and end users, as applicable, authorized by Merchant or on Merchant’s behalf to use the Portal and the Factoring Services in accordance with this Agreement.

1.2. “Applicable Law” means any and all applicable laws, legislation, by-laws, decisions, notices, statutes, orders, rules (including any rules or decisions of court or any rules from a card or payment scheme), regulations, directives, edicts, schemes, warrants, local government rules, statutory instruments or other delegated or subordinate legislation and any directions, codes of practice issued pursuant to any legislation, voluntary codes, other instruments made or to be made under any statute and codes of conduct and mandatory guidelines (including in all cases those that relate to audit, accounting or financial reporting) and which have legal effect, whether local, national, international or otherwise existing from time to time, together with any similar instrument having legal effect in the relevant circumstances. The term “Applicable Law” shall specifically include any applicable data protection laws, the ROSCA, the Card Network Rules and the PCI DSS, Article 9 to the Uniform Commercial Code, and the Federal Trade Commission Act.

1.3. “Accounts Receivables” shall mean the invoice issued by the Merchant following a failed transaction covering a payment request for delivered merchandise, sales, purchase order or works or services effectively provided.

1.4. “Account Payable” means the Account Receivable approved by OpenPath and assigned by Merchant to the Decline Processor in real-time, following a failed transaction.

1.5. “Card Network Rules” means all rules, regulations and by-laws of the card network, as introduced and amended from time to time, including, if applicable.

1.6. “Chargeback” means a return of money request based on a payment transaction the Customer disputes. For clarity, it includes prevented and auto-resolved disputes made via chargeback prevention services and fraud alert mechanisms such as CDRN, RDR, Ethoca, TC40, SAFE, etc.

1.7. “Chargeback Rate” is the greatest of the following ratios: number of Chargebacks divided number of Account Payables, value of Chargebacks divided value of Account Payables.

1.8. “Confidential Information” means any information in whatever form, whether or not marked as “Confidential” or “Proprietary”, which is or should be reasonably be considered confidential including, without limitation, the terms of this Agreement, and any information relating to processes, practices, products, customer lists, payment transactions processed hereunder, the accounts, finance or contractual arrangements or trade secrets of the other party.

1.9. “Customer” means a person or entity which conducted a sale, purchase order, or other contract obligation with Merchant that created the Account Receivables.

1.10. “Customer Data” means Customer contact information such as name, surname, email, phone number, Customer payment information, credit card number, payment methods details, card holder name, issuing bank name, MID number, MCC code, KYC, data contained in a credit check report, etc. as applicable, shared by Merchant to Flex for the purpose of conducting the Factoring Services or, if applicable independently collected by Flex from the Customer or a credit bureau for the purpose of conducting the Factoring Services.

1.11. “Customer Purchase Price” means the Customer purchase price of each Account Payable, including applicable taxes, shipment fees or other fees. The sale taxes, price, shipping and handling prices are all determined by the Merchant prior to using the Factoring Services.

1.12. “Decline Processor” means the decline processor utilized by OpenPath to process and settle payments in connection with the Factoring Services.

1.13. “Documentation” means any technical and operational manuals and guidelines issued by OpenPath from time to time.

1.14. “Factoring Fees”, also known as the ‘Finance Charge’ means the fees payable by the Merchant to OpenPath applied to the Account Payable including taxes and expenses, all as set forth and agreed between the Parties in the Ordering Documentation.

1.15. “Factoring Services” means the Portal, the Software, the Documentation and any direct or ancillary services provided by OpenPath or the Decline Processor to the Merchant as detailed under Section 2 herein below, including support services.

1.16. “Force Majeure” means, in relation to either party, any event or circumstances beyond the reasonable control of that party including (without limitation) any acts of God, storm, earthquake, fire, flood, war, industrial action, vandalism, non-availability of any part of the network, governmental action, inclement weather conditions, atmospheric conditions and other causes of radio interference, failure or shortage of power or fuel supplies, and the acts or omissions or service failures of banking partners, card or transaction schemes, communications operators, internet service providers or other third parties.

1.17. “Intellectual Property Rights” means any intellectual property rights of any nature, whether registered, registerable or otherwise, including patents, utility models, trademarks, registered designs and domain names, applications for any of the foregoing, trade or business names, goodwill, copyright and rights in the nature of copyright, design rights, rights in databases, moral rights, knowhow and any other  intellectual  property rights subsisting in computer software, computer programmers, websites, documents, information, techniques, business methods, drawings, logos, marketing methods and procedures and advertising literature, including the “look-and-feel” and in each case all rights and forms of protection of a similar nature or having an equivalent or similar effect to any of these that may subsist anywhere in the world, in each case for their  full  term, together with any future rights and renewals or extensions;

1.18. “Interchange Rate” means 2% of the Customer Purchase Price.

1.19. “Merchant Assets” means the assets Merchant integrate with the Software in order to receive the Factoring Services, such as application, e-commerce website, etc.

1.20. “Merchant Account” means an account with a duly authorized credit institution held in the name of the Merchant or a third party nominated by the Merchant (and in each case as approved by OpenPath), used to receive Settlement Amounts from the Decline Processor and pay Fees and other sums due to OpenPath hereunder and from which the Merchant authorizes OpenPath to debit funds pursuant to the ACH Authorization.

1.21. “Merchant Frontend” means any electronic retail sales facility (including any website and mobile or tablet sites or applications) operated by or on behalf of the Merchant (as amended from time to time) through which Customers are able to enter into a sale, purchase order or otherwise.

1.22. “Portal” means the online portal provided by OpenPath which enables the Merchant, or the Authorized Users, to view the information, transactions, Factoring Fees, Settlement Amount, etc. and to submit Refund requests or other actions.

1.23. ​“Merchant Information” means information provided by Merchant during the registration or onboarding of the Portal, including without limitation, contact information, representatives’ names, contact information and billing information associated with the Portal.

1.24. “Ordering Documentation” means one or more of the following: the online term sheet, ordering form, online registration form, portal registration, etc. in which the Parties agree to the commercial terms, such as the implementation date, the calculation of the Factoring Fees, etc.

1.25. “Payment Method” means a payment method available from time to time for executing Transactions, including credit card, debit card, wire transfers, direct debit, etc.

1.26. “PCI DSS” or the “Payment Card Industry Data Security Standard” means any and all compliance requirement provided by the payments industry in order to reduce risks around data protection and security.

1.27. “Refund” means the reimbursement Customer requests related to a given Account Payable. A “Merchant Requested Refund” means a Refund that was approved by Merchant and notified to OpenPath. If for any period of time greater than two weeks the Chargeback Rate is greater than 0.9%, OpenPath will have the right to implement a direct refund mechanism for Customers. A “Customer Requested Refund” means a Refund that was requested by Customers directly to Flex.

1.28. “ROSCA” means the Restore Online Shoppers Confidence Act.

1.29. “Settlement Amount” means the total amount of the Accounts Payables per Settlement Time Period, minus the Factoring Fee, minus Merchant Requested Refunds, minus Customer Requested Refunds, and minus the Chargeback Amount. The Settlement Amount is paid directly by the Decline Processor to the Merchant through the Merchant Account, unless otherwise agreed in writing.

1.30. “Settlement Time Period” means the time window in which Account Payables are recorded for settlement purposes. Its default value is monthly (calendar month), unless otherwise specified in the Ordering Documentation.

1.31. “Software” means OpenPath’s software enabling Merchant to tackle failed payment transactions suffered by their Customer.

2.THE FACTORING SERVICES

2.1. Subject to the terms herein, OpenPath allows Merchant to sell, transfer and assign the Account Receivables to its decline payment processor, (“Decline Processor”), during the Term, in real-time, through the OpenPath platform (the “Platform”).

2.2. OpenPath shall determine, in its sole discretion, among the Account Receivables processed via the Software, which Account Receivable is applicable and eligible for the Factoring Services and assigned as Accounts Payable. OpenPath will collect the Account Payable directly from the Customer, and shall pay the Merchant the Settlement Amount, subject to the terms herein.

2.3. ​OpenPath will issue the credentials granting the Merchant and its Authorized Users access to the Portal providing a dashboard and information regarding the Factoring Services, including support services provided by OpenPath. Merchant hereby agrees to restrict use and access to the Portal only to its Authorized Users on an as-needed basis and ensure that each Authorized User is aware of, and complies with, the terms of this Agreement. The Merchant is solely responsible for all activities in the Portal, an Authorized User or a third party under Merchant’s control, including for maintaining adequate security and control of any credentials used in order to access the Portal, and agrees to notify OpenPath immediately of any unauthorized use. OpenPath will not be held responsible for any unauthorized access by such parties within the Portal. The Merchant is solely responsible to identifying the authentication of all Authorized Users, for approving the access by such Authorized User and for controlling any unauthorized use of the Portal. OpenPath is not responsible for any harm caused by the Authorized Users, including individuals who were not authorized to have access to the Portal but who were able to gain access because credentials were disclosed or any access was not terminated on a timely basis.

3.MERCHANT OBLIGATIONS

3.1. The Merchant shall utilize the Services in accordance with the Terms of Use and shall provide at least a reasonable level of protection of its network infrastructure in order to prevent any compromise to the Portal, the Software or any Customer Data resides therein. The Merchant shall install needed updates and shall comply with reasonable instructions of OpenPath as provided from time to time.

3.2. The Merchant must avoid any act which will prevent or delay the payment of the Account Payable to OpenPath or the fulfillment of the commitments undertaken with the Agreement. Objections and claims like set-off, withholding, etc., which may be attributable to the basic relationship between the Merchant and its Customer shall neither prevent the Merchant from fulfilling its obligations against OpenPath nor delay the execution of such obligations.

3.3. ​The Merchant shall provide OpenPath with an e-signatory authorization in order to provide Merchant with the Factoring Services. By accepting this Agreement, Merchant agrees that any electronic communication satisfies any applicable legal communication requirements, including that such communications be in writing.

3.4. The Merchant shall provide OpenPath and the Decline Processor with the requisite authorization to initiate electronic credit and debit entries to the Merchant bank account designated on Merchant’s ACH Authorization (the “Merchant Account”) in accordance with the terms of this Agreement. Merchant shall enter into and comply with the terms and conditions of an agreement with the Decline Processor if OpenPath advises the same is required for the Decline Processor to process, make or handle transactions contemplated herein. Merchant understands and agrees that the initiation and transmission of each debit and credit will be subject to, and will be made in accordance with, U.S. law and the Operating Rules of the National Automated Clearing House. Merchant represents, warrants, and certifies to OpenPath that the Merchant Account identified on the ACH Authorization: (i) is a business deposit account; (ii) is not used for any personal, family, or household purposes; (iii) is owned by the Merchant for the applicable Account Payable; and (iv) is active, have not been suspended, declined or limited otherwise. Merchant represents and warrants to promptly, without undue delay, notify OpenPath to the extent its Merchant Account was limited.

3.5. Merchant is solely responsible for maintaining accurate Customer Data and ensuring that any such Customer Data being shared through the Services is current and valid. Merchant hereby represents and warrants that all Customer Data shared under this Agreement will be accurate and complete in all material respects.

3.6. The Merchant must:

3.6.1. Inform the Customer of Merchant’s identity (including prominently displaying its registered name and any trading name on the Merchant Frontend) and address of its fixed place of business;

3.6.2. Provide Customers with a confirmation email which includes the (i) terms and conditions of sale including the Merchant’s delivery policy, returns and cancellation policies (which policies shall at all times comply with Applicable Law); (ii) amount due for the transaction including any additional fees, and if subscription based, the amount and periodicity of the subscription charge, date and currency in which, any charges will commence; and (iii) Merchant’s customer service email and telephone contact details;

3.6.3. Provide Customers with the Merchant’s consumer data privacy policy, security capabilities and policy for the transmission of payment card details including a disclosure of sharing or transferring data to third party service providers, such as OpenPath;

3.6.4. Where and if the Customer payment is declined, disclose to Customer the fact that the Account Payable may be assigned to and purchased by the Decline Processor in accordance with the requirements of the Decline Processor;

3.6.5. Provide any other disclosures necessary under Applicable Law or as required by OpenPath or the Decline Processor, and from time to time in order to comply with the Applicable Law; and

3.6.6. By accepting this Agreement the Merchant represents and warrants that Merchant is and will remain in full compliance with all Applicable Laws which apply to its business activity or the relationship with OpenPath or the Decline Processor under this Agreement, and confirms that : (i) it shall not violate, misappropriate or infringe any rights of any third party (ii) it shall not defame or invade the rights of privacy or publicity any rights of any third party; (iii) the business it carries is legitimate and lawful and that it shall not, directly or indirectly, engage, use the Factoring Services or access the Portal, including the provision of Merchant Information and its processing by OpenPath or the Decline Processor, in order to conduct, condone or allow any illegal activity or discriminatory activity based on race, sex, religion, nationality, disability, sexual orientation, or age; (iv) it shall fully cooperate with OpenPath to investigate any suspected illegal, fraudulent, or improper activity on the part of the Merchant, a Customer, or any other third party; (v) the Account Receivables are based on a real commercial relations. Merchant is specifically prohibited from conducting any transaction which did not result from an act between the Merchant and a Cardholder (as defined under the Card Network Rules); (ivi) it shall, perform anti-money laundering checks and controls including performing know-your-customer (‘KYC’) checks on Customers, in accordance with Applicable Law, and will sell the Account Receivable hereunder only after the Customer has been verified and approved by Merchant in accordance with such checks pursuant with applicable satisfaction standards; (vii) it has obtained and shall retain all valid licenses and rights to conduct its business; (viii) it has provided all necessary disclosures, and obtained all necessary consents, permissions and rights, if and to the extent applicable, including the notice that the Account Payable was assigned, permissions and rights to use the Factoring Services and, where necessary, to license to OpenPath, any materials reasonably necessary for the fulfilment of all of its obligations under this Agreement, including any third party licenses and consents in respect of the Merchant Information and any software the Merchant operates; and (xi) it will not engage in potentially deceptive marketing practices.

3.6.7. ​Notwithstanding the above, the Merchant shall not use the Factoring Services for prescription or non-prescription drugs; illegal downloads, content or goods; illegal gambling; goods or services infringing Intellectual Property Rights of a third party; tobacco products, alcohol or firearms; purchase of digital currencies, loading of other e-money accounts; Ponzi schemes or similar fraudulent investment operations; or any goods or services prohibited by Applicable Law.

3.6.8. The Merchant acknowledges and agrees that: (i) OpenPath is not a bank nor a seller, agent or merchant in relation to the Merchant’s services and goods; (ii) Merchant remains solely responsible for the good or services the Customer purchased, including for their shipment, other deliveries, etc.; and (iii) any dispute with Customer or other third party regarding any Merchant goods and service, including the shipment and refunds, is between the Merchant and such Customer or third party, and the Merchant shall indemnify OpenPath in respect of any loss, liability, claim, expenses of any kind (including legal and professional costs) suffered or incurred by OpenPath in relation to such dispute of the Merchant’s goods or services. Notwithstanding the above, OpenPath reserves the right to contact the Customer directly in order to request an alternative payment method and handle Customer Requested Refunds.

3.6.9. OpenPath specifically disclaims any liability for Factoring Services provided or transactions conducted on or through the Factoring Services and the Software, in breach of the above Merchants’ representations and warranties.

4.PAYMENTS

4.1. In consideration of the Factoring Services, OpenPath shall retain the Factoring Fees it is entitled to from the Merchant as outlined under the Decline Recapture Fee schedule and the Decline Processor shall provide merchant with the Settlement Amount.

4.2. The Merchant shall provide OpenPath with complete and accurate information regarding the Merchant Account. The Merchant will notify OpenPath in writing in advance of any change to the Merchant Account (other than general administrative changes).

4.3. The Decline Processor shall withhold any Settlement Amount in the event of any dispute. Once such dispute is resolved, the Decline Processor shall transfer the Settlement Amount (or part of the Settlement Amount, as appropriate) to the Merchant Account.

4.4. Any and all reports, Settlement Amounts, Refunds, etc. and any applicable information are available to the Merchant through the Portal.

4.5. The Factoring Fees are quoted exclusive of value added tax (“VAT”). In case VAT or any other sales tax is or becomes chargeable, OpenPath will add such tax to the amount payable but shall, where required, provide information on the net amount, the amount of tax and the tax rate applied. Further, the currency is set by the Customer location and the Merchant will bear the costs of currency exchange rates, foreign exchange differences, commissions, etc. which shall be applied by OpenPath in its sole discretion.

5.REFUNDS AND CHARGEBACKS

5.1. The Merchant must promptly inform OpenPath of any Merchant Requested Refund and its amount. Merchant Requested Refunds shall be reimbursed to the Customer either by OpenPath or the Merchant. In the event the Account Payable has already been collected, the reimbursement will be processed by the Decline Processor. If not, the reimbursement will be processed by the Merchant, and the related Account Payable amount due by the Customer to OpenPath will be accordingly updated or voided. It is hereby clarified that the Factoring Fees shall be paid and owed to OpenPath including in the event any Refund, for all Account Payable processed via the Factoring Services, irrespective of the fact if the Customer is reimbursed by the Decline Processor or the Merchant.

5.2. For Refunds processed more than 120 days after the date of purchase or for Merchant Requested Refunds processed more than 60 days after the termination of this Agreement (to the extent OpenPath, in its sole discretion, permits any Merchant Requested Refunds following the termination of this Agreement), the terms of this section shall not apply and OpenPath shall have no liability to the Merchant with respect to such Refunds. Without limiting this section, any assistance OpenPath may provide to the Merchant to effect payments to Customer for any Refund for such goods shall be at OpenPath’s sole and absolute discretion.

5.3. ​Merchant shall reimburse OpenPath for any suffered Chargeback. Any reimbursement under this section is calculated as the Customer Purchase Price + a chargeback fee of 35 USD per chargeback (the sum defined as “Chargeback Amount”), unless otherwise defined in the Ordering Documentation.

6.DISCLAIMER

6.1. EXCEPT AS EXPLICITLY SET FORTH IN THIS AGREEMENT, OPENPATH PROVIDES THE FACTORING SERVICES, SOFTWARE AND DOCUMENTATION TO MERCHANT ON AN “AS IS” BASIS, WITHOUT WARRANTIES OR REPRESENTATION OF ANY KIND, AND OPENPATH EXPRESSLY DISCLAIMS ALL WARRANTIES – STATUTORY, EXPRESS, IMPLIED OR OTHERWISE, INCLUDING, WITHOUT LIMITATION, WARRANTIES OF MERCHENTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR ACCURACY. OPENPATH FURTHER DISCLAIMS ANY WARRANTY THAT THE OPERATION OF THE FACTORING SERVICES OR ANY RELATED SOFTWARE WILL BE UNINTERRUPTED OR ERROR-FREE.

7.TERM AND TERMINATION

7.1. This Agreement shall commence upon the Effective Date (as defined under the Ordering Documentation) and will continue until terminated by either party according to this Section (“Term”).

7.2. Either party can terminate this Agreement for convenience giving 30 days written notice to the other party.

7.3. Either party may terminate this Agreement immediately by giving written notice to the other party if: (i) the other party breaches a material provision of this Agreement and fails to cure the breach within ten (10) days after being given written notice thereof; (ii) the other party is judged bankrupt or insolvent, makes a general assignment for the benefit of its creditors, a trustee or receiver is appointed for such party; or any petition by or on behalf of such party is filed under any bankruptcy or similar laws.

7.4. OpenPath may suspend Merchant’s access to the Services, by giving the Merchant written notice if: (i) necessary to protect OpenPath’s rights, Services or Software, against any harm, including but not limited to fraud or malicious activity, reputational or security risk; and (ii) the Merchant is subject to an Insolvency Event; (iii) OpenPath or the Decline Processor is unsuccessful in crediting Merchant’s account designated by the Merchant’s ACH Authorization; and (vi) OpenPath reasonably believes that continuing to process Account Receivables is in breach of Applicable Laws.

7.5. Without derogating from the above, OpenPath or the Decline Processor may withhold or setoff Settlement Amounts (“Setoff Amount”) due to the Merchant in connection with or against amounts which are due or may be due to the applicable party in connection with the Merchant’s material breach of this Agreement, Chargebacks, Merchant Requested Refunds or any illegal or fraudulent conduct.

7.6. Upon termination of this Agreement, Merchant will immediately cease use of the Factoring Services and any outstanding undisputed Fees shall become due and payable.

7.7. Upon the termination of this Agreement any sections which by their nature survive termination, shall survive any termination or expiration of this Agreement.

8.GENERAL

8.1. These Terms are incorporated into the service agreement between the Merchant and OpenPath in respect of, inter alia, the use of the OpenPath Platform (the “Service Agreement”). Any breach by the Merchant under these Terms will constitute a breach under the Service Agreement. All of the terms, provisions and conditions of the Service Agreement are incorporated herein and shall apply to these Terms, including, without limitation, confidentiality, negative covenants, limitation of liability, governing law and miscellaneous provisions. Unless otherwise indicated, all capitalized terms shall have the meanings assigned in the Service Agreement.

8.2. In the event of any conflict between the terms of the Service Agreement and these Terms, if such conflict directly and solely relates to the Factoring Services, then the Terms will prevail. In all other instances, the terms of the Service Agreement will prevail.

Last updated: December 18, 2024