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Electronic Payments Law

The electronic payments industry is complex and continually evolving. In today’s click-of-a-button society, technology drives commerce and innovative payment methods. Payment laws and regulations are equally as complex and are also ever-changing.

Whether you are an established payments business or a business that offers payments as a feature of a non-payments core offering, our payments lawyers have the knowledge and experience to guide you through the murky regulatory landscape and advise you on crucial contractual relationships.

Jaffe’s electronic payments attorneys have decades of experience with legal issues surrounding credit and debit card processing, merchant acquiring, money transmission, prepaid access, virtual wallets, mobile payments, ACH, and payment facilitation.  Payments law is what we do.

Advising on Regulatory Compliance and Payment Operations

It is imperative for payment providers to assess their legal and regulatory exposures so they can understand the risks and make critical business decisions. Often, operations can be restructured to mitigate the regulatory risks. Other times, exemptions to the regulatory burden can be utilized. 

There is no one-size-fits-all solution that works for every payment provider or every transaction flow.  Our lawyers are experienced in identifying potential exposures and advising clients on how to mitigate such risks, solve problems, and take maximum advantage of strategic opportunities to find a solution that is right for each client’s business goals.

Counseling on Strategic Relationships and Contracts

Payment related contracts and transactions are unique and require industry-specific provisions and considerations.  Whether it’s advising companies on the acquisition or sale of payments companies or assets, or drafting, reviewing or negotiating high-stake agreements for merchant acquirers, payment facilitators, Independent Sales Organizations (ISOs), processors, gateways, independent software vendors (ISVs), value-added resellers (VARs) or sales agents, the Jaffe team has the industry know-how to ensure the business and legal concepts are aligned.

Navigating Legal Disputes

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

Impacting the Payments Industry

Steeped in the business, our electronic payment lawyers are frequently asked to write for industry publications, serve on national panels, and provide leadership as committee members and officers of industry trade associations (including the Electronic Transactions Association (ETA), Wnet (Women’s Network in Electronic Transactions), Third Party Payment Processors Association (TPPPA) and the Money Services Business Association (MSBA)). We counsel both large and small clients on legal issues, as well as on strategic alliances, mergers and acquisitions, and corporate direction.

These contributions and connections give our payments team unique insight into the changing dynamics and emerging issues in the industry.

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  • Federal and state money services business (MSB) and money transmitter regulatory compliance
  • Agent-of-the-payee exemption
  • Payment processor exemption
  • Integral to sale of good or services exemption
  • Authorized vendor exemptions
  • Bank Secrecy Act compliance (including Anti-Money Laundering (AML) programs)
  • Financial Crimes Enforcement Network (FinCEN) regulations and guidance
  • BIN Sponsor Agreements
  • Referral Agent Agreements
  • Payment Facilitator Sponsorship Agreements
  • Integration Agreements
  • Processing Agreements
  • Merchant Agreements
  • Sub-Merchant Agreements
  • ACH Origination Agreements
  • Third Party Service Providers/Sender Agreements
  • Mergers and acquisitions of payment businesses
  • Sale of merchant portfolios and other payment assets
  • Sale of residual income streams
  • Prepaid access
  • State escheat laws
  • Surcharges, convenience fees, cash-discount programs
  • Electronic Funds Transfers – Regulation E
  • Truth in Lending – Regulation Z
  • Remittance Transfer Rule – subpart B of Regulation E
  • Federal Trade Commission Act (FTC) regulations
  • Consumer Financial Protection Bureau (CFPB) regulations
  • Sate consumer privacy acts and data security laws
  • Card brand compliance
  • ACH processing and NACHA compliance
  • Mobile payments
  • Digital Wallets
  • Virtual Currency
  • Cannabis, CBD, and Hemp related payment processing

Representative Matters

Advising on Regulatory Compliance and Payment Operations: Recent Matters

  • Advised payment facilitator regarding money transmission regulations and ways to restructure flow of funds to reduce regulatory exposure.
  • Advised payment processor regarding qualification of federal payment-processor exemption and agent-of-the-payee exemption to certain states’ money transmission regulation.
  • Advised payment processor regarding the structure of a surcharging program consistent with Card Brand rules and relevant state laws.
  • Advised merchant with nation-wide operations on the implementation of a compliant cash-discount program.
  • Represented payment gateway on state and federal compliance matters to reduce risk of non-compliance.
  • Advised P2P remittance provider on anti-money laundering (AML) compliance obligations.

Counseling on Strategic Relationships and Contracts: Recent Matters

  • Represented large ISO in the negotiation of bank sponsorship agreement.
  • Represented an acquiring sponsor bank on BIN sponsorship and compliance matters.
  • Represented private equity company on multi-hundred-million dollar transaction for the purchase of a payment company.
  • Represented a VC-backed merchant acquirer in multiple acquisitions of ISO companies.
  • Represented payment processor in negotiation of bank sponsorship and referral relationship.
  • Represented an ISV in the medical merchant vertical to obtain a payment facilitator sponsor arrangement.
  • Served as outside general counsel to an ATM network and merchant acquiring companies.

Litigation and Regulatory Enforcement: Recent Matters

  • Represented an ISO in litigation with an agent regarding the calculation of residuals.
  • Represented an ISO in suit against an agent regarding amounts owed for a sold portfolio.
  • Appealed a compliance assessment imposed by a card brand when a bank suffered losses due to a merchant’s data breach.
  • Advised 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.
  • Counseled a gateway on its response to a state Attorney General’s inquiry about merchant online tobacco sales.
  • Represented a bank against a merchant disputing its placement on MATCH.
  • Represented an ISO in litigation against an agent that solicited and moved merchants in violation of the non-solicitation restrictions in the agreement.


Electronic Payments Law

Electronic Payments Law


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Third-Party Senders: Are you a Money Transmitter?

      As a corporation that handles ACH transactions on behalf of others, you may have heard your financial institution refer to you as a “Third-Party Sender.” Common examples of Third-Party Senders include payroll processing companies, rent payment companies, and other bill pay providers. If an entity is designated as a Third-Party Sender, it ...

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Jaffe Attorneys Recognized as 2021 “Michigan Rising Stars”

SOUTHFIELD, Mich., Aug. 25, 2021 – Jaffe Raitt Heuer & Weiss, P.C., a full-service business law firm, announced today that 14 of the firm’s attorneys were recognized on the 2021 “Michigan Rising Stars” list by Super Lawyers®. Jaffe CEO Jeffrey M. Weiss made the announcement. “We are fortunate to routinely attract and retain young talent ...

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July 23, 2021

Aisha Hall Joins Jaffe Raitt Heuer & Weiss, P.C.

SOUTHFIELD, Mich., July 22, 2021 — Aisha Hall has joined the Southfield office of Jaffe Raitt Heuer & Weiss, P.C. as an associate in the electronic payments practice group. Jaffe CEO Jeffrey M. Weiss made the announcement.  Hall has a specialized background in payments and regulation as well as a deep understanding of auditing and ...

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