Merchant Services Agreement Template
Create a Merchant Services Agreement for your payment platform in minutes. Covers fees, settlement, chargebacks, security and termination. Download as PDF/ Docx
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A Merchant Services Agreement (often called an MSA, a payment processing agreement, or simply a merchant agreement) is the contract a payment company signs with a business before it starts collecting money on that business's behalf.
It answers the questions that always come up later, in writing and up front. What services are actually being provided? When does the merchant get paid, and after what deduction? Who carries the loss when a customer disputes a charge? How much is held back as security, and for how long? What happens if the merchant gets hacked, or starts processing something it should not be?
Payment companies need this document because money is moving through their licence. If a merchant sells something illegal, breaches card scheme rules, or racks up chargebacks, the provider is the one the regulator and the card schemes come to first. Merchants need it because it is the only place the fees, the settlement timing and the reserve are actually written down.
This merchant services agreement template turns a long, expensive-to-draft contract into a guided set of questions. Fill in your company, your merchant, your fees and your service levels, and the finished agreement is generated instantly, ready to download as PDF or Word and sign.
Who this template is for
- Payment service providers, gateways and aggregators onboarding new merchants and needing one consistent contract for every account.
- Fintech startups launching collections, payouts or card acquiring and putting merchant paperwork in place for the first time.
- Banks and licensed institutions offering merchant acquiring alongside their core products.
- Merchants and finance teams who have been sent an agreement to sign and want a plain reference for what each clause normally says.
What the agreement covers
The template follows the structure a real payment company uses, with 22 numbered clauses plus a services schedule and two appendices.
- The commercial basics: who the parties are, what services are provided, and how the agreement can be supplemented over time.
- A full definitions table, so terms like Acquirer, Card Scheme Rules, Chargeback, Payment Date and Merchant Bank Account mean the same thing throughout.
- Set-off and fraud prevention, letting the provider net off what it is owed and pause suspicious transactions.
- Merchant representations and warranties, covering good standing, licences, correct use of the API, and compliance with anti-money laundering rules.
- Cybersecurity, security breaches and a right to audit, including who pays for the audit and what happens after an incident.
- Intellectual property and confidentiality, with a survival period you choose.
- Limitation of liability and indemnity, with a liability cap tied to fees paid in a period you set.
- Term and termination, including automatic renewal, a cure period for breach, and the specific events that let a provider suspend immediately.
- Notices, force majeure, assignment, and governing law with your choice of court or arbitration.
- A signature block for two authorised signatories on each side.
The schedule and appendices
- Schedule 1 (Services) sets out how the services work in practice: the settlement account, how fees are recovered, the rolling reserve or security deposit, the full chargeback and refund process with thresholds and deadlines, and the extra card data rules that apply to card acquiring.
- Appendix A (Fees and Pricing) is a table you build row by row. Add a line for every fee you charge, whether that is collections, payouts, settlement, chargebacks, refunds or security deposit tiers.
- Appendix B (Service Level Agreement) covers support hours, your escalation contacts, response and resolution targets by priority, and the chargeback timelines merchants have to work to.
How to create your merchant services agreement
1. Open the template and click Generate.
2. Answer the guided questions about the two companies, the services, and the commercial terms. Most of the timing and threshold questions come pre-filled with standard market values, so you can accept them and move on.
3. Build your fee table in Appendix A by adding one row per fee, then add your support contacts and priority levels for the service level agreement.
4. Review and download as PDF or Word, then send it for signature.
Disclaimer: This template is provided for convenience and general information only and is not legal advice. Payment services are a regulated activity, and the terms a provider may lawfully impose vary by country and by licence. Have the finished agreement reviewed by a qualified lawyer in your jurisdiction before you use it with real merchants.
- Professional formatting and layout
- Easy customization with guided questions
- Multiple export formats: pdf, docx
- Legally reviewed and compliant
- Instant download after generation
What is a merchant services agreement?
It is the contract between a payment company and a business it processes payments for. It sets out what services are provided, what the business is charged, when it gets paid, how much is held back as security, who carries the loss on a disputed transaction, and what happens if either side wants out. You will also see it called a payment processing agreement, a merchant agreement, or simply an MSA.
Who needs this template?
Mainly payment service providers, gateways, aggregators and fintechs that need one consistent contract to onboard merchants. Banks offering merchant acquiring use the same structure. It is also useful from the other side: if you have been sent a merchant agreement to sign, this template shows what each clause normally says, so you can see where yours differs.
What is a rolling reserve, and why does the agreement have one?
A rolling reserve is a percentage of each settlement that the provider holds back for a set period instead of paying out immediately. It exists because chargebacks arrive weeks or months after a transaction, long after the merchant has been paid. The reserve makes sure there is money available to cover them. In this template you choose the percentage and the holding period, so you can set a lower reserve for a low-risk merchant and a higher one for a risky category.
Who pays when a customer disputes a transaction?
The merchant does. Section E of Schedule 1 makes the merchant responsible for reimbursing the provider for chargebacks, even where the merchant is not legally at fault for the goods or services. The provider can recover it from the next settlement, from the wallet balance, from the reserve, or by invoice. The merchant also has to respond to a dispute within a set number of hours, or it is decided against them automatically.
What is the chargeback threshold and what happens if a merchant goes over it?
It is the maximum share of a merchant's transactions that may end in a chargeback or refund, commonly 0.5% or 1%, measured over a rolling window. Card schemes monitor this and fine acquirers whose merchants breach it. If a merchant goes over, the agreement lets the provider shift the resulting liability onto the merchant or stop providing the services altogether. You set both the threshold and the monitoring window in the template.
How do I fill in the fee schedule?
Appendix A is a table you build row by row. Add one row per fee, with a category, a description, the fee type and the amount. Group related rows under the same category, for example several rows under "Payins and collections" and several under "Chargebacks". Put your security deposit tiers in the same table with a "Security deposit" category. Anything that does not fit a row, such as how volume tiers are measured, goes in the notes field underneath.
Do I have to fill in the service level agreement?
It is worth doing. Appendix B is where support hours, escalation contacts and response targets are written down, and it is the part merchants read most closely during procurement. Add one row per escalation level and one per priority band. Set targets you can genuinely hit, because once signed they are contractual commitments rather than aspirations.
How long does the agreement run, and how does either side get out?
It runs for an initial term you choose, then renews automatically for successive periods unless one side gives notice before the term ends. Either side can terminate immediately for a material breach that is not fixed within the cure period, or on insolvency. The provider has a longer list of immediate suspension and termination triggers in Clause 16.3, covering things like unreasonable chargeback levels, suspected fraud, and breaches of card scheme rules.
Is the provider's liability limited?
Yes, and heavily. Clause 13 excludes indirect and consequential loss, lost profit, goodwill and reputational damage, and caps total liability at the fees the merchant paid during a period you set, commonly the twelve months before the claim. It does not exclude liability for death or personal injury, or anything else that cannot lawfully be excluded. Merchants reviewing an agreement should read this clause alongside the indemnity in Clause 14, which runs the other way.
Can I use this agreement in any country?
The structure is portable, and you choose the governing law, the dispute forum, the card schemes and the country whose banking days apply. What does not travel is the regulatory position. Payment services are licensed activity, and rules on reserves, settlement timing, data retention and consumer rights differ a great deal between countries. Treat the template as a strong starting draft and have a lawyer in your jurisdiction review it before you use it with real merchants.
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