Scratchpay Payment Services Agreement


Scratchpay Payment Services Agreement

Last updated:  December 22, 2020

This Scratchpay Payment Services Agreement for U.S. Providers (this "Agreement") is a legal and binding agreement between Scratch Financial, Inc. ("Scratchpay," "we," "our," or "us"), and you, as a customer of Scratchpay's payment services ("Provider," "you," or "your"). Scratchpay utilizes its payment platform to allow you to accept payments from your customers ("Clients") for the purchase of goods and/or services provided by you (the "Payment Services").

By using the Payment Services, you agree to be bound by the terms of this Agreement and any other terms, policies and guidelines applicable to the Payment Services as presented to you. We utilize third-party providers to provide certain aspects of the Payment Services (“Agents”), and you may be required to agree to those Agents’ terms of service, as further described in this Agreement. By entering into this Agreement, you are also entering into, and agreeing to be bound by, our Program Agreement for US Providers, which is incorporated by reference herein. Information you provide to Scratchpay is governed by our Privacy Policy. To learn more about our privacy practices, please see our Privacy Policy for Providers.


1.1. Scratchpay Account. To access and use the Payment Services, you must open and maintain an account with Scratchpay (“Scratchpay Account”). You can view transactions and manage other aspects of the Payment Services through your Scratchpay Account. You must comply with any Scratchpay Account licenses and operating requirements when accessing and using your Scratchpay Account. You are responsible for the security and confidentiality of your login credentials to the Scratchpay Account, and you are liable for all access and use of your Scratchpay Account, including any use of the Payment Services under your Scratchpay Account.

Except as required by law, you are solely responsible for reviewing and retaining records of all transactions and other data associated with your Scratchpay Account and your use of the Payment Services. If you believe that there is an error or unauthorized activity on your Scratchpay Account or in connection with your use of the Payment Services, you must contact us immediately.

1.2. Linked Bank Account. In order to receive Settlement of Client payments (as described in Section 2), you must link a verified bank account to your Scratchpay Account ("Linked Bank Account"). You authorize Scratchpay to (a) initiate credit entries (including Settlements) and to initiate, if necessary, debit entries and adjustments for any erroneous credit entries, to the Linked Bank Account, and (b) initiate debit entries (as authorized under this Agreement) and to initiate, if necessary, credit entries and adjustments for any erroneous debit entries, to the Linked Bank Account. Provider agrees not to dispute any credits or debits with its bank for any transfers authorized under this Agreement.

1.3. Agents. The Payment Services, in part, rely on our Agent, Stripe, and are subject to the Stripe Connected Account Agreement, which includes the Stripe Terms of Service (collectively, the “Stripe Services Agreement”). By accepting payments through the Payment Services, you agree to be bound by the Stripe Services Agreement, as the same may be modified by Stripe from time to time. As a condition of Scratchpay enabling the Payment Services, you agree to provide Scratchpay accurate and complete information about you and your business, and you authorize Scratchpay to share such information and other information related to your use of the Payment Services to Stripe. Payment Services are governed by the payment network applicable to the transaction, including American Express, Discover, MasterCard, Visa and NACHA (“Payment Networks”), under their respective rules, regulations, bylaws and other requirements (“Payment Network Rules”). Your obligations under this Agreement do not replace or supersede any obligation you have under the Stripe Services Agreement or other Agent’s terms of service that apply to your use of the Payment Services.

Scratchpay is not a bank and does not offer banking services. Scratchpay does not hold or own settlement funds; transmit, receive, take possession of or hold settlement funds for transmission; nor does it advertise, solicit or hold itself out as receiving money for transmission.

1.4. Provider Fees. You agree to pay all applicable charges and fees ("Provider Fees") for use of the Payment Services, as set forth in the attached Pricing Schedule. Except as otherwise stated, Provider Fees are calculated at the time a transaction is processed and deducted from your Settlement. Scratchpay may change the Provider Fees at any time by notifying you prior to such change. You will not impose or otherwise require Client to pay for any part of any Provider Fee or other charge assessed by Scratchpay to you, whether through any surcharge, additional fee or increase in the price or goods or services. You agree and acknowledge that Scratchpay may charge its own fees directly to the Clients for its services.

1.5. Identity Verification. At the time you sign up for the Payment Services, and upon Scratchpay’s request thereafter from time to time, you agree to provide Scratchpay and its Agents with all information, including your financial statements (collectively, “Provider Information”), reasonably necessary for Scratchpay or an Agent to verify your information, including your identity, status, financial standing or other requirements for your use of the Payment Services. You further authorize Scratchpay or Agents to request information about you, including a consumer report that contains your name and address, from third parties. Scratchpay or its Agents may periodically obtain additional reports to determine whether you continue to meet the requirements for a Scratchpay Account and use of the Payment Services. Scratchpay will treat Provider Information as Provider’s Confidential Information in accordance with this Agreement; provided, however, that you authorize Scratchpay to share information about you, including your information about your application (including whether you are approved or declined), from third parties and about your Scratchpay Account and transactions made through the Payment Services, with our Agents, or as otherwise specified in our Privacy Policy for Providers. You further authorize Agents to share information with us about you and your transactions with such Agents, in order for us to provide the Payment Services to you, service your Scratchpay Account (including to make transaction information available to you in your Scratchpay Account), and market related products and services.

1.6. Requests for Additional Information and Inspection. Scratchpay and our Agents may request additional information from you at any time. For example, Scratchpay may ask you to present invoices from your suppliers, a government issued identification such as a passport or driver's license, a business license, or other information. Scratchpay may also ask for permission to inspect your business location. If you refuse any of these requests, your access to the Payment Services may be suspended or terminated.

1.7. Changes to Payment Services. Scratchpay may, from time to time, make changes to Scratchpay Accounts or the Payment Services, including any feature, functionality or payment method. We will provide prior notice of such changes where reasonably possible, but may make changes without notice in some cases, including emergencies or to comply with law, Payment Network Rules or government authorities.


2.1. Settlement. Client payments will be settled to your Linked Bank Account, less any applicable Provider Fees (as defined in Section 1.4), Chargebacks (as described in Section 2.2), and any other amounts that we are authorized to withhold under this Agreement ("Settlement"). The timing and other conditions of Settlement are subject to the Agent's terms of service, if any, and the Payment Network Rules applicable to the transaction.

2.2. Chargebacks. (a) In the event a Client contests a transaction, whether as an unauthorized charge, due to a dispute with you regarding provision of any good or service (including the delivery or non-delivery, or performance or non-performance, of goods or services), or for any other reason, the amount of the transaction may be reversed or charged back to your Scratchpay Account (a "Chargeback"). For any transaction that results in a Chargeback, we or our Agent may withhold the Chargeback amount from Settlement, as well as any associated Provider Fees, fines, or penalties assessed by a Payment Network or the Agent. Further, if we reasonably believe that a transaction is likely to result in a Chargeback, we or our Agent may withhold the amount of the potential Chargeback from Settlement until we or the Agent has determined that a Chargeback will not occur for that transaction.

(b) You are solely responsible for any Chargebacks that arise from your use of the Payment Services, including any obligation to dispute the Chargeback under an Agent's terms of service (including the Stripe Services Agreement). Without limiting the foregoing, we will provide reasonable assistance to you in contesting a Chargeback, provided that you cooperate in investigating the Chargeback and provide us within five (5) days upon our request, sufficient evidence (in our reasonable determination) that adequately refutes the Chargeback. Such evidence may include your records of the description of the good or service as provided to Client; receipts indicating Client's authorization to purchase the good or service; and/or records of successful delivery or completed performance of the good or service. Failing to cooperate or provide information in a timely manner may result in the Chargeback being resolved against you.

(c) You agree that we may share information about your transactions, including a Chargeback, with a Client, the issuer of the Client's payment method or the relevant Agent, in order to investigate and/or mediate a Chargeback. If the Chargeback is resolved in your favor, the corresponding funds will be released to you with the next Settlement. If a Chargeback dispute is not resolved in your favor or you choose not to contest the Chargeback, we may retain or recover the Chargeback amount and any associated Provider Fees as described in this Agreement.

(d) If we believe you might incur, or you are incurring, an excessive amount of Chargebacks, we may establish additional conditions governing your use of the Payment Services, including (i) revising or establishing new Fees, (ii) requiring you to create a Reserve Account, (iii) delaying Settlement, or (iv) terminating or suspending your access to the Payment Services.

(e) If we are unable to recover funds related to a Chargeback for which you are liable, you agree to pay us the full amount of the Chargeback immediately upon demand. You agree to pay all costs and expenses, including attorneys' fees and other legal expenses, incurred by us for the collection of all amounts unpaid by you.

2.3. Refunds. You agree to (a) maintain fair and legally compliant refund, return and/or exchange policies, (b) post such policies in a clear and conspicuous manner at the point-of-sale or other location that is clear and readily noticeable before Client completes a purchase, and (c) comply with such policies with respect to any purchase that is paid for using the Payment Services.

If Client is eligible for a refund from you (including as a result of a reduction in the purchase price) in connection with a purchase paid for using the Payment Services, you agree to process the refund (including for returns and adjustments) through your Scratchpay Account. You may not offer cash or any other form of refund except as permitted by us or the Payment Network Rules.

The amount of the refund must include any associated taxes required to be refunded and cannot exceed the amount shown as the total on the original sales receipt. If your refund policy prohibits returns or is unsatisfactory to the Client, be aware that you can still receive a Chargeback relating to the transaction.

If the funds available in your Scratchpay Account are insufficient to cover a refund, we may exercise any of our rights set forth in Section 6, including withdrawing the refund amount from your Linked Bank Account or any Reserve Account, or withholding the refund amount from your next Settlement.


3.1. Payment Network Rules. You acknowledge that your transactions are governed by applicable Payment Network Rules, and you agree to comply with the Payment Network Rules as applied to you as the seller of goods and services, including requirements for the use of Payment Network Marks, acceptance of payment methods, and provision of receipts. You further acknowledge that the Payment Networks can and do amend their Payment Network Rules at any time, and that Scratchpay and our Agents may be required to change the terms of this Agreement or the Agent's terms of service to comply with such amendments to the Payment Network Rules.

3.2. Payment Network Logos and Marks. Your use of Payment Network logos and marks ("Payment Network Marks") is governed by the Payment Network Rules. The Payment Networks are the sole and exclusive owners of their respective Payment Network Marks. You will not contest the ownership of the Payment Network Marks, and any Payment Network may prohibit you from using its Payment Network Marks for any reason and at any time. Scratchpay may require you to make modifications to your website or other advertising and signage in order to comply with Payment Network Rules related to the Payment Network Marks.

3.3. PCI Compliance. The Payment Services are intended to allow you to process payments without the need for Providers to collect or store sensitive payment method information. However, if you store, process or transmit a Client's payment method information, you will comply with all applicable payment method security requirements, including the Payment Card Industry Data Security Standards (PCI-DSS) and any other security requirements under the Payment Network Rules.

3.4. Customer Service. You are solely responsible for all customer service and issues relating to your goods or services, including pricing, order fulfillment, cancellations or no shows by you or a Client, returns, refunds and adjustments, rebates, functionality and warranty, technical support, and feedback concerning experiences with your personnel, policies or processes.

3.5. Taxes. You are responsible for determining any and all taxes assessed, incurred, or required to be collected, paid, or withheld for any reason for your use of the Payment Services ("Taxes"). You are solely responsible for collecting, withholding, reporting, and remitting correct Taxes to the appropriate tax authority. We are not obligated to, nor will we determine whether Taxes apply, or calculate, collect, report, or remit any Taxes to any tax authority arising from any transaction. Scratchpay specifically disclaims any liability for Taxes. To the extent required by law, Scratchpay or the Agent will report information about you and your use of the Payment Services to the IRS or other taxing authority.


4.1. Prohibited Use. You may only use the Payment Services for the sale of goods and/or services to Clients in your normal course of business, as disclosed to and approved by Scratchpay.

Without limiting the foregoing, you may not use the Payment Services for any of the following businesses or business activities: (a) any illegal activity or goods, (b) paraphernalia that may be used for illegal activity, (c) buyers or membership clubs, including dues associated with such clubs, (d) credit counseling or credit repair agencies, (e) credit protection or identity theft protection services, (f) direct marketing or subscription offers or services, (g) infomercial sales, (h) internet/mail order/telephone order pharmacies or pharmacy referral services (where fulfillment of medication is performed with an internet or telephone consultation, absent a physical visit, including re-importation of pharmaceuticals from foreign countries), (i) unauthorized multi-level marketing businesses, (j) inbound or outbound telemarketers, (k) prepaid phone cards or phone services, (l) rebate based businesses, (m) up-sell merchants, (n) bill payment services, (o) betting, including lottery tickets, sports related gambling, casino gaming chips, off-track betting, and wagers at races, (p) manual or automated cash disbursements, (q) prepaid cards, checks, insurance or other financial merchandise or services, (r) sales of money-orders or foreign currency, (s) high-risk products and services, including telemarketing sales, (t) automated fuel dispensers, (u) adult entertainment oriented products or services (in any medium, including internet, telephone, or printed material), (v) sales of (i) firearms, firearm parts or hardware, and ammunition; or (ii) weapons and other devices designed to cause physical injury (w) internet/mail order/telephone order of age restricted products (e.g., tobacco), (x) collection of preexisting debt, (y) hate or harmful products, or (z) escort services.

4.2. Suspected Fraud, Illegal Transactions, Harm. We or our Agents may refuse to process a transaction or withhold Settlement, if we or the Agent believe that the transaction is in violation of this Agreement, applicable law, any other agreement with Scratchpay, or that it exposes you, Clients, other Scratchpay Providers, our Agents or Scratchpay to harm (including fraud and other criminal acts). If we suspect that your Scratchpay Account or the Payment Services have been used for an unauthorized, illegal, or criminal purpose, you authorize us to share information about you, your Scratchpay Account, and any of your transactions with law enforcement and, as deemed necessary by Scratchpay, our Agents and their financial institution partners. Additionally, we may withhold Settlement or your access to your Scratchpay Account, as necessary to comply with applicable law, Payment Network Rule or court order, or if requested by any governmental entity, Agent or Payment Network.

4.3. Other Restrictions. You agree not to (a) act as a payment facilitator or otherwise resell the Payment Services to any third party, (b) use the Payment Services to handle, process or transmit funds for any third party, and (c) use the Payment Services to process cash advances.


5.1. In our discretion, we may require you to maintain a separate reserve account (a "Reserve Account") to secure the performance of your obligations under this Agreement, in an amount reasonably determined by us to cover potential losses to Scratchpay arising from your obligations, including for Provider Fees, Chargebacks, refunds, levies, liens, or garnishments. The Reserve Account may be raised, reduced or removed at any time by Scratchpay, in its sole discretion, based on your payment history, a credit review or otherwise as Scratchpay or an Agent may determine or require.

5.2. You agree to maintain the Reserve Account at the required amount at all times. If any amount is debited from the Reserve Account, you agree to replenish the Reserve Account no later than three (3) business days following such debit. If you fail to maintain sufficient funds in the Reserve Account, you authorize us to fund the Reserve Account by withholding the appropriate amount from your Settlement or debiting your Linked Bank Account.


6.1. You authorize us to debit, charge, setoff against or otherwise recover funds you owe us and/or that belong to us from any Settlement, your Linked Bank Account or any Reserve Account. You further authorize us to debit or credit your Scratchpay Account, Linked Bank Account or Reserve Account to correct processing errors. If the error caused you to receive less funds than were owed to you, you will be credited for the difference in the next Settlement made to you. If the error caused more funds to be settled than what was owed to you, we may recover the excess funds as described in this Section 6. If you submit a transaction in error, including in the incorrect amount, you must notify us immediately of such error. If you fail to notify us of such error within thirty (30) days of the transaction date, such failure will be deemed a waiver of any right to amounts owed to you.

6.2. You grant us a security interest in and lien on any and all funds held in your Scratchpay Account, Linked Bank Account (solely with respect to Settlement funds) and Reserve Account, and authorize us to make any withdrawals or debits from such accounts without prior notice to you, in order to collect amounts that you owe us, an Agent, a Payment Network, government authority or other third party under this Agreement. You will execute any additional documentation required for us to perfect our security interest in such accounts. This security interest survives for as long as you have outstanding obligations to us under this Agreement.

6.3. Your failure to fully pay amounts that you owe us on demand will be a breach of this Agreement. You are liable for any of our costs associated with collection in addition to any amounts owed, including attorneys' fees and expenses, collection agency fees, and any applicable interest.


In addition to your indemnity obligations under any other Scratchpay agreement, you agree to indemnify, defend, and hold us and our Agents (and our or their respective affiliates, officers, directors, employees, and agents) harmless from any losses, liabilities, and damages of any kind (including without limitation any costs, expenses or reasonable attorneys' fees incurred by any indemnified party) arising out of any third-party (including Client) claim, complaint, or Chargeback relating to arising from (a) your breach of this Agreement or any agreement with an Agent (including breach of applicable law or any Payment Network Rules); (b) your use of the Payment Services or any transaction submitted by you through the Payment Services, including the accuracy of any price, content or product, service, or transaction information that you provide; or (c) any claim or dispute arising out of the products or services offered or sold by you.




9.1. Except with respect to your indemnification or payment obligations set forth in this Agreement, in no event shall either party be liable to the other for any indirect, special, incidental, consequential, punitive or exemplary damages (including lost profits or revenue), arising out of, in connection with, or in any way relating to, this Agreement or a party's acts or omissions under this Agreement, whether in contract, tort (negligence or strict liability), or other legal or equitable theory and regardless if such party knew or should have known of the possibility of such damages.

9.2. Scratchpay's aggregate liability for any direct damages to you under this Agreement will not exceed the total amount of Provider Fees paid by Provider to Scratchpay in the immediately preceding twelve (12) months from the date a Provider claim against Scratchpay first arises under this Agreement.


10.1. With each transaction you process through the Payment Services, you represent, warrant and covenant to us that: (a) the transaction represents a bona fide sale; (b) the transaction accurately describes pricing, goods and/or services provided to the Client; (c) you will fulfill all of your obligations to the Client and will resolve any dispute or complaint directly with the Client; (d) you and the transaction comply with all federal, state, and local laws, rules, and regulations applicable to you and your business; (e) except in the ordinary course of business, you are not submitting a transaction that represents a sale to any principal, partner, proprietor, or owner of your entity; and (f) you are not submitting a transaction involving your own payment methods, such as corporate cards issued to your employees.

10.2. You further represent, warrant and covenant to us that:

(a) You have all necessary power and authority to enter into this Agreement; have all certificates, licenses, authorizations and/or approvals to perform your obligations under this Agreement and to provide the goods and services for which a payment may be accepted; and your provision of such goods or performance of such services do not violate applicable law.

(b) There is no claim, or any litigation, proceeding, arbitration, investigation or material controversy pending, against or affecting you that will have a material adverse effect on your or Scratchpay's ability to perform its obligations under this Agreement.

(c) To the best of your knowledge, no such claim, litigation, proceeding, arbitration, investigation or material controversy has been threatened or is contemplated against you.

(d) Any information furnished by you to Scratchpay is true and correct in all material respects when furnished; and you will immediately notify Scratchpay to update such information in the event any part of it becomes untrue or incorrect.


11.1. Suspension. You acknowledge and agree that, notwithstanding anything in this Agreement to the contrary, Scratchpay may, in its sole discretion, suspend your access to or use of the Payment Services by one or more (or all) Provider locations, or for one or more Scratchpay Accounts or Clients, if we suspect that you are or will be in breach of this Agreement, any Agent's terms of service, or applicable law, or if an Agent or government authority instructs us to suspend your use of the Payment Services. If your access to or use of the Payment Services has been suspended, you may still be permitted to use Scratchpay's other products, subject to our discretion.

11.2. Termination. You acknowledge and agree that, notwithstanding anything in this Agreement to the contrary, Scratchpay may, in its sole discretion, terminate your access to or use of the Payment Services at any time for any reason. We will make commercially reasonable efforts to provide you with prior notice of such termination, however, we may not give you prior notice if you close your Scratchpay Account, or if we terminate due to your breach of this Agreement, an Agent's terms of service or applicable law, or if an Agent or government authority instructs us to terminate your use of the Payment Services. If your access to or use of the Payment Services has been terminated, you may still be permitted to use Scratchpay's other products, subject to our discretion.

11.3. Effect of Suspension, Termination. Upon suspension or termination of this Agreement, you agree to immediately cease using the Payment Services until such suspension is lifted by Scratchpay in its sole discretion. In the case of termination, all licenses or other rights granted to you will immediately and automatically terminate and revert to their owners, and you will immediately remove all signage, logos, marketing materials and similar displays relating to Scratchpay or the use of the Payment Services from your physical and online locations and all Client channels. However, you will remain responsible and liable under this Agreement, and any Agent's terms of service, for any transactions submitted for processing prior to termination, including for any subsequent refunds or Chargebacks. Any Settlements due at or after the time of suspension or termination will be paid out according to this Agreement.

11.4. Survival. Any provision of this Agreement which by its nature extends beyond the termination of this Agreement, will survive the termination of this Agreement, including: Sections 1.2-1.5; 2; 4-9; and 12-16.


12.1. Except as provided below, the party receiving Confidential Information of the disclosing party shall keep confidential, and will not disclose to any third party, the disclosing party's Confidential Information, or any of the terms and conditions of this Agreement, without the prior written consent of the disclosing party. The receiving party shall take care to prevent the disclosure of the disclosing party's Confidential Information with at least the same degree of care which the receiving party takes to protect its own confidential information of a similar nature, but in any case, no less than an appropriate and reasonable degree of care.

12.2. The receiving party may disclose the disclosing party's Confidential Information to its employees, service providers or affiliates who are informed of the confidential nature of the information and have agreed to be bound by confidentiality obligations at least as stringent as those under this Agreement, and where such disclosure and/or utilization of Confidential Information is solely for the purpose of (i) performing the receiving party's obligations under this Agreement or (ii) when required to be disclosed by law or regulation or by court order or other legal authority, provided that prior to the disclosure of Confidential Information under subsection (ii), the receiving party will, as applicable, (1) notify and reasonably cooperate with the disclosing party prior to disclosure so that the disclosing party has an opportunity to seek a protective order or other relief, (2) disclose only such information as is required by the law or regulation or court order or other legal authority, and (3) use commercially reasonable efforts to obtain confidential treatment of any Confidential Information so disclosed.

12.3. A party's confidentiality obligations shall not apply to (i) information in the public domain, except where such information entered the public domain due to a breach of this Agreement, (ii) that the receiving party rightfully possessed before it received the information from the disclosing party, (iii) is furnished to the receiving party by a third party free of any obligation of confidentiality to that third party, or (iv) is developed by the receiving party wholly independent from the Confidential Information.

12.4. A receiving party agrees to return or destroy the disclosing party's Confidential Information (in any form and including all summaries, copies and excerpts) promptly following the disclosing party's request. At the disclosing party's option, the receiving party will provide written certification of its compliance with this paragraph within seven (7) days following the date of such request.

12.5. In the event of any breach of a party's confidentiality obligations, the parties agree that the non-breaching party will suffer irreparable harm and the total amount of monetary damages for any injury to the non-breaching party from any violation by the breaching party will be difficult or impossible to calculate and will therefore be an inadequate remedy. Accordingly, the parties agree that the non-breaching party may obtain temporary and permanent injunctive relief against the breaching party, in addition to any other rights or remedies that the non-breaching party may be entitled at law, in equity and under this Agreement.

12.6. No party shall obtain any proprietary rights in any Confidential Information which has been or at any time after the date of this Agreement is disclosed, directly or indirectly, to it by another person under this Agreement, except as may be expressly provided in this Agreement.

12.7. You may not, without Scratchpay's express written approval, issue any press release or otherwise advertise, make a public statement or disclose to any third party any information about the parties' relationship under this Agreement, the existence of this Agreement or payments between Clients and you, except as otherwise provided for in this Agreement. 

12.8. Except for information owned by an Agent, you acknowledge that Scratchpay owns all other information concerning the Payment Services, including your Scratchpay Account (collectively, "Scratchpay Information"), and that you have no ownership rights therein. You shall treat such Scratchpay Information as Scratchpay's Confidential Information. For clarity, the foregoing does not prevent you from collecting and owning information about a Client unrelated to the Payment Services (for example, information about a Client relating to its receipt of your goods or services), and such information shall not be considered Scratchpay Information. Transaction and related information arising from the Payment Services not deemed Scratchpay Information shall be governed by your agreement with the relevant Agent.


13.1. You are fully responsible for your collection, storage, disclosure and use of, and access to, Scratchpay Information under your control or made available to you under this Agreement. You will prevent any collection, storage, disclosure or use of, or access to, Scratchpay Information not expressly authorized by this Agreement. Without limiting your other obligations under this Agreement (including your confidentiality obligations), you will implement and maintain a comprehensive and effective written information security program appropriate to the nature of the Scratchpay Information that: (i) contains administrative, technical and physical safeguards to identify, assess and protect against any reasonably foreseeable anticipated or actual threats or hazards (whether internal or external) to the security or integrity of Scratchpay Information, including threats of loss, theft, unauthorized access, use, disclosure or other unauthorized processing of Scratchpay Information or any failure of security controls protecting Scratchpay Information, (ii) meets industry best practices for such safeguards, and (iii) complies with all applicable data protection and privacy laws.

13.2. You will monitor the sufficiency of your safeguards and review the scope of your security measures at least annually, and when you make any material changes to such security measures, such review to include risk assessments, regular testing, and otherwise monitoring for the effectiveness of key controls, systems and procedures to confirm your safeguards are operating in a manner that is reasonably calculated to prevent and detect unauthorized access to or use or disclosure of Scratchpay Information. Scratchpay reserves the right to review, upon request, your policies, procedures and practices used to maintain the privacy, security and confidentiality of Scratchpay Information.


14.1. Notwithstanding anything in this Agreement (other than Section 3.2), Scratchpay owns all intellectual property rights, title and interest in and to the Payment Services, including the Scratchpay name, trademarks, copyrights, processes, trade secrets or other such proprietary rights, any Scratchpay documentation or technology (including the Dashboard), and anything developed by Scratchpay under this Agreement.

14.2. Except for any licenses granted to you, nothing in this Agreement is intended to transfer or assign any such intellectual property rights to you. Any rights not expressly granted to you are reserved by Scratchpay (subject to Section 3.2). 

14.3. You agree that you will not, and will not attempt to, disassemble, decompile or otherwise reverse-engineer any software, code or other trade secret provided by Scratchpay or any Agent. 

14.4. You hereby grant Scratchpay a non-exclusive license to use your name, trademarks, logos and other marks in connection with the administration and operation of the Payment Services, for inclusion in marketing materials relating to the Payment Services (solely to reflect your use of the Payment Services), and collecting or liquidating any Scratchpay Accounts.


Provider and Scratchpay agree to arbitrate any claim, controversy, or dispute between Provider and Scratchpay, including any claims relating in any way to this Agreement or the Payment Services, or any other aspect of the relationship between Provider and Scratchpay (collectively, "Disputes").  ANY ARBITRATION UNDER THIS AGREEMENT WILL ONLY BE ON AN INDIVIDUAL BASIS; CLASS ARBITRATIONS, CLASS ACTIONS, REPRESENTATIVE ACTIONS, AND CONSOLIDATION WITH OTHER ARBITRATIONS ARE NOT PERMITTED. PROVIDER WAIVES ANY RIGHT TO HAVE ITS CASE DECIDED BY A JURY AND ANY RIGHT TO PARTICIPATE IN A CLASS ACTION AGAINST SCRATCHPAY. If any provision of this arbitration agreement is found unenforceable, the unenforceable provision will be severed, and the remaining arbitration terms will be enforced (but in no case will there be a class or representative arbitration). All Disputes will be resolved finally and exclusively by binding individual arbitration with a single arbitrator (the "Arbitrator") administered by the American Arbitration Association ( according to this Section and the applicable arbitration rules for that forum. The Arbitrator shall be responsible for determining all threshold arbitrability issues, including issues relating to whether this Agreement or any other agreement between the parties (or any aspect thereof) are enforceable, unconscionable or illusory and any defense to arbitration, including waiver, delay, laches, or estoppel. Subject to applicable jurisdictional requirements, Provider may elect to pursue its claim in its local small-claims court rather than through arbitration so long as the matter remains in small claims court and proceeds only on an individual (non-class or non-representative) basis. The Federal Arbitration Act, 9 U.S.C. §§ 1-16, fully applies. If Provider is a consumer bringing a claim relating to a transaction intended for a personal, household, or family use, any arbitration hearing will occur within the county where Provider is located. Otherwise, any arbitration hearing will occur in Los Angeles, California, unless the parties mutually agree to another location. The arbitrator's award will be binding on the parties and may be entered as a judgment in any court of competent jurisdiction. While an arbitrator may award declaratory or injunctive relief, the Arbitrator may do so only with respect to the individual party seeking relief and only to the extent necessary to provide relief warranted by the individual party's claim. An Arbitrator's decision and judgment thereon will not have a precedential or collateral estoppel effect. Scratchpay will reimburse the arbitration fees due to the American Arbitration Association for individual arbitrations brought in accordance with this Section for all claims totaling less than $10,000 unless the Arbitrator determines that Provider's claims were frivolous. If either party prevails on any claim for which the prevailing party is legally entitled to attorney's fees, the prevailing party may seek to recover those fees from the arbitrator. For purposes of this arbitration provision, references to Provider and Scratchpay also include respective subsidiaries, affiliates, agents, employees, predecessors, successors and assigns as well as authorized users or beneficiaries of the Payment Services.


16.1. Force Majeure. A party will not be deemed to be in default under this Agreement, and no party will hold the other party responsible for, any interruption or delay in the performance of its obligations under this Agreement (except for Provider's payment obligations), due to earthquake, flood, fire, storm or similar natural disaster; war, terrorism or similar armed conflict; or labor strike, lockout, or boycott; provided that the party relying upon this paragraph must promptly give the other party written notice upon discovery of the relevant force majeure event, and will take all steps reasonably necessary under the circumstances to mitigate the effects of the force majeure event upon which such notice is based; provided further that the force majeure event does not relieve the affected party from performing its other obligations to the extent not affected by such force majeure event.  In the event a force majeure event extends for a period in excess of thirty (30) days, either party may immediately terminate the Agreement.

16.2. Independent Contractors. Neither party nor its employees, consultants, contractors or agents are considered agents, employees or joint ventures of the other party. Such persons do not have they any authority to bind the other party by contract or any other obligation, and each party shall ensure that such persons shall not represent to the contrary, expressly or implicitly, by appearance or otherwise, that they have any authority to bind the other party by contract or any other obligation.

16.3. Assignability. Provider may not assign this Agreement, or its rights or obligations hereunder without the prior written consent of Scratchpay.

16.4. Choice of Law and Venue. This Agreement and the rights of the parties hereunder shall be determined, governed by and construed in accordance with the laws of the State of California without regard to conflicts of laws principles.  Subject to and without waiver of the arbitration provision set forth in Section 15 (other than small claims actions in consumer cases discussed therein), Disputes under this Agreement shall be resolved solely by a court having its situs within Los Angeles County, CA, and the parties consent and submit to the jurisdiction of any court located within such venue.

16.5. Attorneys' Fees and Costs. For the parties' mutual benefit, if any action is commenced to enforce or interpret, or in any way relates to this Agreement, the prevailing party is entitled to its reasonable attorneys' fees and costs.

16.6. Entire Agreement. This Agreement constitutes the entire agreement between the parties and is the final expression of the parties' understanding. No prior discussions or communications shall form any part of this Agreement, unless expressly noted herein. 

16.7. Modifications. Scratchpay may, from time to time, revise the terms and conditions of this Agreement, including by revising the Pricing Schedule, and such revisions will be binding and effective on Provider upon the earlier of: written notice to Provider (if any); 30 days after posting of the revised Agreement on the Scratchpay Account; or Provider's use of the Payment Services after posting of the revised Agreement on the Scratchpay Account. Provider agrees to periodically review the Scratchpay Account for the posting of any revised version of this Agreement.

16.8. Construction. Headings contained in this Agreement are for convenience only and do not constitute a limitation of the Agreement terms. The singular includes the plural, and the plural includes the singular. All references to "herein," "hereunder," "hereinabove," or like words shall refer to this Agreement as a whole and not to any particular section, subsection, or clause contained in this Agreement. The terms "include" and "including" are not limiting. Reference to any agreement or other contract includes any permitted modifications, supplements, amendments, and replacements.

16.9. Third Party Beneficiaries. This Agreement is intended for the sole and exclusive benefit of the parties, and is not intended for benefit of any third party.

16.10. Notices. All notices and other communications under this Agreement shall be given in writing and shall be deemed to have been duly given and effective upon receipt if delivered in person, by recognized messenger service or by email. Any notice to Scratchpay must be sent either by mail, (a) to Scratchpay, 225 S. Lake Avenue, Suite 250, Pasadena, CA 91101, Attn: General Counsel, or (b) by email to [email protected], Attn: General Counsel, unless a different address for notice is later provided in writing by Scratchpay.

16.11. Severability. If any provision of this Agreement is deemed unenforceable or invalid, such unenforceability or invalidity will not render the Agreement unenforceable or invalid as a whole. In such event, the provision deemed unenforceable or invalid will be changed or interpreted so as to best accomplish the objectives of such provision within the limits of applicable law or applicable court decisions.


Scratchpay will apply the Provider Fees set forth in this pricing schedule (the “Pricing Schedule”) for your use of the Payment Services. Fees will be deducted from amounts processed, debited directly from the Linked Bank Account, and/or other agreed-upon billing method.

Payment Service Fees

Scratchpay will charge the Percentage of Transaction Amount plus Fixed Amount per Payment Request. Until the end of the first full calendar month from the date of account opening, Fee Tier 4 will apply. Thereafter, the Fee Tiers for Transactions are determined based on the preceding full calendar month’s total Transaction Amounts minus Refunds (“Net Monthly Volume”).

Fee Tiers by Net Monthly Volume Percentage of Transaction Amount Fixed Amount Per Payment Request
Fee Tier 1: Greater than $150,000 1.95% $0.20
Fee Tier 2: $90,000 to $150,000 2.15% $0.25
Fee Tier 3: $40,000 to $90,000 2.45% $0.30
Fee Tier 4: $0 to $40,000 2.65% $0.30

Fees for Other Services

Scratchpay will charge the Percentage of Transaction Amount plus a Fixed Amount (on a per Transaction basis).

Service Type Percentage of Transaction Amount Fixed Amount
ACH Debit Dispute Fee 0.00% $15 per disputed payment if not resolved in Provider’s favor
ACH Debit Failed Transaction Fee 0.00% $4 per failed Transaction
Card Dispute Fee 0.00% $15 per disputed payment if not resolved in Provider’s favor
Payment with a Tokenized Payment Method 0.75% $0
Card Account Updater 0.00% $0.20 per card update
Foreign Exchange Fee

Applied if the currency paid by the customer is different from the payout currency.
1.00% $0

Platform Fees

Type Fees
Payout Fee - Standard Payout $0.15 per Payout to the Linked Bank Account
Terminal Cost

One time cost per terminal ordered
BBPOS Chipper: $59

Verifone P40: $299

Definitions. As used in this Pricing Schedule, the following terms have the meanings specified below:

  • Card Account Updater enables the automatic update of customer account details (such as billing address or expiration date) for a card.

    Dispute Fees are fees incurred when there are disputed payments, such as chargebacks. There is no fee for disputes resolved in your favor.

    Payment Request means each instance in which you submit a request to Visa, Mastercard, American Express, or any other payment network (whether card-based, non-card based or ACH) via the Payment Services, including an authorization, void, balance inquiry, charge, chargeback, re-presentment or reversal.

    Transaction means any particular purchase, sale, order or any other transaction processed or requested to be processed through the Payment Service, and Transaction Amount means the total amount processed for a Transaction.