Payment by bankcard has become so commonplace for retailers that it is almost invisible. Yet behind every transaction lies a precise contractual framework: the acceptance contract. This document, which binds the supplier to the card issuer, governs all their relations, from joining the system to the settlement of transactions. Far from being a mere technical formality, it establishes a set of obligations and responsibilities that, if ignored, can have significant consequences. This article is part of our wider exploration of the complete legal guide to payment cards and focuses on the dynamics of this contractual relationship, which is fundamental to any commercial activity.
Membership of card payment systems for merchants
Parties to the acceptance contract: issuer (bank) and supplier (merchant)
The card payment acceptance contract is concluded between two main parties. On the one hand, there is the issuer, usually a credit institution or bank, which provides the payment system. On the other, the supplier, also known as the acceptor, who is the retailer, craftsman or self-employed professional wishing to offer this method of payment to their customers. Under the French "Carte Bancaire" system, the mechanism is centralised. Merchants do not contract with each issuing bank, but with their own bank. This bank then acts as the representative of all the members of the Groupement des Cartes Bancaires (GIE CB), which means that the merchant is part of a unified national network.
The issuer's right of approval and competitive limits
A merchant's membership of the system is not automatic. The bank has a right of approval, i.e. the ability to accept or refuse a supplier. This choice is largely discretionary, as the contract is based on trust and an analysis of the merchant's reliability. However, this freedom is not absolute. A refusal must not be abusive or based on discriminatory grounds. Above all, the bank's decision is governed by competition law. It cannot, for example, refuse authorisation in the context of an unlawful agreement or abuse of a dominant position. The aim is to preserve healthy competition and prevent payment networks from becoming barriers to entry for certain businesses.
The legal nature and conclusion of the acceptance contract
A synallagmatic contract of adhesion
In legal terms, the acceptance contract has two major characteristics. Firstly, it is synallagmatic, which means that it creates reciprocal obligations for both parties: the bank undertakes to guarantee and process payments, while the merchant undertakes to comply with the procedures and pay for the service. Secondly, it is essentially a contract of adhesion. The merchant does not negotiate the fundamental clauses of the system, which are standardised to ensure the uniformity and security of the network. They 'adhere' to the system as a whole. Only certain specific conditions, such as the amount of commission deducted from each transaction, may be the subject of commercial negotiation with their bank.
Application of competition law rules (exclusivity, unfair terms)
The validity of the clauses in the acceptance contract is assessed in the light of the rules of competition law. A bank may not impose an exclusivity clause on a merchant prohibiting him from joining a competing system (for example, American Express in addition to Carte Bancaire). Such a practice would be considered a restriction of competition. However, it is important to note that the unfair terms regime, as set out in the Consumer Code, does not apply to these contracts. The Court of Cassation has long established that this protection is reserved for relations between professionals and consumers, and not for agreements concluded between two professionals in the course of their business. This submission to the principles of free competition is a constant in the sector, as we discussed in our article on competition law applicable to the banking sector.
The conditions and duration of the contract
The sole purpose of the acceptance contract is to regulate the terms of payment between the merchant's customer, the merchant and the bank. It is completely separate from the basic contract between the merchant and his customer (sale of goods, provision of services). Thus, a dispute concerning the quality of a product sold cannot, in principle, affect the payment transaction. In terms of duration, the contract is generally concluded for a fixed period, usually one year. There is almost always a tacit renewal clause, which means that the contract is automatically renewed when it expires, unless one of the parties gives notice of termination, usually by sending a registered letter with acknowledgement of receipt.
Changes to and termination of the acceptance contract
Conditions for unilateral amendment of the contract
Acceptance contracts frequently contain a clause authorising the issuer to unilaterally modify the terms and conditions of the service. This may involve changes to security procedures, processing methods or, more significantly, the fee structure. Faced with such a change, the merchant generally has no choice but to accept the new conditions or terminate the contract. If the merchant does not contest the change, this constitutes acceptance. To protect suppliers from changes that are too abrupt, the competition authorities have imposed that such changes be notified within a reasonable period before they come into force, which in practice is at least one month.
Termination of the contract: procedures and grounds (cessation of business, breach)
Where the contract is open-ended, it may be terminated at any time by either party, provided that reasonable notice is given. If the bank were to terminate the contract abruptly and without legitimate reason, this could be deemed unfair and the merchant could be entitled to damages. Termination is usually for reasons set out in the contract. Termination is usually automatic in the event of cessation of business, sale or transfer of the business. A serious breach by the supplier of its obligations, in particular fraudulent behaviour or repeated non-compliance with security procedures, also constitutes just cause for immediate termination by the issuer. Conversely, if the merchant is placed in receivership or liquidation, the contract is not automatically terminated, as the receiver may demand that the contract continue.
The obligations of the supplier (trader)
Card acceptance and refusal limits (threshold, additional charges)
The primary obligation of affiliated merchants is to accept for payment all cards approved by the network to which they have subscribed. They must prominently display the system's logo (e.g. "CB") to inform their customers. It is strictly forbidden to increase prices for customers paying by card or to impose additional charges. This practice of a single price is an essential condition of the contract. However, the retailer may set a minimum purchase amount before accepting payment by card. This restriction is lawful on condition that the threshold is reasonable and clearly displayed for customers to see at the entrance to the shop or at the point of payment.
Compliance with system procedures (equipment, identifier)
Membership of the card payment system requires the supplier to comply scrupulously with the technical and security procedures defined by the network. This implies the use of approved equipment, such as an electronic payment terminal (EPT), and a ban on misusing the system for other purposes. The card can only be used as a means of payment and not simply as a customer identification tool to set up another form of payment, such as a direct debit. Such a practice has been deemed parasitic in the past, as it would allow the merchant to benefit from the network's security infrastructures without paying the right price through commissions.
Mandatory checks (validity, signature, objection lists)
Even though modern payment terminals have largely automated checks, the merchant is still responsible for several checks during each transaction. They must ensure that the card is valid (has not expired), check that it is not on a stop list provided by the bank and, where the procedure still requires it, check that the signature on the till receipt matches the signature on the back of the card. These checks are the first stage in the obligations of the merchant when issuing the payment orderThis is a process for which the bank is responsible. Failure to comply with these due diligence obligations may result in the loss of the payment guarantee offered by the bank.
Obligations and responsibilities relating to collection operations (remuneration of the issuer, uniqueness of prices, retention of documents)
In addition to the checks carried out at the time of the transaction, the supplier has other obligations relating to collection. The most obvious of these is remuneration of the issuer, which takes the form of payment of a commission on each transaction. As mentioned above, the issuer is also required to maintain a single price. Lastly, an often overlooked but essential obligation is to keep the documents supporting payments (the 'facturettes' or till receipts) for a period set out in the contract, which is generally one year. In the event of a dispute by a cardholder, the bank may ask for these supporting documents. If the merchant is unable to provide them, the bank is entitled to carry out a reversal, i.e. to debit the merchant's account for the amount of the disputed transaction.
Criminal liability of the supplier (stolen/counterfeit cards, breach of trust)
Breach of contractual obligations may, in the most serious cases, give rise to criminal liability. A supplier who knowingly accepts payment using a card that he knows to be stolen, lost or counterfeit is an accomplice to fraud. Similarly, a merchant who uses bank card details provided by a customer for one transaction to make another unauthorised payment is committing an offence of breach of trust. Lastly, entering an amount higher than that agreed on the till receipt could be classified as forgery. These acts expose the merchant to severe criminal penalties, in addition to the immediate termination of his acceptance contract.
Obligations of the issuer (bank) to the supplier
Obligations relating to the operation of the system (provision of equipment, information)
In return for the merchant's duties, the bank also has fundamental obligations. Firstly, it must ensure that the system works properly from a technical point of view. This often involves providing, renting or at least approving the payment equipment (Eftpos terminals). The issuer also has a continuing obligation to provide information to the supplier. The issuer must provide the supplier with all the data required to ensure the security of transactions, in particular lists of blocked cards, and inform the supplier of any changes to the network's procedures or security rules. This information is essential to enable the merchant to fulfil its own control obligations.
Obligations relating to the payment of invoices and the payment guarantee
The issuer's main obligation is, of course, to pay the supplier for the transactions regularly carried out, after deduction of its commission. This payment undertaking is not simply a collection service but a genuine guarantee. Legally, this payment guarantee is analysed as a del credere commitment, i.e. an autonomous promise independent of the underlying sales contract. For the merchant, it offers considerable security: he can be sure of being paid, even if the cardholder is insolvent. However, this guarantee is not unconditional. It only applies if the supplier has scrupulously complied with all its own contractual obligations, particularly the control and security procedures. If the supplier fails to do so, the bank may refuse its guarantee and reverse the transaction.
Solent avocats: your partner for disputes relating to card acceptance contracts
Although standardised, the card payment acceptance contract is a complex undertaking that can be the source of numerous disputes. Whether it's a disagreement over the interpretation of a clause, a termination deemed unfair, a challenge to a reversal or more delicate situations involving fraud, the assistance of a lawyer with expertise in banking law is often essential to assert your rights. Our firm assists merchants and issuers in dealing with these issues. In the event of suspected illegal transactions, our expertise in banking fraud law offers you recourse to defend your interests. For any question relating to your acceptance contract or if you are faced with a dispute, get in touch with our team for an analysis of your situation.
Sources
- Monetary and Financial Code
- Commercial code
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