Merchant Processing Agreement (MPA)

A Merchant Processing Agreement (MPA) is a formal contract between a merchant and an acquiring bank or payment processor that outlines the terms and conditions under which payment processing services are provided. This agreement is critical as it governs the relationship between the two parties, detailing the responsibilities, rates, fees, and the rights of each party involved in the electronic processing of credit card transactions.

Key elements typically included in an MPA are:

Understanding the terms of the Merchant Processing Agreement is crucial for merchants, as it affects their day-to-day operations, financial management, and how they handle their customers' transactions. Merchants should thoroughly review and possibly seek legal counsel on the MPA before signing to ensure they understand all fees, terms, and legal implications. This ensures there are no surprises and that the merchant can maintain a beneficial relationship with their processor.