Bank Payment Services Agreement

Latest Revision: March 9, 2024

The Automated Clearinghouse (“ACH”) network allows you to collect funds through debit or credit Transactions from US bank account holders. Terms specifically applicable to acceptance of ACH Transactions are stated below. As with all Payment Methods, your use of Straddle’s products that access the ACH network, including ACH Direct Debit Payments and ACH Credit Transfer Payments, bind you to the terms stated below, the Nacha Rules, and the Straddle Services Agreement.

You accept and agree to comply with all of these terms.

Nacha

The ACH network is controlled and managed by the National Automated Clearinghouse Association (Nacha) and its member organizations. When submitting Transactions over the ACH network, you must comply with the Nacha Operating Rules. Payment Method Rules include the Nacha Operating Rules.

ACH Authorizations

When you collect funds through ACH Network debit Transactions via the Straddle Payments Services, Straddle is operating as a Third Party Sender (as defined in the Nacha Operating Rules) and you understand and accept your role as the Originator (as defined in the Nacha Operating Rules), including to authorize the banks Straddle partners with to enable the submission of Transactions over the ACH Network (“ODFI Banks” or "Sponsor Banks") on your behalf to and from your Customer’s bank accounts.

You must obtain your Customer’s authorization to debit or credit their bank account and initiate a Transaction over the ACH Network. You are responsible for ensuring the authorizations are in a form and manner that complies with the Nacha Operating Rules, Law and the Documentation for ACH Network Transactions.

You must maintain data sufficient to provide or reconstruct any ACH Network Transaction authorization and provide Straddle with evidence of that authorization upon request.  You agree to abide by the requirements outlined in the Nacha Authorization Requirements documentation.

When you use Straddle to initiate ACH Network Transactions with your Customers, you represent and warrant that:

(a) you have all necessary authorizations and approvals from your Customers for Straddle to transmit an ACH Network debit or credit Transaction to the Customer’s bank account;

(b) the information you provide Straddle about each ACH Network Transaction is accurate, timely and complete

You further warrant that any ACH Network debit Transaction that you initiate satisfies an obligation or corrects an error. Straddle is not liable for any return, reversal or other failure (or any related costs) arising from your acts and omissions, including failure to obtain your Customer’s authorization for an ACH Network Transaction.

ACH Returns

You understand that: Customers can request an ACH Transaction return if they believe the payment was unauthorized under the Nacha Operating Rules. A Customer’s bank is obliged to refund the debits without question, as long as the request was received within 60 days (60 days for consumers and 2 days for businesses) from the settlement date of the original ACH entry. If a return request happens, Straddle will immediately debit your User Bank Account in the amount of the return request.

There is also a process for late returns outside the 60 day window, which is primarily managed by and decided at the discretion of the banks involved in the transaction. If a return request is received outside of the 60 day window, Straddle will contact you for a copy of the ACH Authorization and attempt to contest the disputed payment on your behalf.

The ACH network does not have its own appeals process, so if you believe a Customer has wrongly requested a return on a Transaction, you’ll need to settle the matter outside of Straddle and submit a new Transaction if settled in your favor.

Bank Account Verification

In accordance with the Nacha ACH Guidelines, Straddle automatically verifies all Customer bank accounts through our Straddle Bridge or Paykeys technology in conjunction with our Bank Payments products. To facilitate bank account verification, Straddle will collect certain Customer bank account information, which information is Straddle Data as defined in the Straddle Services Agreement. Straddle may retain and process this Straddle Data as the terms of the agreement between Straddle and the Customer allows.

Funds Availability

You may be eligible to opt-in to have ACH Transactions funds made available to you faster than the standard timing for availability. You understand that the ACH return rules and timelines under Nacha Operating Rules remain unchanged if you elect for faster funds availability. If you opt-in for faster funds availability, you acknowledge and accept all risks associated, related to, or resulting from the faster availability of funds, including the risk of higher return or dispute rates. You understand that you continue to be liable to Straddle for the full amount of all Disputes, Refunds and Reversals (as defined in the Straddle Services Agreement) regardless of the reason or timing. Your eligibility to opt-in to faster funds availability is in the sole discretion of Straddle, and Straddle reserves the right to revoke your eligibility at any time. You agree that Straddle, in its sole discretion, may impose daily, transaction or other limits.

Rules and Regulations

You bear the final responsibility to ensure that your policies and procedures meet the requirements of the ACH Rules and all applicable Regulations. You represent and warrant that all payment requests originated via the Straddle API comply with all applicable Rules and Regulations, including without limitation the following Regulations:

• FTC Act (15 U.S.C. §§ 41, et seq.);
• TSR (16 C.F.R. 310, et seq.);
• Electronic Fund Transfer Act (15 U.S.C. §§ 1601, et seq.) and Regulation E (12 C.F.R 205, et seq.), if applicable;
• Uniform Commercial Code Article 4-A, if applicable;
• Federal Reserve Board Regulation J, if applicable;
• the rules and sanctions laws of the Office of Foreign Assets and Control (“OFAC”);
• Unlawful Internet Gambling Enforcement Act (31 U.S.C. §§ 5361, et seq.) and accompanying regulations (12 C.F.R. 233; 31 C.F.R. 132);
• PACT Act (15 U.S.C. §§ 376, et seq., Jenkins Act (15 U.S.C. §§ 375, et seq. and accompanying regulations; and
• all applicable state laws and regulations.

You shall defend, indemnify, and hold harmless Straddle for any claims, losses, liabilities, costs, fines, or expenses suffered or incurred (including attorneys’ fees and costs) relating to, arising out of, or involving any breach of these representations and warranties or failure to comply with any applicable Rules or Regulations. In addition to its cancellation rights described elsewhere in this Agreement, Straddle may immediately cancel this Agreement if Straddle, its sponsor bank partners, or any regulatory agency believes that you are violating or has previously violated any applicable Regulation or Rule or is in breach of these representations and warranties.

Termination and Suspension

Without limiting Straddle’s rights to terminate or suspend your access to the Services under the Straddle Services Agreement, Straddle may also terminate or suspend your access to the ACH Network via Straddle for your violation of the Nacha Operating Rules, including if an ODFI Bank requires your suspension or termination, or if you exceed acceptable limits on returns.

Requests for Compliance Information

By collecting funds through ACH Network debit Transactions and as required by the Nacha Operating Rules, you will provide information and documentation requested by Straddle or the ODFI Bank (or their designated third-party auditor) for the purpose of ensuring your compliance with these Terms and the Nacha Operating Rules upon reasonable notice. You agree to cooperate with any request for compliance information and to respond to reasonable requests for information necessary to complete the compliance review in a timely manner. Straddle may suspend or terminate your access to the ACH Network via Straddle immediately if you fail to provide information or documentation Straddle requests under this Section.

Warranty

You warrant to Straddle, as an Originator of Transactions made under the Nacha Operating Rules, that no Transaction delivered to Straddle or the ODFI Bank, if accepted by the ODFI Bank, will cause Straddle or the ODFI Bank to be in violation of any regulation or sanction administered by a Governmental Authority or otherwise cause Straddle or the ODFI Bank to be in violation of Law.

Account Numbers

Straddle and any other person involved in an ACH Network Transaction may rely on the routing number and account number that you provide when giving a transfer instruction. If the name of the account owner identifies a different person from the account owner identified by the number, Straddle and any other person that handles the instruction may still rely exclusively on the number.

Acknowledgement of Third-Party Sender Relationship

By agreeing to these terms, you have authorized Straddle to act as your agent and a Third-Party Sender (“TPS”) in originating ACH Transaction Entries. You acknowledge that Straddle has a legal agreement with one or more Financial Partners who act as the Originating Depository Financial Institution (”ODFI” or “Sponsor Bank”).  You also:

• assume the responsibilities and warranties of an Originator as defined by the Nacha Operating Rules and Guidelines (the “Rules”) and agrees to reimburse ODFI for returns, reversals, adjustments, reclamations, and warranty claims and responsibilities related to your ACH Entries;
• agree to comply with the Rules, including but not limited to the requirements of Article Two (Rights and Responsibilities of ODFIs, Their Originators and Third Party Senders), Rule 2.15 (Obligations of Third-Party Senders, and of ODFIs and Originators that Use Third Party Senders);
• agree to comply with all applicable state and federal laws, rules and regulations, including but not limited to sanction laws administered by the Office of Foreign Assets Control (“OFAC”), the Electronic Funds Transfer Act, the Unlawful Internet Gambling Enforcement Act and Federal Reserve Board Regulation E (the foregoing and the ACH Rules are, collectively, the “Applicable Rules”);
• acknowledge that ACH Entries may not be initiated that violate the laws of the United States, including but not limited to the sanctions laws, regulations, and orders administered by OFAC, laws, regulations, rules, and orders administered by the Financial Crimes Enforcement Network (“FinCEN”) (as such terms are defined below), and any state laws, regulations, or orders applicable to the providers of ACH payment services.

You understand that both Straddle and its ODFI Financial Partners have the right to:

• review, monitor, and audit your ACH transactions, processes, and procedures for compliance with this Agreement and the Rules;
• restrict or limit the amount or type of ACH Entries processed for your Straddle User Account; and
• suspend, discontinue, or terminate ACH processing based on its assessment of the risk posed to the ODFI and/or the breach or termination of its agreement with Straddle.

You authorize the ODFI to act on any instruction which has been or reasonably appears to have been sent by TPS or Straddle User Account, including but not limited to funds transfer instructions. ODFI is not obliged to take any further steps to confirm or authenticate such instructions and will act on them without getting further confirmation. You understand that if it or Straddle provides ODFI with incorrect information or if there is any error in the instruction it accepts full responsibility for losses resulting from any of the errors, duplication, ambiguities, or fraud in the information that was provided to ODFI.

ODFI is not responsible to third parties (such as, but not limited to, third party service providers and the third parties to whom wire or ACH debit or credits are transmitted hereunder) and you shall defend, indemnify, and hold ODFI harmless from, the actions or omissions of Straddle, or any claim made against ODFI arising out of your use of the Straddle Services, breach of this Agreement, or breach of any warranty under the Rules. IN NO EVENT WILL ODFI BE LIABLE OR RESPONSIBLE FOR, AND TPS AND STRADDLE USER ACCOUNT BEAR ALL RISK ASSOCIATED WITH, FOREIGN EXCHANGE CONVERSION AND ANY GAINS AND LOSSES RESULTING FROM THE CONVERSION OF CURRENCIES IN CONNECTION WITH ANY ENTRY.

This addendum shall survive the termination of the agreement between TPS and ODFI. ODFI shall be considered an intended beneficiary of this Acknowledgment and is entitled to enforce its terms. This Acknowledgment is agreed to in consideration of ODFI’s agreement to serve as ODFI.

You waive notice of the ODFI’s acceptance of this Acknowledgment.

Notice with Respect to Non-Consumer ACH Wholesale Credit Transactions and UCC Article 4A

(1) Payment Entries may be transmitted through the Automated Clearing House; (2) The rights and obligations of the Originator with respect to such payments shall be construed in accordance with and governed by the laws of the State of New York unless it has been otherwise agreed that the law of some other state shall govern; (3) Credit given by a Receiving Depository Financial Institution (RDFI) with respect to an Automated Clearing House (ACH) credit entry is provisional until the RDFI receives final settlement for such entry through a Federal Reserve Bank or as otherwise provided for under Article 4A; and (4) If a RDFI does not receive such final settlement or payment, you are hereby notified and agree that the RDFI is entitled to a refund from the Receiver the amount of the credit to the Receiver’s account, and the party making payment via such entry (i.e. the originator of the entry) shall not be deemed to have paid the amount of such entry.

Nested Third Party Senders

You must not submit ACH Network Transactions as a Nested Third Party Sender (as defined in the Nacha Operating Rules) through the Straddle Payments Services.