ACH Terms
Last Updated: January 3, 2024
This Agreement for ACH Services (the “Agreement”) is made by and between the entity that indicates its acceptance and agreement with this Agreement (“Corporate Member”) and Expensify, Inc. (“Third-Party Sender”), to be effective as of the date this Agreement is accepted and agreed to by Corporate Member (the “Effective Date”).
Corporate Member has requested that Third-Party Sender initiate Entries on behalf of Corporate Member from Corporate Member accounts by means of the Automated Clearing House (“ACH”) Network, where standards, rules, and procedures are established by the National Automated Clearing House Association (“NACHA”), and Third-Party Sender has agreed to provide such services in accordance with the terms of this Agreement.
The Agreement sets out Corporate Member’s rights, responsibilities and obligations, and Third-Party Sender’s rights, responsibilities and obligations, with respect to the services provided by Third-Party Sender under this Agreement. Capitalized terms used in this Agreement are either defined in Exhibit A attached hereto or in the sections in which they are used.
I. Types of Entries
Third-Party Sender will transmit debit and/or credit Entries initiated by Corporate Member to the ACH Network, as provided in the NACHA Operating Rules (together with any exhibits, schedules, addenda, or supplements thereto, the “Rules”) and this Agreement. As used in this Agreement, the following ACH Standard Entry Class (“SEC”) Codes are approved for use by Corporate Member:
PPD - Prearranged Payment and Deposit
Direct Deposit - The transfer of funds into a consumer’s account. Funds being deposited can represent a variety of products, such as payroll, expense reimbursement, interest, pension, dividends, etc.
CCD - Cash Concentration or Disbursement - The distribution or consolidation of funds between corporate entities. To be used to facilitate a stand-alone funds transfer or to support a limited amount of payment related data provided with the funds transfer.
The above SEC Codes are not an all-inclusive list, and Third-Party Sender shall have the right to approve additional SEC Codes from time to time. In addition, Third-Party Sender has identified in Schedule C to this Agreement specific restrictions on the types of ACH transactions that may be originated under this Agreement.
II. Corporate Member expressly acknowledges that Third-Party Sender does not intentionally or knowingly engage in or support International ACH Transactions (“IATs”), as defined in the Rules. Corporate Member represents and warrants that (i) the direct funding for the Entries originated by Third-Party Sender on behalf of Corporate Member does not come from or involve a location outside the territorial jurisdiction of the United States; (ii) Corporate Member will not instruct Third-Party Sender to create, originate, or transmit Entries that use, or should use, IAT as the SEC Code, or are otherwise required to be IATs under the Rules; and (iii) Corporate Member will not engage in any act or omission that causes or results in Third-Party Sender creating, originating, or transmitting an IAT or a payment that should have been categorized as an IAT pursuant to the Rules. Third-Party Sender may, in its sole discretion, temporarily or permanently suspend providing the services provided hereunder to Corporate Member, without liability, if Third-Party Sender has reason to believe that Corporate Member has breached any of the foregoing representations and warranties in this paragraph.
III. The Rules
Corporate Member agrees to comply with and be bound by the current Rules in existence, which may be amended from time to time. The duties of Corporate Member set forth in this Agreement in no way limits the requirements of complying with the Rules. Any fines or liabilities imposed against Third-Party Sender for a violation of the Rules caused by an action and/or inaction of Corporate Member may be assessed against Corporate Member. Costs associated with Rules publications and/or association membership will be the responsibility of Corporate Member. If Corporate Member utilizes a Subcontractor, Corporate Member will take such measures as may be necessary to ensure compliance with the Rules by such Subcontractor.
IV. Laws and Regulations
Corporate Member agrees that it will not generate transactions that violate applicable law, including the laws or regulations of the United States. This includes, but is not limited to, sanction laws administered by the Office of Foreign Assets Control (“OFAC”). It shall be the responsibility of Corporate Member to obtain information regarding such OFAC enforced sanctions. (This information may be obtained directly from the OFAC Compliance Hotline at 800-540-OFAC or from the OFAC’s home page site at www.ustreas.gov/ofac, as such sources may change from time to time.) Corporate Member agrees that any Third-Party Sender obligation to debit or credit an account or transfer funds, as required by the Rules, is excused to the extent that the obligation is inconsistent with applicable law, including the obligations of the Third-Party Sender under OFAC or any program administered by the United States Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN). Corporate Member agrees, represents, and warrants to Third-Party Sender that all actions by Corporate Member contemplated by this Agreement, including the preparation and transmittal of Instructions, shall comply in all material respects with applicable law, regulations, regulatory guidelines and guidance, and official commentaries, including without limitation all such regulations, guidelines, and commentaries issued by the Board of Governors of the Federal Reserve and the Federal Financial Institutions Examination Council (“FFIEC”).
V. Transmission of Entries and Security Procedures.
Third-Party Sender has established the Security Procedures set forth on Schedule D, including the issuance of Security Credentials (as defined on Schedule D) to Authorized Persons, in order to authenticate Corporate Member’s funds transfer instructions (“Instructions”). Corporate Member agrees that the Security Procedures are commercially reasonable. Corporate Member shall establish and maintain strict procedures to maintain the confidentiality and security of the Security Credentials and all other security procedures, passwords, codes, security devices, and related instructions and to safeguard against unauthorized transactions. Corporate Member acknowledges and agrees that any person to whom Corporate Member provides access to any Security Credentials shall be considered an Authorized Person for purposes of this Agreement, with full right, power and authority to use such Security Credentials, including to order transfers on behalf of Corporate Member, and Corporate Member shall be responsible for the actions of each Authorized Person, including all Instructions prepared and/or transmitted by such Authorized Person. If Corporate Member believes or suspects that any Security Credentials or other security information has been accessed by an unauthorized individual or if the authority of any person to use any Corporate Member Security Credentials has been revoked, Corporate Member shall notify Third-Party Sender immediately. The occurrence of such notification will not affect, or cause Third-Party Sender to be liable for, any transfers made in good faith by Third-Party Sender prior to receipt of such notification, or within a reasonable time period thereafter as necessary for Third-Party Sender to disable the Security Credentials or otherwise implement additional steps to prevent unauthorized transfers.
Corporate Member shall transmit Instructions to Third-Party Sender in such form and format as Third-Party Sender may specify from time to time. Corporate Member authorizes Third-Party Sender to (i) prepare Entries using such Instructions received by Third-Party Sender in accordance with the Security Procedures, (ii) transmit such Entries in accordance with the terms of this Agreement, and (iii) credit or debit such Entries to the specified accounts.
This paragraph shall apply to standard ACH transactions: If Corporate Member has provided Instructions to Third-Party Sender prior to the daily cutoff time provided to Corporate Member from time to time (the “Cutoff Time”) on a Business Day (the “Authorization Day”): (i) Third-Party Sender will transmit a credit or debit Entry to an Account designated by Corporate Member, either withdrawing the authorized amount from such Account or depositing the authorized amount to such Account; and (ii) provided that the Entry is not returned, reversed or disputed, Third-Party Sender will transmit a credit or debit Entry, as applicable, to the applicable account of the recipient set forth in the Instructions, in the amount of the authorized payment, for settlement to the recipient’s bank. The foregoing process shall occur at such days and times as provided to Corporate Member from time to time. If Corporate Member has provided Instructions to Third-Party Sender after the Cutoff Time on a Business Day, or on a day other than a Business Day, for purposes of the immediately preceding sentence, the Authorization Day shall instead be the next Business Day after Third- Party Sender’s receipt of such Instructions. Corporate Member acknowledges that Third-Party Sender does not control the timing of the crediting of recipient’s account by the recipient’s bank. Notwithstanding anything in this Agreement to the contrary, Third-Party Sender shall be permitted to delay the performance of its obligations under this Section 4(c) for a reasonable period of time, to the extent Third-Party Sender reasonably suspects that such payments may be fraudulent or otherwise raise legal or regulatory concerns, or compliance concerns.
For authorized payment amounts that are less than thresholds established by Third-Party Sender in its discretion from time to time, Third-Party Sender may, in its discretion, but shall not be required to, transmit debit Entries and credit Entries on an expedited schedule, including to effect a next Business Day payment; provided, however, that Corporate Member shall indemnify and promptly reimburse Third-Party Sender to the extent that any such Entries are returned or disputed by Corporate Member, and Third-Party Sender is unable to recover the applicable amounts from the recipient of the credit Entry.
Third-Party Sender will transmit Entries containing banking information using commercially reasonable standards that comply with applicable regulatory guidelines.
VI. Exposure Limits
Corporate Member shall comply with the monetary file limits established by Third-Party Sender (See Exposure Limits in Schedule B attached to this Agreement).
Corporate Member agrees that Third-Party Sender reserves the right not to process an Overlimit Entry. Third-Party Sender will suspend any Overlimit Entry submitted by Corporate Member and may, following its receipt of an Overlimit Entry, suspend all In-Process Entries. Corporate Member acknowledges that any Overlimit Entry or other In-Process Entries suspended by Third-Party Sender will not settle on their scheduled Settlement Date. If Corporate Member wishes to initiate an Entry that would cause the amount of In-Process Entries to exceed the Entry Settlement Limit, Corporate Member may submit to Third-Party Sender its request to initiate an Entry that otherwise would be an Overlimit Entry. Corporate Member must submit its request at least 2 Business Days prior to the date on which Corporate Member wishes to initiate the Entry that otherwise would be an Overlimit Entry, which Third-Party Sender may approve or deny in its sole discretion. Third-Party Sender may require from Corporate Member financial or other information in connection with Third-Party Sender’s consideration of the request. Third-Party Sender may grant or deny Corporate Member’s request at its sole discretion. In addition to the foregoing, Third-Party Sender generally reserves the right to limit the nature and amount of the preauthorized debit/credit Entries processed under this Agreement or to refuse to process any debit/credit Entries under this Agreement if, in Third-Party Sender’s sole judgment (i) there is reasonable cause to believe that any Entry will be returned or will not settle in the ordinary course of the transaction for any reason, (ii) to do otherwise would violate any limit set by the applicable clearing house association or any governmental authority or agency to control payment system risk, or (iii) a preauthorized credit Entry or the return of a preauthorized debit Entry would create an overdraft of Corporate Member’s Accounts. If any of the foregoing actions are taken by Third-Party Sender with respect to a particular preauthorized debit/credit Entry, Third-Party Sender will notify Corporate Member as promptly as practicable, but in no event later than 2 Business Days after its decision.
VII. Warranties
Corporate Member certifies to Third-Party Sender that, to the extent Third-Party Sender prepares Entries in accordance with the Instructions provided by Corporate Member, Corporate Member shall satisfy all warranties that the Third-Party Sender is deemed by the Rules to make with respect to such Entries. Without limiting the foregoing, Corporate Member warrants and agrees that (a) each Instruction is accurate, is timely, has been authorized by the party whose account will be credited or debited, and otherwise will cause the requested Entry to comply with the Rules; (b) each requested Entry, as set forth in the Instructions, is for the sum which, on the Settlement Date with respect to it will be owing to a party by Corporate Member, is for a sum specified by Corporate Member to be paid to such party, or is a correction of a previously transmitted erroneous Entry; and (c) Corporate Member will comply with the terms of all applicable laws and regulations in the performance of its obligations and exercise of its rights under this Agreement, including all requirements as an Originator under the Rules. Corporate Member shall indemnify Third-Party Sender and hold Third-Party harmless against any loss, liability, or expense (including attorney’s fees and expenses) resulting from or arising out of any breach of any of the foregoing warranties or agreements.
VIII. Additional Representations, Warranties and Covenants
Corporate Member and the Signatory jointly and severally represent, warrant and covenant, as of the Effective Date and continuously thereafter until the termination or expiration of the Agreement, that:
The Signatory has full right, power and authority to bind Corporate Member to the terms of this Agreement;
Corporate Member has provided Third-Party Sender with a true and accurate list of all Authorized Persons, and shall provide Third-Party Sender with prompt written notice of: (i) any person previously identified as an Authorized Person who is no longer authorized to act on behalf of Corporate Member, and (ii) any additional persons who become Authorized Persons;
Each Authorized Person has the full right, power, and authority to prepare and provide Instructions to Third- Party Sender on behalf of Corporate Member;
Third-Party Sender shall have the right to rely conclusively on the Instructions provided by each Authorized Person and each person that accesses the Services using Corporate Member’s Security Credentials, including, but not limited to preparing and providing Instructions on behalf of Corporate Member, regardless of whether any such person has actual authority to act on behalf of Corporate Member;
Each Account used by Corporate Member in connection with the Services is a business account owned exclusively by Corporate Member, and not a personal account of any individual, and Corporate Member has the authority to use the Account in the manner contemplated by this Agreement; and
Corporate Member has implemented, and shall maintain, measures that ensure only Authorized Persons (i) are able to access and use the Services on behalf of Corporate Member, (ii) are able to prepare and provide Instructions to Third-Party Sender on behalf of Corporate Member, and (iii) have access to, and the ability to use, each Account.
IX. Third-Party Sender Obligations
In accordance with the Rules, to the extent that Third-Party Sender receives complete and accurate Instructions from Corporate Member, Third-Party Sender will process, transmit, and settle Entries that are based on such Instructions, in compliance with the terms of this Agreement, including the Security Procedures. Third-Party Sender shall have no obligation to transmit Entries if Corporate Member is in default of any of its obligations under this Agreement, including any obligation to pay Third-Party Sender.
X. Corporate Member’s Account; Payment of Entries
Account. Corporate Member will maintain an Account at all times during the term of this Agreement and until the period for Return Entries has elapsed. Corporate Member will maintain in the Account immediately available funds sufficient to cover Corporate Member’s obligations under this Agreement, including all credit Entries originated and returns of debit Entries previously originated by Corporate Member. Corporate Member hereby authorizes and instructs Third-Party Sender to make deposits, withdrawals and transfers to and from Corporate Member’s Accounts as appropriate or necessary in connection with any of the services provided by Third-Party Sender under this Agreement. Notwithstanding anything in this Agreement to the contrary, Third-Party Sender reserves the right to require that sufficient collected funds be in Corporate Member’s Accounts prior to the time any Entry is processed by Third-Party Sender under this Agreement. If balances in the Account are insufficient to cover the aggregate amount of Entries, Third-Party Sender shall have no obligation to transmit such Entries.
Debit Entries. Third-Party Sender shall on the applicable Settlement Date credit the Account referenced in an Instruction with the amount of each debit Instruction provided to Third-Party Sender.
Credit Entries. Third-Party Sender reserves the right to require that Corporate Member pay Third-Party Sender in immediately available funds at the time of transmittal, or at any time prior to settlement, the amount of each credit Entry submitted by Corporate Member.
XI. Reserve Amount
At the election of Third-Party Sender, Corporate Member shall provide funds to Third-Party Sender sufficient to maintain a balance (the “Reserve Amount”), to be owned by Third-Party Sender in an amount as determined by Third-Party Sender. Corporate Member shall not have access to the funds comprising the Reserve Amount except as may be subject to refund under this section. Corporate Member shall pay to Third-Party Sender the initial Reserve Amount within five (5) days after requested by Third-Party Sender. At the close of each calendar month during the term upon notice to Corporate Member, Third-Party Sender may increase the Reserve Amount to an amount equal to one percent (1%) of the average daily volume of all transfers during the previous calendar month, such percentage as reasonably determined by Third-Party Sender. Corporate Member will, within five (5) days of Third-Party Sender’s request, pay to Third-Party Sender, in a manner as directed by Third-Party Sender, funds necessary to achieve that required amount. Third-Party Sender is authorized to transfer funds from the funds comprising the Reserve Amount at any time without prior notice to Corporate Member (but with notice as soon as practicable thereafter) in amounts necessary to cover any shortfall in the Account (if any), to cover daily activity under this Agreement, to cover fines or penalties imposed solely as a result of Corporate Member’s breach of this Agreement, or to cover any other obligations of Corporate Member under this Agreement that are not paid when due. Such transfer of funds to Third-Party Sender shall be without prejudice to any other remedy that may be available to Third- Party Sender pursuant to applicable law or equity or this Agreement. Not later than ninety (90) days after the termination or expiration of this Agreement, Third-Party Sender will refund to Corporate Member any remaining Reserve Amount funds, after payment of all obligations owed by Corporate Member to Third-Party Sender. For avoidance of doubt, Corporate Member holds no ownership or possessory interest in the funds comprising the Reserve Amount; its rights to the funds comprising the Reserve Amount are solely contractual in nature and as set forth in this Agreement.
XII. Security Interest
In order to secure the prompt payment and performance of all of Corporate Member’s obligations to Third- Party Sender under this Agreement, Corporate Member hereby grants to and in favor of Third-Party Sender a security interest in, to, and covering all of Corporate Member’s Accounts, including all amounts (including reserves) held in the Accounts at any time and from time to time. In the event Corporate Member initiates insolvency or bankruptcy proceedings, Third-Party Sender shall be deemed a secured party for all purposes with respect to the Accounts and all amounts held in the Accounts.
XIII. Prohibited Transactions
Corporate Member agrees not to use or attempt to use the Services (a) to engage in any illegal purpose or activity or to violate any applicable law, rule or regulation, (b) to breach any contract or agreement by which Corporate Member is bound, (c) to engage in any internet or online gambling transaction, whether or not gambling is legal in any applicable jurisdiction, or (d) to engage in any transaction or activity that is not specifically authorized and permitted by this Agreement. Corporate Member acknowledges and agrees that Third-Party Sender has no obligation to monitor Corporate Member’s use of the Services for transactions and activity that is impermissible or prohibited under the terms of this Agreement; provided, however, that Third-Party Sender reserves the right to decline to execute any transaction or activity that Third-Party Sender reasonably believes violates the terms of this Agreement. Third-Party Sender shall provide written notice to Corporate Member of its decision to exercise such right.
XIV. Provisional Credit
Corporate Member acknowledges that (a) the Rules make provisional any credit given for an Entry until the Third-Party Sender crediting the account specified in the Entry receives final settlement, and (b) if Third- Party Sender does not receive final settlement, Third-Party Sender is entitled to a refund from the credited party, and the originator of the Entry (i.e., the Corporate Member) shall not be deemed to have paid the credited party.
XV. Cancellation or Amendment of Entries
Corporate Member shall have no right to cancel or amend any Instructions for an Entry after receipt of such Instructions by Third-Party Sender. However, Third-Party Sender shall use reasonable efforts to act on a request by Corporate Member to cancel an Entry before transmitting it to the ACH Network or processing it as an on-us Entry. Third-Party Sender shall have no liability if it fails to effect the cancellation. Corporate Member shall reimburse, indemnify and hold harmless Third-Party Sender for any expenses (including attorneys’ fees), losses or damages the Third-Party Sender incurs in effecting or attempting to effect Corporate Member’s request for the cancellation of an Entry.
XVI. Rejection of Entries
Third-Party Sender may reject any Entry, including an on-us Entry, which does not comply with the requirements of this Agreement and may reject any Entry if Corporate Member is not otherwise in compliance with the terms of the Agreement. Third-Party Sender shall notify Corporate Member of such rejection no later than the Business Day such Entry would otherwise have been transmitted by Third-Party Sender to the ACH Network or, in the case of an on-us Entry, its effective Entry date. It shall be the responsibility of Corporate Member to correct any Instructions for Entries rejected by Third-Party Sender prior to resubmission.
XVII. Return Entries
Third-Party Sender shall notify Corporate Member of the receipt of a Return Entry from the ACH no later than 2 Business Days after the Business Day of such receipt. Third-Party Sender shall have no obligation to re-transmit a Return Entry if Third-Party Sender complied with the terms of this Agreement with respect to the original Entry. Corporate Member authorizes Third-Party Sender to charge back returns to Corporate Member’s designated Account the amount of any Return Entry as soon as information is made available to Third-Party Sender. Corporate Member will promptly provide immediately available funds to indemnify Third- Party Sender if any debit Entry is returned after Third-Party Sender has permitted Corporate Member to withdraw funds in the amount thereof, or if any adjustment memorandum that relates to such Entry is received by Third-Party Sender.
XVIII. Re-initiation of Returned Entries
Corporate Member agrees it shall not reinitiate Instructions for a Return Entry unless (i) the Entry has been returned for insufficient or uncollected funds, (ii) the Entry has been returned for stopped payment and reinitiation has been authorized by the Receiver (as defined in the Rules), or (iii) the Corporate Member has taken corrective action to remedy the reason for the return. Corporate Member also agrees that Instructions for Entries returned for insufficient or uncollected funds will only be reinitiated twice within 180 days.
XIX. Entries Returned as Unauthorized
In the event that a Return Entry is returned as unauthorized or authorization revoked, the Corporate Member will contact the necessary parties and resolve any dispute. During this process the Corporate Member may ask the Third-Party Sender to request from the RDFI a copy of the “Written Statement of Unauthorized Debit.” Third-Party Sender will use commercially reasonable efforts to obtain the form and will deliver it to the Corporate Member when received. Corporate Member agrees not to re-originate any Return Entry returned as unauthorized or as authorization revoked unless the customer reauthorized the Entry.
XX. Reversals
Corporate Member may initiate Instructions for a reversing Entry for erroneous or duplicate transactions, as permitted by the Rules. In doing so Corporate Member warrants that it has initiated the Instructions for reversing Entries within 5 Business Days of the original Entry or Entries and within 24 hours of discovery of the error. Corporate Member also warrants that the account holder of a reversing Entry has been notified of the reversal, and the reason for the reversal, no later than the settlement day of the reversal. For both reversing Entries, Corporate Member indemnifies all parties of the transaction(s) from and against any claim, demand, loss, liability, or expense.
XXI. Error Detection
Third-Party Sender has no obligation to discover and shall not be liable to Corporate Member for errors made by Corporate Member, including but not limited to errors made in identifying the receiver, or an intermediary or RDFI, or for errors in the amount of an Entry or for errors in Settlement Dates. Third-Party Sender shall likewise have no duty to discover and shall not be liable for duplicate Entries issued by Corporate Member. Notwithstanding the foregoing, if the Corporate Member discovers that any Entry it has initiated was in error, it shall notify the Third-Party Sender of such error. Third-Party Sender will use commercially reasonable efforts to initiate an adjusting Entry or stop payment of any on-us Entry within the time limits provided by the Rules. In the event that Corporate Member makes an error or issues a duplicate Entry, Corporate Member shall indemnify and hold Third-Party Sender harmless from any loss, damages, or expenses, including but not limited to attorney's fees, incurred by Third-Party Sender as a result of the error or issuance of duplicate Entries.
XXII. Name and Account Number Inconsistency
Corporate Member acknowledges that, if an Entry describes the receiver inconsistently by name and account number, payment of the Entry may be made as provided in the Rules on the basis of the account number even if it identifies a party different from the named receiver.
XXIII. Notifications of Change
Third-Party Sender agrees to forward notifications of change (“NOCs”) to Corporate Member within 2 Business Days of receiving such NOCs. Corporate Member agrees to respond to NOCs by investigating incorrect data and making corrections within 6 Business Days of receipt or prior to initiating another Entry to the receiver’s account, whichever is later, or initiate a refused NOC. If Corporate Member is unable to handle a NOC, it agrees to Third-Party Sender so that a refused NOC can be initiated within fifteen (15) days of the receipt of the NOC.
XXIV. Reimbursement Limitations
Notwithstanding anything in this Agreement to the contrary, Third-Party Sender shall be permitted to retain any reimbursement payments for up for 48 hours prior to transmitting such payments to the appropriate party or account, to the extent Third-Party Sender reasonably suspects that such payments may be fraudulent or otherwise raise legal or regulatory concerns, or compliance concerns.
XXV. Review of Account Statements
Corporate Member agrees to notify Third-Party Sender within a reasonable time not to exceed 30 calendar days (except where applicable law provides a 60 calendar day review period) after Corporate Member receives or is provided access to a periodic statement of any discrepancy between Corporate Member’s records and the information in the periodic statement or any allegedly unauthorized transaction appearing on the periodic statement that was originated through Third-Party Sender. If Corporate Member fails to identify any discrepancy or unauthorized transaction within such time limitation, Corporate Member conclusively waives any and all rights it may have with respect thereto under this Agreement or applicable law or regulation, to the full extent permitted by applicable law or regulation. For the avoidance of doubt, the foregoing shall not restrict any other direct or indirect limitation of Third-Party Sender’s liability under this Agreement.
XXVI. Fees
Corporate Member authorizes Third-Party Sender to debit its designated Account for services provided under the Agreement in accordance with the schedule of fees and charges attached to this Agreement. Third-Party Sender may change its fees from time to time upon written notice to Corporate Member.
XXVII. Liability
Third-Party Sender shall be responsible only for performing the services expressly provided for in the Agreement, and shall be liable only for its gross negligence or willful misconduct in performing those services. In no event shall Third-Party Sender have any liability for any consequential, special, punitive, or indirect loss or damage, which Corporate Member may incur or suffer in connection with this Agreement. In addition, Third-Party Sender shall be excused from failing to act or delay in acting if such failure or delay is caused by legal constraint, interruption of transmission or communications facilities, equipment failure, war, emergency conditions, or other conditions beyond Third-Party Sender’s control. Third-Party Sender shall not be held liable for any delay by an ACH Operator or Receiving Depository Financial Institution in processing any credit or debit Entry Corporate Member originates, nor shall it be held liable for the failure of a third party to process, credit, or debit any such Entry, or for other acts of omission.
XXVIII. Additional Indemnity
Corporate Member shall indemnify Third-Party Sender and hold Third-Party harmless against any loss, liability, or expense (including attorney’s fees and expenses) resulting from or arising out of:
The breach of any representation, warranty or covenant set forth in Section 7;
Any act or omission of any Authorized Person, and any person who accesses the Services using Corporate Member’s Security Credentials or otherwise performs any activities on behalf of Corporate Member under the Agreement; and
Third-Party Sender’s debiting, crediting, or transmission of funds to or from any account based on Instructions received from an Authorized Person, or a person otherwise accessing the Service using Corporate Member’s Security Credentials.
XXIX. Loss Recovery
Corporate Member agrees to cooperate with the Third-Party Sender in performing loss recovery efforts in the event Third-Party Sender may be liable to the Corporate Member for damages.
XXX. Termination or Suspension of Agreement
Either party may terminate this Agreement upon 7 calendar days written notice to the other; provided however that Third-Party Sender may terminate or suspend this agreement immediately upon its determination that Corporate Member is in violation of, or anticipated to be in violation of, this Agreement, the Rules or applicable laws, if Corporate Member initiates any bankruptcy proceeding or is otherwise declared insolvent, or if Corporate Member is in breach under any other agreement between Corporate Member and Third-Party Sender. Any termination or suspension of this Agreement shall not affect any of Third-Party Sender’s rights or Corporate Member’s obligations with respect to any Entries initiated by Corporate Member prior to such termination or suspension, or the payment obligations of Corporate Member with respect to services performed by Third-Party Sender prior to such termination or suspension, or any other obligations that survive termination or suspension of this Agreement. Corporate Member’s obligation with respect to any Entry shall survive termination or suspension of this Agreement until any applicable statute of limitation has elapsed. Any suspension of this Agreement by Third-Party Sender pursuant to this Section 29 shall not preclude Third-Party Sender from subsequently terminating this Agreement, including terminating this Agreement based on the same violation for which it suspended the Agreement.
XXXI. Retention
Record of each Entry shall be retained for 6 years from the Effective Entry Date, except as otherwise expressly provided in these Rules.
XXXII. Audit and Review
Corporate Member agrees, upon reasonable notice by Third-Party Sender, to permit Third-Party Sender to audit, inspect, and review its policies and processes, as well as the policies and processes of any Subcontractor, for purposes of ensuring the Corporate Member’s compliance with this Agreement, the Rules, and applicable laws and regulations. Corporate Member acknowledges that Third-Party Sender may from time to time require that Corporate Member develop and adopt internal controls and processes related to ACH origination as mandated by Third-Party Sender as a condition to Third-Party Sender’s agreement to continue to provide the Services to Corporate Member.
XXXIII. Authorizations
Corporate Member shall obtain an authorization, to the extent required by the Rules, from the person or entity whose account will be debited or credited as the result of a debit or credit Entry initiated by Corporate Member. Corporate Member shall retain an original or a copy of each written authorization, or a record evidencing any other authorization, for 2 years after termination or revocation of such authorization, or for such other period as required by the Rules. It is the sole responsibility of the Corporate Member to verify that the individual providing the authorization is, in fact, entitled to use of the specified account. The Corporate Member's obligation to pay the amount of the Entry to Third-Party Sender is not excused if the individual providing the authorization is not entitled to use of the specified account. Corporate Member shall provide a copy of such written authorization, or record evidencing any other authorization upon request from Third- Party Sender or any RDFI, including in response to an alleged unauthorized transaction or error.
XXXIV.Amendments
From time to time Third-Party Sender may amend any of the terms and conditions contained in this Agreement, including any part of Schedules A through D attached hereto. Such amendments shall become effective upon receipt of notice by Corporate Member or at such time that the amended Agreement is otherwise made available to the Corporate Member, to the extent permitted by the Rules, or such later date as may be stated in Third-Party Sender’s notice to Corporate Member.
XXXV. Additional Provisions relating to Third Parties
If the Signatory to this Agreement is a Subcontractor of Corporate Member, Signatory represents and warrants that Signatory has the power and authority to agree to the following, on behalf of the Subcontractor, and hereby agrees to the following additional terms, on behalf of Subcontractor:
Signatory represents, warrants and covenants, on behalf of Subcontractor that:
Subcontractor has full right, power and authority to bind Corporate Member to the terms of this Agreement, including, but not limited to, the authority to bind Corporate Member to all representations, warranties and covenants of Corporate Member as set forth in this Agreement;
Subcontractor has full right, power and authority to transmit Instructions to Third-Party Sender for the purpose of initiating Entries to each Account on behalf of Corporate Member, including for the purpose of debiting Corporate Member’s Account; and
Third-Party Sender shall have the right to rely conclusively on the authority of Subcontractor to act on behalf of Corporate Member, including, but not limited to, the authority to transmit Instructions on behalf of Corporate Member and the authority to initiate Entries based on such Instructions.
In the event that Corporate Member disputes the validity of any Instruction transmitted by Subcontractor to Third-Party Sender, or any Entry initiated or transmitted by Third-Party Sender based on such Instructions, Subcontractor shall cooperate with Third-Party Sender and use Subcontractor’s best efforts to ensure that Corporate Member cooperates in efforts to resolve such disputes.
Subcontractor shall indemnify Third-Party Sender against any loss, liability, or expense (including attorney’s fees and expenses) resulting from or arising out of:
The breach of any representation, warranty or covenant set forth in this Section 34;
Any Instruction transmitted by Subcontractor to Third-Party Sender, or any Entry initiated by Third- Party Sender based on such Instructions;
Any claim by Corporate Member that Subcontractor is not authorized to act on behalf of Corporate Member; and
Any act or omission of Subcontractor or any person acting on behalf of Subcontractor with respect to this Agreement or the Service.
Subcontractor agrees to participate in such account validation processes as Third-Party Sender may require, in order to validate Subcontractor’s authority to act on behalf of Corporate Member as provided in this Agreement.
XXXVI.Third Party Check Payment
At the Corporate Member's sole discretion, you may be offered Payment Processing Services provided by Checkbook (“Corporate Member Payments”). Corporate Member Payments are subject to the Checkbook Business Terms and Conditions. As a condition of the Corporate Member enabling Payment Processing Services through Checkbook, you agree to provide the Corporate Member accurate and complete information about you and your business, and you authorize the Corporate Member to share it and transaction information related to your use of the Payment Processing Services provided by Checkbook pursuant to our Privacy Policy.
XXXVII. Dispute Resolution
In addition to the dispute resolution provisions set forth in the global Terms of Service, you further agree that for any disputes arising under these ACH Terms, any party may seek provisional remedies in aid of arbitration from a court or other tribunal of appropriate jurisdiction, including without limitation, by invoking Emergency Relief Procedures pursuant to Rule 2(c) of the JAMS Comprehensive Arbitration Rules and Procedures, or by seeking expedited relief in court.
XXXVIII. Miscellaneous
This Agreement, including Exhibit A and the attached Schedules A through D supersedes any prior agreement(s) between Third-Party Sender and Corporate Member with respect to such subject matter. Corporate Member may not assign this Agreement or any of the rights or duties hereunder without Third- Party Sender’s prior written consent. Third-Party Sender may waive enforcement of any provision of this Agreement. Any such waiver shall not affect Third-Party Sender’s rights with respect to any other transaction or modify the terms of this Agreement. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective legal representatives, successors, and assigns. This Agreement is not for the benefit of any other person, and no other person shall have any right against Third-Party Sender or Corporate Member hereunder. In the event that any provision of this Agreement shall be determined to be invalid, illegal, or unenforceable to any extent, the remainder of this Agreement shall not be impaired or otherwise affected and shall continue to be valid and enforceable to the fullest extent permitted by law. Third-Party Sender shall be entitled to rely on any written notice believed by it in good faith to be signed by one of the authorized representatives whose names and signatures are set forth in this Agreement and the implementation process and forms. This Agreement shall be governed by and construed in accordance with the laws off the United States of America and the State of Delaware.
Exhibit A Definitions
“ACH Network” means the funds transfer system (network) governed by the NACHA Rules which provides for the clearing of electronic entries for participating financial institutions and Third-Party Senders.
“Account” means an account Corporate Member has with a financial institution that Third-Party Sender permits to be linked to a Service.
“Agreement” means this Agreement for ACH Services, which may change from time to time. All references to Agreement include all Exhibits, Schedules, and Addendums thereto, and any User Guides or similar documentation that Third-Party Sender provides to Corporate Member from time to time.
“Authorized Person” means any person, including a Subcontractor, who is authorized to act on behalf of, and bind, Corporate Member, who has been issued Security Credentials on behalf of Corporate Member, or who has been provided access to Security Credentials issued to any Authorized Person.
“Business Day” means any day that is not a Saturday, Sunday or a day on which commercial banks in the United States are required or permitted to be closed.
“Effective Entry Date” means the date placed on an ACH transaction by the Originator of the transaction by the Originator of the transaction or the ODFI - it is normally the date the Originator or ODFI intends the transfer to take place.
“Electronic Funds Transfer Act” means the law passed by the US congress in 1978, which set out the rights and obligations of consumers and their financial institution regarding the use of electronic systems to transfer funds. This act is implemented in the Federal Reserve Bank’s Regulation E.
“Entry Settlement Limit” means the maximum aggregate amount of In-Process Entries permitted to be outstanding at any time, which amount shall be separately communicated to Corporate Member by Third- Party Sender in writing from time to time.
“Entries” mean credit Entries and debit Entries, as well as On-Us Entries consistent with the NACHA Rules.
“In-Process Entries” means the aggregate dollar amount of all credit or debit Entries initiated by Corporate Member and in process on any date for which settlement has not occurred with respect to credit Entries, or the applicable period for the return of items has not expired with respect to debit Entries.
“Originator” means a Corporate Member, individual or entity that initiates entries into the ACH Network.
“Overlimit Entry” means an Entry the amount of which would cause the aggregate amount of In-Process Entries to exceed the Entry Settlement Limit.
“Password” means confidential, unique personal numbers, codes, marks, signs, public keys or other information composed of a string of characters used as a means of authenticating and accessing a Service.
“RDFI or Receiving Depository Financial Institution” means a financial institution qualified by NACHA to receive ACH transactions.
“Regulation E” means the regulation published by the Federal Reserve Bank to implement the Electronic Fund Transfer Act mandating consumer rights and obligation with regard to electronic fund transfers.
“Return Entry or Return Entries” mean any item, which cannot be processed and is being returned by the RDFI to the ODFI for correction or re-initiation.
“SEC Codes” or Standard Entry Class codes mean the three-character code within an ACH Corporate Member/batch header, which identifies the type of transactions within that batch (e.g. CCD, PPD, etc.).
“Service” means the ACH services and features of those services which Third-Party Sender may provide from time to time to Third-Party Sender’s commercial or small business customers.
“Settlement Date” means the date on which settlement occurs, i.e., funds actually change hands as a result of an ACH entry.
“Signatory” means the person accepting and agreeing to this Agreement on behalf of Corporate Member.
“Subcontractor” means a third party that performs any of Corporate Member’s obligations hereunder.
Schedules
Schedule A - Fees
Fee Schedule: Corporate Member authorizes Third-Party Sender to debit any of the following fees from Corporate Member’s Account from time to time as appropriate:
Return/NOC $20 per occurrence Deletions or Reversals $50 per occurrence
Schedule B - ACH Exposure Limits
Per Entry Limit $20,000
Schedule C - Restricted ACH Transactions
Third-Party Sender has identified the following ACH transaction restrictions:
Corporate Member is restricted to reimbursement of business expenses, and where applicable (i) payments to business contractors and consultants, and/or (ii) for settlement of Expensify card transactions.
Schedule D - Security Procedures
Corporate Member will select a user name and Password and/or other sign-on mechanism (collectively, the “Security Credentials”).
An Authorized Person of the Corporate Member shall provide the following information in order for Third- Party Sender to perform verification tests (as described below):
§ business name,
§ IRS-issued tax ID number,
§ business account and routing number,
§ business address,
§ personal name,
§ residential address and
§ birthdate.
Corporate Member, or an Authorized Person of the Corporate Member, also shall provide to Third-Party Sender certain personal information with respect to the ultimate beneficial owners of the Corporate Member’s business bank account(s) (the “UBOs”), including without limitation the last four digits of each UBO’s social security number.
Third-Party Sender will conduct tests to verify (1) that Corporate Member is a valid legal entity by TINCheck or a similar service, and (2) the identity of the Authorized Persons who will have access to withdraw funds from the directed bank account for reimbursement purposes, by (a) cross referencing the owners of the account with the Authorized Persons, (b) asking a set of specific security questions that only the Authorized Persons would know, (c) if necessary, requesting two personal documents with the user’s name and address clearly listed, and using a database such as LexisNexis to confirm that information provided is valid, and (d) conducting such other verification tests as Third-Party Sender, in its discretion, determines are necessary.
Third-Party Sender also shall confirm the identity of UBOs by conducting the activities described in clauses (a), (c), and (d) above, but in connection with such UBOs.
Corporate Member agrees to receive three test transactions from Third-Party Sender to the Account in order to validate the Account. After validation, the Corporate Member agrees to receive emails from Third-Party Sender regarding any shared access of the Account to flag any possible fraudulent activity.
If a bank account being added by a user belongs to a bank that is integrated with Third-Party Sender’s risk verification platforms, Third-Party Sender may warn the user if Third-Party Sender receives an alert that the account does not belong to the person setting it up or if the account details do not match a valid bank account. Third-Party Sender may request additional documentation/supporting documents to verify the identity of the user and ownership of the account.
If the default deposit account on file is modified, a fraud alert email will be sent to notify the user of the change in an attempt to flag fraudulent activity on the account.
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