Common use of Pricing Model Clause in Contracts

Pricing Model. 2.1. The Interchange ++ pricing model is a dynamic pricing model that is based on the real costs associated with the various parties involved in payment transaction processing. The merchant service fee that is used in this model, is composed of the interchange fee, the card scheme fee, and a service fee. i. The interchange fee is a compensation which ISXPay or ISXPay in conjunction with Third Party Acquirer acting as an Third Party Acquirer, is required to directly or indirectly pay to the Card issuer (typically a bank) for every transaction. The interchange fee amount is determined by several factors, such as the type of authentication and security (chip, contactless, 3DSecure, magnetic card strip, etc.), the brand and type of Card (corporate or consumer, debit, credit, prepaid, etc.), as well as the geographical location of the Merchant and the cardholder. For consumer cards, the aforementioned EU legislation imposes a maximum of 0.2% per transaction for transactions with debit cards, and 0.3% for transactions with credit cards. In the Interchange ++ pricing model, the interchange fee will be applied on a "pass- through" basis. Per transaction, ISXPay will therefore use the effectively applicable interchange fee to calculate the total merchant service charge. ii. The scheme fee relates to the costs associated with the services rendered by the Card Schemes with respect to transactions — such as the costs of clearing, connectivity and marketing. The scheme fee amount is determined by various factors, such as the origin of the cardholder, the Card Scheme, the type of Card and the transaction amount. The scheme fee is also applied on a "pass- through" basis. Per transaction, ISXPay will therefore use the effectively applicable scheme fee in order to calculate the total merchant service charge. iii. The Merchant Service Fee (MSF) or Merchant Discount Rate (MDR) is ISXPay’s compensation for the services that directly relate to the effective processing of transactions — such as the processing, the payment of the merchant and the reporting. ISXPay determines the service fee on a per-merchant basis, taking into account the expected transaction volume and the average trans- action amount. The service fee does not cover the costs of services that are only indirectly linked to the effected transaction processing: such costs will be indicated on the Order Form/Cover Document, and will be separately charged (e.g., the costs of disputes and charge backs; the cost of activations; the cost of rejected authorizations; the cost of anti-money-laundering and PCI/DSS obligations; etc.). The service fee also does not cover exceptional services (e.g., foreign ex- change risk, non-SEPA settlements, etc. for which ISXPay shall also have the right to invoice additional charges).