EFTA Document EFTA01377717

S- I/A Payment Processing Overview oicnat. FO 0 RECEIPT = - SQUARE POINT OF SALE BUYER 0 C) BILLING 0 0 SQUARE (PAYMENT SERVICE PROVIDER) 0 SELLER 0 • BUYER OR SELLER INTERACTION WITH SQUARE n FAST ACCESS • TO FUNDS 1. Once the Buyer is ready to make a purchase, the Seller inputs the transaction into the Square point-of-sale (POS) and presents the Buyer with the amount owed. 2. The Buyer pays for the transaction by swiping or dipping their payment card, or by tapping their NFC-enabled mobile device on the Square Reader or Square Stand, which captures the Buyer's account information. 3. The Square POS sends the payment transaction information to Square, which acts as the Payment Service Provider (PSP). 4. Square passes the payment transaction information to the Acquiring Processor via an intemet connection. Square pays a small fixed fee per transaction to the Acquiring Processor. 118 Table of Contentr, 5. The Acquiring Processor routes the payment transaction to the appropriate Card Network affiliated with the Buyer's card such as Visa, Mastercard, Discover, or American Express. Square pays a variety of fees to the Card Network, the most significant of which are assessment fees that are typically less than 0.15% of the transaction amount. 6. The Acquiring Processor then routes the payment transaction through the Card Network to the Issuing Bank, which authorizes or declines the payment transaction for the Buyer's payment card. 7. Upon authorization, the Issuing Bank sends a notification back through the Card Network to the Square POS to inform the Seller that the transaction has been successfully authorized. 8. The Square POS sends a digital receipt for the transaction to the Buyer, enabling a persistent communication channel between the Seller and the Buyer. For example, this is how the Buyer can send feedback to the Seller about the service provided. 9. The Issuing Bank then triggers a disbursement of funds to the Acquiring Bank through the Card Network for the transaction amount. Square will ultimately pay the Issuing Bank an interchange fee as a percentage of the amount of the transaction plus a fixed fee per transaction, which together average between 1.5% to 2.0% of the transaction amount. However, this http://www.see.gov/Archivestedgaildata/1512673AMS)119312515369092/d937622dsla.hunl11/6/2015 7:37:12 AMI CONFIDENTIAL - PURSUANT TO FED. R. GRIM. P. 6(e) CONFIDENTIAL DB-SDNY-0074868 SDNY_GM_00221052 EFTA01377717