Merchant Acceptance Policy

1. Introduction

Bags App operates as a Merchant of Record (“MoR”) for digital products and services, providing payment processing (including stablecoin and card payments), global tax compliance, subscription management, and compliance infrastructure. As the MoR, Bags App is the legal seller of every product and service transacted through our platform. This means we assume responsibility for payment processing, tax collection and remittance, chargeback management, and regulatory compliance on every transaction. Because of this responsibility, we maintain clear standards for the types of businesses and products we can resell. This policy outlines the businesses we support, the categories we restrict or prohibit, and how we enforce these standards. This is not an exhaustive list. Bags App reserves the right to update this policy at any time, and to place any account under review, suspend, or terminate it if we determine the business model to be deceptive, harmful, high‑risk, in violation of applicable law, or in conflict with the requirements of our payment and compliance partners.

2. Businesses We Support

We built Bags App for builders who are creating real, valuable digital products and services. We are especially excited to support the following categories:

2.1 Core Categories

• SaaS and Software Products.Cloud‑based software, developer tools, productivity applications, project management platforms, CRM systems, analytics tools, and any subscription or one‑time‑purchase software delivered digitally.
• AI Products and Services.AI‑powered applications, machine learning platforms, AI APIs, generative AI tools, computer vision products, NLP services, and AI infrastructure platforms.
• Developer Tools and Infrastructure.APIs, SDKs, code libraries, CI/CD tools, testing frameworks, monitoring services, database tools, and developer‑focused platforms.
• Digital Content and Downloads.Templates, themes, plugins, design assets, fonts, icons, stock media, e‑books, courses, and other downloadable digital goods.
• x402 and Agentic Payment Services.APIs, data feeds, compute resources, and digital services monetized through the x402 protocol (HTTP 402 pay‑per‑use payments). This includes AI agents autonomously purchasing API access, data, compute, and other programmatic services using stablecoin micropayments.

2.2 Developer Infrastructure and B2B Software In contrast to traditional Merchant of Record solutions, Bags App provides specialized support for B2B entities developing infrastructure and tools for decentralized ecosystems. We classify these strictly as developer utilities and enterprise SaaS. Supported businesses must not facilitate the custody, exchange, or transmission of virtual assets. We accept the following software sub‑categories, contingent upon enhanced review:

• Web3 Tooling and Frameworks. Development environments, smart contract frameworks, decentralized SDKs, node infrastructure services, and data indexing or querying APIs.
• Data Platforms and On‑Chain Analytics. Block explorers, monitoring dashboards for decentralized finance, wallet analytics tools, and APIs for risk scoring and compliance.
• Non‑Custodial Infrastructure.Wallet software suites, SDKs for wallet integration, and multi‑signature management platforms. This excludes any custodial service that maintains control over user funds.

Note: Every application in these developer‑focused categories undergoes rigorous verification during onboarding to ensure no custodial or exchange functionalities are present.

3. Merchant Evaluation Criteria

Regardless of category, we evaluate every merchant against the following criteria:

• Legal Compliance. Your product complies with applicable laws in the jurisdictions where you operate and sell, including consumer protection, data privacy, export control, and intellectual property laws.
• Genuine Value and Performance Metrics. Your product delivers real, tangible value to the buyer. Merchants must maintain a chargeback rate below 0.9% and a refund rate below 3% of total transaction volume to remain in good standing. Products with higher rates may be suspended or terminated.
• Clear Digital Delivery.Your product is delivered digitally, either immediately upon purchase or through a clearly defined automated fulfillment mechanism. Physical goods, in‑person services, and fully manual/bespoke consulting are not supported.
• Honest Marketing.Your product pages, checkout flows, and marketing materials are truthful, non‑deceptive, and do not employ dark patterns, misleading claims, or manipulative urgency tactics.
• Low Chargeback and Refund Risk. Your product has a reasonable expectation of customer satisfaction. Products designed to extract payment rather than solve real problems, or with a history of high chargebacks or refunds, will not be accepted.
• ROSCA and Subscription Management. Businesses utilizing recurring billing models must adopt the Bags App native checkout and billing infrastructure. Our system automates the necessary disclosures, consent protocols, and simplified cancellation tools required to maintain full adherence to the Restore Online Shoppers’ Confidence Act (ROSCA).

4. Prohibited Businesses

The following categories are prohibited and cannot use Bags App under any circumstances. This list reflects our obligations under applicable law, card network rules (Visa, Mastercard, American Express), Payment Service Provider policies (Stripe/Adyen), AML/sanctions regulations, and our own risk standards.

4.1 Illegal and Harmful

• Illegal Products or Services. Anything illegal in the jurisdictions where your business is located or targeted, including but not limited to illegal drugs, drug paraphernalia, substances designed to mimic illegal drugs, and equipment for making or using drugs.
• Violence and Harm.Products or content that engage in, encourage, promote, or celebrate unlawful violence or physical harm to persons or property, including weapons, firearms, explosives, ammunition, DIY weapon instructions, self‑defense weapons, combat training, and content glorifying violence.
• Hate and Discrimination. Products or content that promote violence, hatred, or discrimination against any group based on race, religion, disability, gender, sexual orientation, national origin, or any other protected characteristic.
• Child Exploitation.Any content or services that exploit, endanger, or sexualize minors in any way. This is a zero‑tolerance category.
• Human Trafficking and Exploitation. Any product or service that facilitates or promotes human trafficking, forced labor, or exploitation of persons.

4.2 Financial and Regulatory

• Unlicensed Financial Services. Banking services, lending, credit, escrow, stored value, investment advisory, wealth management, trading bots, trading signals, brokerage, financial planning, or any service that requires financial licensing unless the merchant holds all required licenses and provides proof to Bags App.
• Cryptocurrency Exchanges and Custodial Services.Crypto‑to‑crypto exchanges, crypto‑to‑fiat exchanges, custodial wallet services that hold user funds, and any service that facilitates the buying, selling, or trading of virtual assets.
• Token Launches, ICOs, and Fundraising. Initial coin offerings, token generation events, token sales, security token offerings, or any form of crypto fundraising or investment scheme.
• Prohibited Businesses include any transaction‑initiating protocol that operates outside of Bags App’s pre‑approved smart contract parameters. Any protocol or programmatic agent utilizing the x402 infrastructure must route exclusively through Bags App’s verified compliance gateways.
• NFT Platforms and Marketplaces.Platforms for minting, buying, selling, or trading non‑fungible tokens.
• Money Transmission Without Licensing. Any service that transmits money or value on behalf of others without holding the required MSB registration, money transmitter licenses, or equivalent authorizations.
• Tax Evasion, Shell Entities, and Regulatory Arbitrage. Products, services, or business structures designed to evade taxes, mask beneficial ownership, or bypass financial or legal regulations.
• Credit Repair Services. Services that claim to improve consumer credit scores or remove negative information from credit reports.

4.3 Adult and Age‑Restricted

• Adult Content and Services.Explicit or suggestive content whether real or AI‑generated, including adult entertainment platforms, NSFW AI chatbots, webcam services, escort services, adult dating, and AI girlfriend/boyfriend applications.
• Age‑Restricted Products.Alcohol, tobacco, vaping products, e‑cigarettes, cannabis/CBD products, prescription medications, and any other products requiring age verification or restricted by law.

4.4 Gambling and Gaming

• Gambling and Games of Chance.Casinos, lotteries, betting platforms, sweepstakes, fantasy sports for cash prizes, chance‑based reward mechanics (loot boxes, mystery boxes, spin‑to‑win), and any form of wagering.
• Gaming and Virtual Goods.In‑game currencies, digital item sales, game boosters, private game servers, cheat codes, hacks, mods, bots, or tools providing unfair gameplay advantages.

4.5 Deceptive and Low‑Value

• Miracle, Misleading, or Unverifiable Claims. Products making exaggerated or unverifiable claims (e.g., “cures cancer,” “reverses aging,” “make money while you sleep,” “guaranteed returns”).
• Get‑Rich‑Quick Schemes.Multi‑level marketing, pyramid schemes, make‑money‑online courses with unrealistic income claims, or any business model where seller revenue primarily depends on recruiting new sellers.
• Fake Engagement and Manipulation Tools. Fake reviews, fake testimonials, social proof inflation platforms, engagement manipulation bots, review farming, and click fraud tools.
• Digital Products with No Genuine Value.AI‑generated filler PDFs, thin templates marked up heavily, placeholder or pre‑launch products with no immediate usable value, or products designed to extract payment rather than solve real problems.
• Piracy and IP Violations. Counterfeit goods, unauthorized resale of software licenses, pirated content, unauthorized media downloads, and any product you do not own or have valid license to sell.

4.6 Services Incompatible with MoR Model

• Physical Goods. Any tangible product requiring physical delivery, including merchandise bundled with digital goods.
• Fully Manual or Bespoke Services.Custom design, development, coaching, freelancing, or consulting services where the majority of value is in human labor rather than a digital system. Productized service packages with pre‑defined deliverables may be considered under the restricted category.
• Marketplaces and Multi‑Vendor Platforms.Platforms that sell on behalf of third‑party sellers, operate multi‑vendor storefronts, or aggregate payments for forwarding to others.
• Donations and Fundraising. Collecting money without delivering a product or service in return, including charity drives, political donations, personal fundraisers, crowdfunding campaigns, and tip jars.
• Ticketing and Event Bookings. Sale, resale, or booking of tickets, reservations, or access to events, travel, accommodations, or experiences.
• Travel Services. Airline bookings, hotel reservations, car rentals, cruise bookings, timeshares, and immigration/visa services.

4.7 Technology and Privacy

• Surveillance and Privacy Violation Tools.Stalkerware, keyloggers, location tracking without consent, facial recognition databases, and deepfake generation tools intended for non‑consensual use (impersonation, fraud, non‑consensual intimate imagery).
• Spam, Scraping, and Mass Outreach Tools. Lead scraping tools, mass email/SMS tools, data harvesting tools, and tools that facilitate unsolicited commercial communications.
• Proxy, Cloaking, and Anti‑Terms Tools. Tools that help users bypass API rate limits, CAPTCHA systems, authentication systems, platform terms of service, or geolocation restrictions.
• IPTV and Unauthorized Streaming.IPTV subscriptions, reseller panels, or tools providing access to third‑party streaming content without authorization.
• Hosting and Infrastructure Services.VPN, VPS, dedicated servers, hosting plans, cloud compute credits, bandwidth reselling, or any product providing persistent infrastructure or server‑level access.
• Telecommunications Services.SIM cards, e‑SIMs, VoIP services, call/SMS termination, telecom routing, or related operations.

4.8 Professional and Regulated Services

• Legal, Accounting, and Medical Services. Any service requiring professional licensing, certification, or regulatory compliance, including legal advice, medical diagnosis or treatment, financial or tax planning, and professional advisory services.
• Government Registration Services. Services facilitating company registration, government filings, licenses, permits, or statutory registrations.
• Health and Wellness Products.Diagnostics, weight‑loss programs, supplements, biohacking kits, and nutraceuticals, regardless of marketing claims.

4.9 Other Prohibited Categories

• Social Matching and Dating Platforms. Random video/chat matching services, dating platforms, matchmaking services, and AI relationship companions.
• Religious or Spiritual Services for Payment.Paid prayers, spiritual guidance for fee, faith‑based counseling, and paid rituals.
• Software License Resale. Reselling software licenses at a discount, reselling AI API access or credits, or redistributing tools without proper authorization.
• Third‑Party Content Downloaders. Tools for downloading content from YouTube, Instagram, Snapchat, TikTok, or other platforms without authorization.

5. Businesses Requiring Enhanced Review

The following categories are not prohibited but require additional review before approval. If your business falls into one of these categories, we may ask for additional documentation, product demos, compliance disclosures, or licensing information. Approval is not guaranteed, and approved accounts may be subject to additional monitoring or conditions.

• AI Content Generation Tools (Text, Image, Video, Voice). Must not enable impersonation, deepfakes, NSFW content generation, or IP infringement. Must have clear acceptable use policies and content moderation.
• Marketing and Outreach Tools.Must not facilitate spam, scraping, fake engagement, or unsolicited mass communications. Must demonstrate compliance with CAN‑SPAM, GDPR, and equivalent regulations.
• E‑Books, Courses, and Written Digital Publications.Must provide genuine educational value. AI‑generated filler content, thin content marked up at premium prices, or misleading claims about outcomes will not be approved.
• Productized Services (Including Developer and Marketing Agencies).Fixed, pre‑defined digital service packages delivered the same way for every buyer. May include limited, repeatable human operational work, as long as it is not customized, consultative, or primarily reliant on human labor. Agencies selling such packages are subject to the same enhanced review.
• Pre‑Orders and Paid Waitlists.Generally not supported due to fulfillment risk. May be approved for high‑trust merchants with a proven track record, subject to payout withholding until verified delivery.
• Resume, Hiring, and Exam Preparation Tools. Must not enable impersonation, cheating, or misrepresentation. Must comply with applicable education and employment regulations.
• Community Access and Membership Platforms. Discord, Slack, or forum access sold as a digital product. Must provide clear value beyond access to a chat room.
• Directories, Boards, and Listing Platforms. Often involve premium placement (advertising) without meeting advertising compliance requirements. Requires closer review of business model and monetization.

6. Sanctioned and Prohibited Jurisdictions

Bags App cannot process payments involving the following jurisdictions, in compliance with OFAC, EU, UN, and other applicable sanctions regimes:

• Cuba
• Iran
• North Korea (DPRK)
• Syria
• Crimea, Donetsk, Luhansk, Kherson, and Zaporizhzhia regions
• Any other jurisdiction subject to comprehensive sanctions under applicable law

Payments from wallet addresses or card issuers associated with sanctioned jurisdictions will be automatically blocked. Additionally, Bags App may restrict payments from jurisdictions where stablecoin acceptance is prohibited or where we have determined the regulatory risk to be unacceptable. Merchant Responsibilities: Merchants must implement geo‑IP blocking to prevent buyers from accessing their product from these jurisdictions. Reliance on blockchain wallet address geolocation alone is insufficient due to VPN and privacy wallet risks. This prohibition applies even if an entity is not listed, if 50% or more of the entity is owned by a sanctioned person or blocked entity. This list is updated regularly to reflect changes in OFAC, EU, FATF, and UN sanctions. All merchants are responsible for ensuring their products are not marketed to or accessible by buyers in sanctioned jurisdictions.

7. Stablecoin Payouts and KYT Requirements

Merchants receiving payouts in stablecoin must use non‑custodial wallets or institutional custody solutions that comply with OFAC sanctions. BAGS reserves the right to delay, reject, or suspend payouts, or to demand the immediate on‑chain return (refund transfer) of payouts sent to wallet addresses flagged by our Know Your Transaction (KYT) vendors for high‑risk activity, including but not limited to:

1. Interaction with sanctioned addresses or entities

2. Use of cryptocurrency mixers (e.g., Tornado Cash)

3. Direct or indirect association with darknet markets or illicit finance

If a payout has already settled on‑chain to a flagged address, BAGS reserves the right to offset the equivalent amount against any of the merchant’s future payouts (in fiat or crypto), withhold subsequent settlements, or suspend the account until the flagged funds are successfully returned to BAGS or cleared by compliance. We may require merchants to provide additional wallet verification information before payouts are enabled.

8. Payment Service Provider Restrictions

Bags App processes payments through third‑party Payment Service Providers, currently including Stripe and/or Adyen. Merchants must also comply with the restricted and prohibited business policies of our Payment Service Providers. If our PSP restricts or prohibits a category, Bags App cannot support that category regardless of whether it appears on our own prohibited list. You can review the current PSP restricted business policies at: Stripe: https://stripe.com/legal/restricted‑businesses Adyen: https://www.adyen.com/legal/list‑restricted‑prohibited If there is a conflict between this policy and a PSP policy, the more restrictive policy applies.

9. Intellectual Property and Third‑Party API Warranty

Merchant warrants that their use of third‑party APIs (including but not limited to AI model providers) complies with the terms of service of those providers. Merchant shall indemnify, defend, and hold harmless Bags App against any claims, damages, or expenses arising from merchant’s violation of third‑party API terms or any alleged infringement of intellectual property rights.

10. Enforcement

We take violations of this policy seriously. If we determine that a merchant has onboarded in breach of this policy or our terms, including by misrepresenting their business, attempting to bypass restrictions, or engaging in prohibited activities, Bags App may take any or all of the following actions:

• Immediate suspension of the merchant account and all transaction processing.
• Withholding of payouts or reversal of settled funds.
• Refund of all transactions processed in breach of this policy.
• Permanent account termination without possibility of reinstatement.
• Reporting to card networks, Payment Service Providers, financial partners, law enforcement, or regulatory authorities as required.
• Merchant shall be liable for all costs, fees, and fines levied against Bags App by Payment Service Providers, card networks, or regulatory authorities arising directly from Merchant’s violation of this Policy. Bags App reserves the right to setoff such amounts against any payouts otherwise due to Merchant.

These measures may be taken without prior notice in cases of material breach, fraud, or imminent risk to the platform or its partners.

10.1 Examples of Policy Breach

The following may trigger investigation or enforcement:

• Misclassifying your business or products to bypass category restrictions.
• Using proxy merchants, sub‑accounts, or account takeovers to avoid enforcement.
• Selling or promoting products that are deceptive, harmful, or violate prohibited content rules.
• Failing to disclose essential onboarding information (website mismatch, incorrect entity type, undisclosed beneficial owners).
• Suspicious or unusual volume of transactions or sudden changes in transaction patterns.
• High volume of refunds, disputes, chargebacks, or customer complaints (including exceeding the 0.9% chargeback or 3% refund thresholds).
• Directing buyers to send stablecoin payments from high‑risk, sanctioned, or flagged wallet addresses.
• Violation of ROSCA requirements for subscription products (missing disclosures, no cancellation mechanism, pre‑checked consent).
• Actions or transactions flagged by our KYT screening, payment partners, or regulatory authorities.
• Any other material breach of our policies, MSA, or applicable law.

11. Appeals and Resolution

If you believe enforcement action was applied in error, you may submit a request for review by contacting compliance@getbags.app. Please note:

• Reviews are considered on a one‑time basis. The appeal review decision is final.
• In some cases, we may allow corrective action or resubmission for review.
• Voluntary disclosure of potential compliance issues may be considered favorably.
• Bags App is under no obligation to disclose the specific reasons for rejection or suspension beyond what is required by applicable law.

12. When In Doubt

If your product is pushing boundaries or you are unsure whether it qualifies, we strongly encourage you to reach out to us before applying. We would rather have a conversation up front than deal with a compliance issue later. Just because something is digital does not mean it is automatically accepted. If a product feels designed to extract payment rather than solve a real problem, or if it would be difficult to explain to a regulator, a card network, or a compliance auditor, we likely cannot support it.

Contact: compliance@getbags.app Website: https://getbags.app