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Customer is required to indemnify Marqeta, the Issuer, and the KYC Service Provider against claims, costs, and damages arising from Customer's breach, its customers' conduct, Retail Partners' legal violations, Card Brand fines imposed on or through the Issuer, and the general operation of Customer's business under the agreement. This indemnification obligation extends to third-party claims arising from conduct by parties downstream of Customer, including cardholders and retail partners.
This analysis describes what Marqeta's agreement states, permits, or reserves. It does not constitute a legal determination about enforceability. Regulatory applicability and practical outcomes may vary by jurisdiction, enforcement context, and individual circumstances. Read our methodology
This provision requires Customer to absorb financial and legal exposure arising not only from its own conduct but also from the acts or omissions of its customers, Retail Partners, and Lending Bank in connection with the agreement. The inclusion of Card Brand fines and Issuer-imposed penalties within the indemnification scope means Customer's liability exposure may be determined by regulatory or network actions outside Customer's direct control.
Under this clause, Customer is contractually obligated to defend and indemnify Marqeta and the Issuer against damages arising from Customer's end-users' conduct, regulatory violations by downstream partners, and Card Brand-imposed penalties. The agreement requires Customer to bear these costs regardless of whether the triggering conduct was directly attributable to Customer's own operational decisions.
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"Customer will indemnify, defend, and hold harmless Marqeta, Issuer, and, when applicable, the KYC Service Provider (as defined in Section F (KYC Services)) and each of their respective officers, directors, employees, and agents, from and against all Damages as a result of any Claim arising out of, relating to, or alleging: (i) Customer's material breach of the Agreement, (ii) the gross negligence, willful misconduct, or fraud of Customer or any of Customer's personnel or Customer's customers or, when applicable, Retail Partners (as defined in Section D (Managed by Marqeta)), in connection with the Agreement, (iii) the violation of any Applicable Law or Card Brand Rules by any Customer's customers or, when applicable, Retail Partner in connection with the Agreement, (iv) Customer's infringement of the intellectual property rights of any third party in connection with the Agreement, (v) any fines, fees, penalties, assessments, or other amounts imposed by, or on, Issuer, or imposed by any Card Brand in connection with the Agreement, (vi) the business or services of Customer relating to the Agreement, or, when applicable, any of Customer's customers, Retail Partner, or Lending Bank (as defined in Section D (Managed by Marqeta)) relating to the Agreement.Excerpt from Marqeta's Terms of Use
1. REGULATORY LANDSCAPE: This provision implicates the FTC Act to the extent indemnification obligations relate to unfair or deceptive acts by Customer or its downstream partners. Card Brand Rules (Visa, Mastercard, Discover) are incorporated by reference as a basis for triggering indemnification through fines and assessments. State consumer protection statutes enforced by State Attorneys General may also create liability exposure that flows through this clause. The CFPB holds supervisory authority over card program participants and enforcement actions against Issuers could generate indemnified costs under this provision. 2. GOVERNANCE EXPOSURE: High. The indemnification scope extends to Customer's customers' conduct and Retail Partners' legal violations, meaning Customer contractually absorbs third-party regulatory risk. This is operationally significant for customers operating large-scale consumer card programs or marketplace models where downstream participant conduct is difficult to monitor in real time. The inclusion of Issuer-level fines as indemnifiable items means Card Brand enforcement against the Issuer for program-level compliance failures could generate Customer liability. 3. JURISDICTION FLAGS: California law governs, with exclusive venue in Alameda County. However, indemnification for violations of applicable law by Customer's customers may create exposure in any jurisdiction where those customers operate, particularly the EU, UK, or states with enhanced consumer protection frameworks. Illinois, New York, and California create heightened exposure for financial services consumer protection claims that could flow through this indemnification structure. 4. CONTRACT AND VENDOR IMPLICATIONS: Procurement and vendor management teams should assess whether Customer's agreements with Retail Partners and downstream program participants include reciprocal indemnification provisions that offset the exposure created by this clause. The indemnification of the KYC Service Provider, which is explicitly not a party to the agreement per Section F(8), creates an unusual contractual structure in which Customer bears liability toward a non-party beneficiary. This structure may face scrutiny in jurisdictions that limit third-party beneficiary enforceability. 5. COMPLIANCE CONSIDERATIONS: Legal teams should map this indemnification scope against Customer's existing vendor contracts, cardholder agreements, and Retail Partner agreements to identify gaps where downstream conduct is not adequately managed. Compliance programs should include monitoring of Card Brand rule adherence by downstream participants. Insurance coverage, particularly for third-party liability and regulatory fines, should be reviewed for alignment with the indemnification obligations established here.
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This provision requires Customer to absorb financial and legal exposure arising not only from its own conduct but also from the acts or omissions of its customers, Retail Partners, and Lending Bank in connection with the agreement. The inclusion of Card Brand fines and Issuer-imposed penalties within the indemnification scope means Customer's liability exposure may be determined by regulatory or …
Under this clause, Customer is contractually obligated to defend and indemnify Marqeta and the Issuer against damages arising from Customer's end-users' conduct, regulatory violations by downstream partners, and Card Brand-imposed penalties. The agreement requires Customer to bear these costs regardless of whether the triggering conduct was directly attributable to Customer's own operational decisions.
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