A breach of contract dispute between rival credit card
processing firms who provided services to taxi operators in Chicago and
elsewhere has pulled into federal court.
Vouchera, an Illinois firm whose principals are based in
Arizona, filed the five-count complaint Dec. 19 in Chicago against Frontier
Payments, of New York, and Vantiv Inc., of Ohio. Vouchera provides what it
calls a “kiosk solution” to retail clients unable or unwilling to accept credit
card payments. Customers use the kiosk to make a credit card purchase of a
voucher, which they then redeem for merchandise or services.
According to Vouchera’s lawsuit, Frontier was buying credit
card processing services from Vantiv and reselling them, with value added, to
taxi operators and drivers. In 2015, with Frontier feeling the pinch of Uber
expansion affecting taxi business, it sought to diversify and, on May 12, signed
a three-year agreement establishing Voucehra as a submerchant of Frontier, so
when retailers’ customers used the Vouchera kiosk software, Frontier and Vantiv
processed the payment. On all approved transactions, Vantiv took the proceeds
and transferred them to Frontier.
The contract stipulated Frontier would transfer the proceeds
to Vouchera within one business day, but it was allowed to retain a pre-set
percentage before initiating. On the 15th of every month, Frontier
had to transfer a portion of the revenue sharing pool to Vouchera, the lawsuit
Shortly after signing the agreement, Frontier hired a
software developer specifically to develop a competing kiosk product, Vouchera
alleged. Frontier and Vouchera worked together until October 2016, at which point
“the average daily volume of the kiosk voucher purchase transactions was
On Oct. 17, however, Frontier notified Vouchera it was
undergoing an investigation by Vantiv, which had frozen and retained all card
transaction proceeds, roughly $1.373 million, of which Vouchera’s share was
$291,000. Vouchera said the contract terms allowed Frontier, in such a
situation, to work with another processor, but it did not do so. Rather, it
demanded contact information for all of Vouchera’s customers.
Having learned of the competing kiosk software, Vouchera said
it opted not to comply with Frontier’s request. On Oct. 19, Frontier terminated
processing services. Vouchera notified customers who were waiting to be paid,
but said Frontier was simultaneously telling Vouchera customers that Vouchera
was responsible for the delay, and that Frontier would pay them directly. Further,
Vouchera’s lawsuit accused Frontier of telling some customers Vouchera had committed
fraud by not disclosing its contracts with marijuana dispensaries. Frontier purportedly
began advertising its kiosk software on Oct. 31.
In addition to the unpaid proceeds and revenue sharing
disbursement, Vouchera’s breach of contract claim against Frontier — linked
to Frontier’s alleged failure to pay proceeds as scheduled, as well as the
missed revenue share payments due Oct. 15 and Nov. 15 — said its damages from
early termination amount to $572,000. As an alternative, it accused Frontier of
unjust enrichment, saying Frontier’s “retention of the funds violates the
fundamental principles of justice, equity, and good conscience.” The other
three counts include tortious interference with business relationship — saying
Frontier’s conduct cause Vouchera to lose many clients — as well as defamation
on the part of Frontier and unjust enrichment on the part of Vantiv.
Representing Vouchera in the matter are attorneys from Elan
Law Group, of Chicago.