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Can I accept payments online without violating payment processing laws in Tennessee? What are the requirements?

Accepting Online Payments in Tennessee

If you are planning to accept payments online in Tennessee, you must comply with the state’s payment processing laws. Here are some requirements you need to consider:

  1. Register with the Tennessee Department of Financial Institutions: If you are a payment processor or a money transmitter, you must register with the Tennessee Department of Financial Institutions [1.1][4.1].
  2. Obtain a Money Transmitter License: If you are a money transmitter, you must obtain a license from the Tennessee Department of Financial Institutions [1.1][4.1].
  3. Comply with Anti-Money Laundering (AML) Regulations: You must comply with the state and federal AML regulations, including the Bank Secrecy Act (BSA) and the USA PATRIOT Act [1.1].
  4. Protect Customer Data: You must protect your customers’ personal and financial information by complying with the Payment Card Industry Data Security Standard (PCI DSS) [1.1].
  5. Disclose Fees and Terms: You must disclose all fees and terms associated with your payment processing services to your customers [1.1].
  6. Comply with Consumer Protection Laws: You must comply with the state and federal consumer protection laws, including the Truth in Lending Act (TILA) and the Electronic Fund Transfer Act (EFTA) [1.1].
  7. Include required information in contracts: If you contract with a merchant to lease a device that enables credit card, debit card, or other payment card processing, you must ensure that the written contract between the payment processor and merchant clearly and conspicuously includes the required information [2.1][2.3]. If you contract directly with a merchant to provide payment services, you must provide the merchant with certain information and disclose certain information in any agreement with the merchant [2.2].
  8. Obtain Legal Advice: It is recommended that you obtain legal advice to ensure that you are complying with all applicable laws and regulations [1.1].

Conclusion

To accept payments online in Tennessee, you must comply with the state’s payment processing laws, including registering with the Tennessee Department of Financial Institutions, obtaining a money transmitter license, complying with AML regulations, protecting customer data, disclosing fees and terms, complying with consumer protection laws, including required information in contracts, and obtaining legal advice.

Source(s):
Jurisdiction

Tennessee