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

To accept payments online in Washington, you must comply with certain requirements to avoid violating payment processing laws. Here are the key requirements:

Requirements for Accepting Payments Online in Washington

  1. Obtain a Money Transmitter License: If you are accepting payments on behalf of others, you may need to obtain a money transmitter license from the Washington State Department of Financial Institutions [1.3].
  2. Maintain a Surety Bond: If you are a money transmitter or an online currency exchanger, you must maintain a surety bond in an amount based on the previous year’s dollar volume. The minimum surety bond must be at least ten thousand dollars, and not to exceed five hundred fifty thousand dollars [1.1][1.3].
  3. Disclose Fees and Charges: If you are a third-party account administrator, you must disclose in precise terms the rate and amount of all charges and fees. The disclosures required must be on the front page of the contract and must be in at least twelve-point type [1.2].
  4. Hold Funds in an Insured Financial Institution: If you are a third-party account administrator, you must hold a debtor’s funds in an account at an insured financial institution. A debtor owns the funds held in the account and must be paid accrued interest on the account, if any [1.2].
  5. Director’s Approval Required: If you are an out-of-state bank that does not have a branch in Washington, you must provide written application of the proposed transaction to the director, accompanied by the fee prescribed by the director, not later than three days after the date of filing with the responsible federal bank supervisory agency for approval to establish or acquire the branch [4.1].

In addition to these requirements, you should also be aware of the following:

  • If you are transmitting payment orders, you must comply with the rules set forth in RCW 62A.4A, which governs funds transfers [2.1][2.2][2.3][2.4].
  • If you issue payment cards, you must comply with the requirements set forth in RCW 19.395.010, which requires financial institutions to list a phone number on their website for cardholders and merchants to report suspected incidents of fraud or theft [5.1].

Please note that this is not an exhaustive list of all the requirements that may apply to your specific situation. You should consult with a legal professional to ensure that you are in compliance with all applicable laws and regulations.

I hope this helps!

Source(s):
Jurisdiction

Washington