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

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

Requirements for Accepting Online Payments in Arizona

  1. Obtain a Money Transmitter License: If you are a business that accepts payments on behalf of others, you may need to obtain a money transmitter license from the Arizona Department of Financial Institutions [1.1].
  2. Comply with Anti-Money Laundering (AML) Regulations: You must comply with AML regulations, which include verifying the identity of your customers and reporting suspicious transactions [1.1].
  3. Disclose Fees: You must disclose all fees associated with your payment processing services, including any fees for chargebacks, refunds, or cancellations [3.1].
  4. Protect Customer Data: You must protect your customers’ personal and financial information by implementing appropriate security measures [1.1].
  5. Comply with Consumer Protection Laws: You must comply with Arizona’s consumer protection laws, which prohibit unfair and deceptive practices [1.1].
  6. Disclose Required Payment Method: If you are a vendor providing goods or services to a governmental entity, you must disclose the required method of payment during the bid process or amend the contract under mutual agreement with the vendor [2.1].
  7. Refund Unauthorized Payment Orders: If a receiving bank accepts a payment order issued in the name of its customer as sender which is not authorized and not effective as the order of the customer, the bank shall refund any payment of the payment order received from the customer to the extent the bank is not entitled to enforce payment [1.7].
  8. Verify Payment Orders: A payment order received by the receiving bank is the authorized order of the person identified as sender if that person authorized the order or is otherwise bound by it under the law of agency. If a bank and its customer have agreed that the authenticity of payment orders issued to the bank in the name of the customer as sender will be verified pursuant to a security procedure, a payment order received by the receiving bank is effective as the order of the customer, whether or not authorized, if the security procedure is a commercially reasonable method of providing security against unauthorized payment orders and the bank proves that it accepted the payment order in good faith and in compliance with the security procedure and any written agreement or instruction of the customer restricting acceptance of payment orders issued in the name of the customer [1.2].
  9. Acceptance of Payment Orders: A receiving bank other than the beneficiary’s bank accepts a payment order when it executes the order. A beneficiary’s bank accepts a payment order at the earliest of the following times: when the bank pays the beneficiary, notifies the beneficiary of receipt of the order or that the account of the beneficiary has been credited with respect to the order, or receives payment of the entire amount of the sender’s order. Acceptance of a payment order cannot occur before the order is received by the receiving bank [1.4].
  10. Cancellation and Amendment of Payment Orders: A communication of the sender of a payment order cancelling or amending the order may be transmitted to the receiving bank orally, electronically or in writing. If a security procedure is in effect between the sender and the receiving bank, the communication is not effective to cancel or amend the order unless the communication is verified pursuant to the security procedure or the bank agrees to the cancellation or amendment. After a payment order has been accepted, cancellation or amendment of the order is not effective unless the receiving bank agrees or a funds-transfer system rule allows cancellation or amendment without agreement of the bank [1.6].
  11. Liability and Duty of Receiving Bank Regarding Unaccepted Payment Order: If a receiving bank fails to accept a payment order that it is obliged by express agreement to accept, the bank is liable for breach of the agreement to the extent provided in the agreement or in this chapter, but does not otherwise have any duty to accept a payment order or, before acceptance, to take any action, or refrain from taking action, with respect to the order except as provided in this chapter or by express agreement [1.8].

Failure to comply with these requirements may result in penalties and legal action. Therefore, it is important to consult with a legal professional to ensure that you are in compliance with all applicable laws and regulations.

Source(s):
Jurisdiction

Arizona