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

Requirements for Accepting Payments Online in California

To accept payments online in California, you must comply with the state’s payment processing laws. The requirements for accepting payments online in California are outlined in the California Civil Code, the California Financial Code, and the California Code of Regulations.

Online Marketplaces

If you are a high-volume third-party seller on an online marketplace, you must provide certain identifying information to the online marketplace and to consumers in a clear and conspicuous manner [1.1](.1)[1.3](.2). The information you must provide includes your full name, physical address, and contact information, such as a telephone number or email address. If you do not have a physical address other than a residential physical address, or a combined business and residential physical address, you may provide only the country and state, if applicable, in which you reside [1.3](.2).

Online marketplaces must also provide a reporting mechanism that allows for electronic and telephonic reporting of suspicious activity by high-volume third-party sellers [1.3](.2).

Money Transmitters

If you are a money transmitter in California, you must obtain a license from the California Department of Financial Protection and Innovation (DFPI) and maintain a certain amount of cash or securities on deposit with the Treasurer to secure the faithful performance of your obligations with respect to money transmission in California [2.2]([3.2]:)[2.3].

Payment Instruments

If you sell or issue payment instruments in California, you must file a certified copy of the payment instrument with the commissioner and clearly identify yourself as the issuer [2.1]([3.1]:).

Payment Orders

If you accept payment orders, you must execute them in accordance with the sender’s instructions and follow certain obligations in executing the order [3.1][3.2][3.3].

Conclusion

To accept payments online in California, you must comply with the state’s payment processing laws, which include providing certain identifying information if you are a high-volume third-party seller on an online marketplace, obtaining a license and maintaining a certain amount of cash or securities on deposit if you are a money transmitter, filing a certified copy of the payment instrument if you sell or issue payment instruments, and executing payment orders in accordance with the sender’s instructions.

If you have any further questions or concerns, it is recommended that you consult with a legal professional.

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Source(s):
Jurisdiction

California