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

To accept payments online in Illinois, you must comply with the payment processing laws in the state. The relevant laws are 50 ILCS 345/25 and 30 ILCS 540/8.

Requirements for Accepting Payments Online in Illinois

50 ILCS 345/25

According to 50 ILCS 345/25, the governing body of a local governmental entity authorizing acceptance of payment by credit card may impose a convenience fee or surcharge upon a cardholder making payment by credit card in an amount to wholly or partially offset, but in no event exceed, the amount of any discount or processing fee incurred by the local governmental entity. This convenience fee or surcharge may be applied only when allowed under the operating rules and regulations of the credit card involved. When a cardholder elects to make a payment by credit card to a local governmental entity and a convenience fee or surcharge is imposed, the payment of the convenience fee or surcharge shall be deemed voluntary by the person and shall not be refundable.

No fee, or accumulation of fees, that exceeds the lesser of $20 or 5% of the principal amount charged may be imposed in connection with the issuance of any license, sticker, or permit, or with respect to any other similar transaction. No fee, or accumulation of fees, that exceeds the lesser of $5 or 5% of the transaction involved may be imposed in connection with the payment of any fine. No fee, or accumulation of fees, in excess of the lesser of $40 or 3% of the principal amount charged may be imposed in connection with the payment of any real estate or other tax.

Notwithstanding the provisions of subsection (b), a minimum fee of $1 may be imposed with respect to any transaction. Notwithstanding the provisions of subsection (b), a fee in excess of the limits in subsection (b) may be imposed by a local governmental entity on a transaction if (i) the fee imposed by the local governmental entity is no greater than a fee charged by the financial institution or service provider accepting and processing credit card payments on behalf of the local governmental entity; (ii) the financial institution or service provider accepting and processing the credit card payments was selected by competitive bid and, when applicable, in accordance with the provisions of the Illinois Procurement Code; and (iii) the local governmental entity fully discloses the amount of the fee to the cardholder.

30 ILCS 540/8

According to 30 ILCS 540/8, vendors may participate in the Vendor Payment Program if they meet certain criteria. The vendor must be owed an account receivable by the State for which prompt payment penalties have commenced accruing, the vendor’s account receivable is eligible to accrue prompt payment penalty interest under this Act, the vendor’s account receivable is not for payments under a medical assistance program, and the vendor’s account receivable is not prohibited by, or otherwise prevented by, applicable law from being transferred or assigned under this Section.

Qualified purchasers may purchase from participating vendors certain qualified accounts receivable owed by the State to the participating vendors. In consideration of the payment of the purchase price, a participating vendor shall assign to the qualified purchaser all of its rights to payment of the qualified account receivable, including all current and future prompt payment penalties due to that qualified account receivable in accordance with this Act.

30 ILCS 540/3-2

Additionally, according to 30 ILCS 540/3-2, if a State official or agency is late in payment of a vendor’s bill or invoice for goods or services furnished to the State, the State official or agency shall pay interest to the vendor. The interest penalty is 1.0% of any amount approved and unpaid for each month or fraction thereof after the end of the 60-day period, until final payment is made.

Conclusion

To accept payments online in Illinois, you must comply with the payment processing laws in the state. The relevant laws are 50 ILCS 345/25 and 30 ILCS 540/8. If you are a local governmental entity, you may impose a convenience fee or surcharge upon a cardholder making payment by credit card in an amount to wholly or partially offset, but in no event exceed, the amount of any discount or processing fee incurred by the local governmental entity. If you are a vendor, you may participate in the Vendor Payment Program if you meet certain criteria. Additionally, if a State official or agency is late in payment of a vendor’s bill or invoice for goods or services furnished to the State, the State official or agency shall pay interest to the vendor.

Jurisdiction

Illinois

• General