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

Accepting Online Payments in Iowa

To accept payments online in Iowa, you must comply with the state’s payment processing laws. The relevant laws are found in Iowa Code Chapter 527.5, which outlines the requirements for satellite terminals, and Iowa Code Chapter 554F.6, which outlines the disclosure requirements for online marketplaces.

Requirements for Online Marketplaces

If you are an online marketplace with high-volume third-party sellers, you must require those sellers to provide certain information and disclose that information to consumers in a clear and conspicuous manner [1.1]. The information that must be disclosed includes:

  • The full name of the seller
  • The physical address of the seller
  • Contact information for the seller, including a current working phone number, a current working email address, or other means of direct electronic messaging
  • Information about any other seller that supplied the consumer product to the purchaser, if the seller is different than the high-volume third-party seller listed on the product listing prior to purchase

Additionally, you must disclose a reporting mechanism that allows for electronic and telephonic reporting of suspicious marketplace activity to the online marketplace [1.1].

If a high-volume third-party seller does not comply with the requirements to provide and disclose information, the online marketplace must suspend any future sales activity of the seller until the seller complies with the requirements [1.1].

If the attorney general has reasonable belief that an online marketplace is in violation of the disclosure requirements, the attorney general has the sole authority to bring civil action to enforce compliance with the law, assess civil penalties in an amount not more than one hundred thousand dollars, and obtain other remedies permitted under law [1.2].

Requirements for Satellite Terminals

If you are a financial institution using a satellite terminal to accept payments, you must comply with the requirements outlined in Iowa Code Chapter 527.5 [2.1]. Some of the key requirements include:

  • A satellite terminal may be established by one or more financial institutions, but a single controlling financial institution must maintain the location, use, and operation of the satellite terminal in compliance with the law.
  • A satellite terminal must be available for use on a nondiscriminatory basis by any other financial institution which has its principal place of business within Iowa, and by all customers who have been designated by a financial institution using the satellite terminal and who have been provided with an access device approved by the administrator.
  • An informational statement must be filed and maintained on a current basis with the administrator by the financial institution controlling a satellite terminal in Iowa, which sets forth certain information, including the name and business address of the controlling financial institution, the location of the satellite terminal, and a schedule of the charges which will be required to be paid by a financial institution utilizing the satellite terminal.
  • A satellite terminal in Iowa shall not be attended or operated at any time by an employee of a financial institution or an affiliate of a financial institution, except for certain limited purposes.
  • The charges required to be paid by any financial institution which utilizes the satellite terminal for transactions involving an access device shall not exceed a pro rata portion of the costs, determined in accordance with generally accepted accounting principles, of establishing, operating and maintaining the satellite terminal, plus a reasonable return on these costs to the owner of the satellite terminal.

If you are using a personal terminal to accept payments, you must comply with the requirements outlined in subsection 8 of Iowa Code Chapter 527.5 [2.1].

Automated Transactions

In an automated transaction, a contract may be formed by the interaction of electronic agents of the parties, even if no individual was aware of or reviewed the electronic agents’ actions or the resulting terms and agreements. A contract may also be formed by the interaction of an electronic agent and an individual, acting on the individual’s own behalf or for another person, including by an interaction in which the individual performs actions that the individual is free to refuse to perform and which the individual knows or has reason to know will cause the electronic agent to complete the transaction or performance. The terms of the contract are determined by the substantive law applicable to it [3.1].

Conclusion

To accept payments online in Iowa, you must comply with the relevant payment processing laws. If you are an online marketplace with high-volume third-party sellers, you must require those sellers to provide certain information and disclose that information to consumers in a clear and conspicuous manner. If you are a financial institution using a satellite terminal to accept payments, you must comply with the requirements outlined in Iowa Code Chapter 527.5. In an automated transaction, a contract may be formed by the interaction of electronic agents of the parties or by the interaction of an electronic agent and an individual.

Source(s):
Jurisdiction

Iowa