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

Accepting Online Payments in Ohio

To accept payments online in Ohio, you must comply with the payment processing laws in the state. The Ohio Revised Code (ORC) contains several sections that regulate payment orders and funds transfers, including UCC 4A-202, UCC 4A-203, UCC 4A-206, UCC 4A-209, UCC 4A-210, UCC 4A-212, and OHRC Section 1315.02 [1.1][1.2][1.3][2.1][1.4]. Additionally, Ohio has regulations that specifically apply to check-cashing businesses [2.2][2.3][2.4][2.5].

To ensure compliance with Ohio payment processing laws, you should consider the following requirements:

  1. Licensing: No person, regardless of the location of that person, its facilities, or its agents, shall receive, directly or indirectly and by any means, money or its equivalent for transmission from a person located in Ohio, unless that person receiving the money or its equivalent for transmission is a licensee, an authorized delegate of a licensee that is not itself required to be licensed under division (B) of OHRC Section 1315.02, or is one of the entities listed in OHRC Section 1315.02(A) [2.1].
  2. Security Procedures: If you and your bank have agreed to use a security procedure to verify the authenticity of payment orders issued in your name, the payment order received by the bank is effective as your order, whether or not authorized, if the security procedure is commercially reasonable and the bank accepted the payment order in good faith and in compliance with the security procedure [1.1].
  3. Commercial Reasonableness: The commercial reasonableness of a security procedure is determined by considering the wishes of the customer, the circumstances of the customer known to the bank, alternative security procedures offered to the customer, and security procedures in general use by customers and receiving banks similarly situated [1.1].
  4. Fees and Charges: If you operate a check-cashing business, you cannot charge check-cashing fees or other check-cashing charges in an amount that exceeds three percent of the face amount of the check for cashing checks issued by the state, a state agency, a political subdivision of the state, or the United States. You must also conspicuously post and display a schedule of your fees and charges for all services permitted under Ohio law [2.3].
  5. Prohibited Acts: You cannot knowingly make any incorrect statement of a material fact or omit to state a material fact in any application made, investigation conducted, or hearing held pursuant to Ohio check-cashing regulations. You also cannot obstruct or refuse to permit any lawful investigation by the superintendent of financial institutions, a person acting on behalf of an agency of the state or a political subdivision, or a law enforcement officer. Finally, you cannot violate or participate in the violation of Ohio check-cashing regulations or the rules adopted thereunder [2.4].
  6. Consumer Agreements: If you are involved in a transaction primarily for personal, family, or household purposes, a provision of a nonelectronic contract involving you and to which a state agency or a county office is not a party that authorizes the conducting of a transaction or any part of a transaction by electronic means is unenforceable against you, unless you separately sign the provision [4.1].

In summary, to accept payments online in Ohio, you must comply with the state’s payment processing laws, including those related to licensing, security procedures, commercial reasonableness, fees and charges, prohibited acts, and consumer agreements.

Source(s):
Jurisdiction

Ohio