Can I use third-party payment processors on my website in Hawaii? What are the requirements?

Using Third-Party Payment Processors on a Website in Hawaii

Yes, you can use third-party payment processors on your website in Hawaii. However, there are certain requirements that you need to consider.

According to HIRS 490:4A-202, 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. Commercial reasonableness of a security procedure is a question of law to be determined by considering the wishes of the customer expressed to the bank, the circumstances of the customer known to the bank, including the size, type, and frequency of payment orders normally issued by the customer to the bank, alternative security procedures offered to the customer, and security procedures in general use by customers and receiving banks similarly situated.

Therefore, if you plan to use third-party payment processors, you need to ensure that the security procedures used by the processor are commercially reasonable and provide adequate security against unauthorized payment orders.

Additionally, HIRS 412:13-215 states that no foreign bank shall establish or maintain a Hawaii representative office unless the foreign bank is licensed by the commissioner to maintain a Hawaii representative office. However, this does not apply to foreign banks that maintain a federal agency or federal branch in Hawaii.

HIRS 412:13-219 requires that each foreign bank that is licensed to establish and maintain a Hawaii state branch, Hawaii state agency, or Hawaii representative office shall post its license in a conspicuous place at the office.

In summary, you can use third-party payment processors on your website in Hawaii as long as the security procedures used by the processor are commercially reasonable and provide adequate security against unauthorized payment orders. Additionally, if you are a foreign bank, you need to be licensed by the commissioner to maintain a Hawaii representative office, unless you maintain a federal agency or federal branch in Hawaii. You must also post your license in a conspicuous place at the office.

[HIRS 412:13-215][HIRS 412:13-219][HIRS 490:4A-202]

Jurisdiction

Hawaii

• Privacy