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

Yes, you can use third-party payment processors on your website in Kansas, but you may need to obtain a license from the state bank commissioner unless you qualify for an exemption.

Requirements for Third-Party Payment Processors in Kansas

According to KSST 9-509(a), no person shall engage in the business of money transmission with a resident of Kansas unless such person files a complete application and obtains a license from the commissioner. This includes acting as an agent for another in the transmission of money as a service or for a fee or other consideration.

To obtain a license, you must submit a complete application in the form and manner prescribed by the commissioner. The application must be accompanied by nonrefundable fees established by the commissioner for the license. The commissioner may also require fingerprinting of any individual, officer, director, partner, member, shareholder, or any other person related to the application deemed necessary by the commissioner. Additionally, each person submitting an application must meet certain requirements, including a tangible net worth of not less than $250,000, depositing and keeping on deposit with a bank in Kansas approved by the commissioner, cash or securities satisfactory to the commissioner in an amount not less than $200,000, and submitting a list of the names and addresses of other persons who are authorized to act as agents for transactions with Kansas residents.

Exemptions

However, there are exemptions to the licensing requirement. According to KSST 9-510, the following persons are exempt from the licensing requirement:

• Banks, bank holding companies, trust companies, savings and loan associations, savings banks, credit unions, and other financial institutions chartered under the laws of Kansas or the United States.
• The United States or any department, agency, or instrumentality thereof.
• Any state, or any department, agency, or instrumentality thereof.
• Any person who engages in the business of money transmission on such person’s own behalf and not for the account of others.
• Any person who is an agent of a licensee, provided that the licensee is licensed under this act and the agent is acting within the scope of the agency.
• Any person who is an agent of a licensee, provided that the licensee is licensed under the laws of another state or the United States and the agent is acting within the scope of the agency.
• Any person who is an agent of a licensee, provided that the licensee is exempt from licensure under the laws of the state or country in which the licensee is located and the agent is acting within the scope of the agency.

Additional Information

KSST 75-6404 states that nothing in the Kansas prompt payment act shall be construed to prohibit full or partial payments by government agencies for goods or services whether or not such goods or services have been completely received or finally accepted by the government agencies.

If you are unsure whether you need a license or qualify for an exemption, you should consult with a legal professional.

Jurisdiction

Kansas

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