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

Using Third-Party Payment Processors in Massachusetts

If you are planning to use third-party payment processors on your website in Massachusetts, you must comply with the relevant regulations. The specific requirements may vary depending on the type of payment processor and the nature of your business.

Non-Resident Outsourcing Facility Registration Requirements

If you are a non-resident outsourcing facility that provides payment processing services, you must register with the Commonwealth of Massachusetts Board of Registration in Pharmacy [1.1](#[1.1]). The registration requirements include submitting a complete application form, proof of a valid, current registration with the FDA, and proof of an inspection by the FDA within the two years immediately preceding the application [1.1](#[1.1]).

Transaction Receipts for Check Cashers

If you are a licensed check casher that uses a third-party payment processor, you must provide each person cashing a check, draft, or money order with a receipt of each transaction that includes the name, license type, and number of the licensee, the amount of each check, draft, or money order to be cashed, the fee charged for each transaction, and the total amount received by the customer for each check, draft, or money order cashed [2.1](#[2.1]).

Fee Disclosure Requirements for Foreign Transmittal Agencies

If you are a licensed foreign transmittal agency that uses a third-party payment processor, you must comply with the pre-payment disclosure requirements set forth in 12 CFR 1005.31 [2.2](#[2.2]).

Requirements for Overdraft Services

If you offer overdraft services through a third-party payment processor, you must comply with 12 CFR 1005.17 [3.1](#[3.1]).

Requirements for Financial Institutions Offering Payroll Card Accounts

If you offer payroll card accounts through a third-party payment processor, you must comply with 12 CFR 1005.18 and limit the maximum liability of a consumer to $50 [3.2](#[3.2]).

Minimum Security Requirements

If you provide automated teller machines in Massachusetts through a third-party payment processor, you must take actions to ensure that such ATMs are operated in compliance with all applicable laws and regulations for the safety and security of its employees and consumers effecting electronic funds transfers at its electronic branches [3.3](#[3.3]).

Additional Application Procedures for Check Casher Mobile Units

If you operate a licensed check casher business from a mobile unit that uses a third-party payment processor, you must provide additional information, including the Massachusetts motor vehicle registration number or other satisfactory identification of the mobile unit, a description of the area in which the applicant seeks to utilize the mobile unit, and information demonstrating the adequacy of the vehicle for the transaction of cashing a check, draft, or money order, including, but not limited to, provisions relative to security [2.3](#[2.3]).

Conclusion

To summarize, if you plan to use third-party payment processors on your website in Massachusetts, you must comply with the relevant regulations, including registration requirements, transaction receipt requirements, fee disclosure requirements, security requirements, and application procedures. If you have any further questions or concerns, you may want to consult with a legal professional.

Source(s):
Jurisdiction

Massachusetts