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

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Third-Party Payment Processors in Tennessee

In Tennessee, there are no specific laws that prohibit the use of third-party payment processors on websites. However, payment processors must comply with certain requirements under Tennessee law.

Information Required by Payment Acquirer

Payment acquirers that contract directly with a merchant to provide payment services must provide the merchant with information indicating where the merchant may obtain access to the operating rules, regulations, and bylaws applicable under the agreement with the merchant. They must also disclose the effective date of the agreement, the term of the agreement, the provisions for early termination or cancellation of the agreement, if any, and a complete schedule of all payment services fees applicable to the credit card, debit card, or other payment card services under the agreement. Additionally, payment acquirers must promptly supply the merchant with a statement, which may be electronic, that includes an itemized list of all payment services fees assessed since the previous statement, the total value of the transactions processed by the payment acquirer for the merchant during the statement period, and an indication of the aggregate fee percentage [3.1].

Liability for Unauthorized Use of Credit Card

Any person who has assumed liability for a credit card and who exercises reasonable care in its use and safekeeping shall not be liable for the unauthorized use of such card. Reasonable care requires the person to whom a credit card has been issued to notify promptly the issuer in case of a card which has been lost or stolen. However, failure to notify the issuer shall not result in the liability of more than one hundred dollars ($100) in the unauthorized use of the credit card. Nothing in this chapter will relieve the cardholder of liability if guilty of fraud, misrepresentation, gross negligence, or collusion [1.1].

Payment by Check

No person shall, as a means of identification or for any other purpose, require that a person produce a credit card number for recordation or record a credit card number in connection with a sale of goods or services in which a purchaser pays by check or the acceptance of a check. A person aggrieved by a violation of this section shall be entitled to institute an action to recover such person’s actual damages or one hundred dollars ($100), whichever is greater. Such action shall be brought in the general sessions or circuit court, whichever is appropriate, of the county wherein the defendant resides or has a place of business. In the event the aggrieved party prevails, such party may be awarded reasonable attorney’s fees and court costs in addition to any damages awarded [1.2].

Third-Party Logistics Provider Licensing

If a third-party payment processor provides or coordinates warehousing or other logistics services within Tennessee for a prescription drug and/or prescription device on behalf of a manufacturer, wholesale distributor, or dispenser, the third-party payment processor must be licensed by the Board in accordance with the Chapter, whether physically located within Tennessee or outside Tennessee. Where operations are conducted at more than one location, each such location shall be licensed by the Board. A warehouse provided by a third-party payment processor shall be inspected by the Board’s inspector(s) or inspectors of the state where the warehouse is physically located prior to providing services. Additionally, a third-party payment processor that coordinates with facilities that are engaged in the act of wholesale drug distribution and are also located outside of Tennessee, shall provide documentation to the Board within 60 days of issuance of a third-party payment processor license that each facility used by the third-party payment processor has received either: (a) A Verified-Accredited Wholesale Distributors accreditation from the National Association of Boards of Pharmacy; (b) A manufacturer, wholesaler, or distributor license issued by the Board, including any license modifiers and/or additional registrations; or (c) A manufacturer, wholesaler, or distributor license issued by the state where the facility is physically located, including any license modifiers and/or additional registrations. Failure to provide the required documentation within 60 days of the issuance of a third-party payment processor license or within 60 days from any change in status of any previously submitted documentation may result in disciplinary action [2.1].

Conclusion

In summary, there are no specific laws that prohibit the use of third-party payment processors on websites in Tennessee. However, payment processors must comply with certain requirements under Tennessee law, such as providing merchants with information about fees and promptly supplying them with statements. Additionally, liability for unauthorized use of credit cards and payment by check are regulated under Tennessee law. If a third-party payment processor provides or coordinates warehousing or other logistics services within Tennessee for a prescription drug and/or prescription device on behalf of a manufacturer, wholesale distributor, or dispenser, the third-party payment processor must be licensed by the Board in accordance with the Chapter, whether physically located within Tennessee or outside Tennessee.

Source(s):
Jurisdiction

Tennessee