Businesses are often hesitant about accepting online payments due to the complex rules and regulations that they need to comply with. Which is a shame because accepting online payments is a great way for business owners to increase sales, improve cash flow and reduce the risk of delayed and missed payments.
So how do you go work out which online payment methods are right for your business? How do you ensure your business is compliant with the laws surrounding online payments?
The good news is, it's easier than you might think – it's all about making sure you're informed, which is where we step in. We highlight al the things you need to know about payment rules and regulations when using online payment systems and the way companies can accept payment solutions online . Our aim is to teach you about the main rules governing online payments.
Synopsis of consumer contract regulations
Consumer contract regulations are a set of rules that apply to all businesses selling goods or services to consumers.
These regulations are enforced by the Competition and Markets Authority (CMA), which regulates how businesses behave in the UK market. The CMA has the power to fine companies who break these rules, so it's important that you know what they are before you start using online payments.
Consumer contracts can be broken down into two categories: business-to-consumer (B2C) agreements, where a business sells goods or services directly to a consumer without any third party involvement; and professional/agency relationships between two parties who work together at arm's length. A third type of consumer relationship is known as an 'adverse selection' situation where a large number of small suppliers compete against each other for business from one big customer - this often happens when there is only one supplier offering similar products across many different markets like fashion retailing or electronics manufacturing but with different marketing strategies such as pricing policies etc.
Card network regulations
Card network regulations are the rules that govern which cards can be used for online payments in the UK. These rules were introduced to protect consumers from fraud and ensure that they are protected from any fraudulent charges made by businesses when using their cards.
Card networks include Visa, MasterCard and American Express. The reason these card networks have been set up is because it allows them to build up a database of all transactions made using their respective cards which means they can detect and block fraudulent transactions more easily than if there was no such system in place.
PCI DSS compliance
PCI DSS compliance is a set of security standards for merchants and service providers that handle credit card information. If you are a merchant, you must comply with the PCI DSS. If you don't comply with the PCI DSS , your company will pay fines that can reach as high as $500 million per violation or 2% of annual revenue (whichever is higher).
The PCI DSS only applies to merchants and service providers that handle credit card information from card networks such as Visa, MasterCard, American Express etc, but not banks or other financial institutions like banks or building societies which do not process payments electronically through their terminals.
Anti-money laundering
While most people have heard of anti-money laundering (AML) and know what it entails, there are some who may not know exactly how important this is.
Anti-Money Laundering is defined as "the prevention of the misuse of financial services by criminals or terrorists". It has become increasingly important today because there are many ways that money can be used to finance criminal activities such as terrorism, drug trafficking and human trafficking etc.
This means that banks must always ensure compliance with AML procedures before accepting deposits from customers or issuing loans to those customers so that their funds cannot be misused by criminals in any way shape or form!
NACHA operating rules
NACHA Operating Rules govern how electronic payments are processed in the US. Specifically, they apply to financial institutions and their agents who accept credit cards or PayPal as payment methods. If you operate in the US and UK, you will need to take account of NACHA too.
The NACHA Operating Rules were established in 1994 by the National Automated Clearing House Association (NACHA). They set out standards for handling cardholder information and payments between banks, clearinghouses and other entities processing them through Automated Clearing House (ACH).
Consumers can use online payments to make purchases or transfer funds between accounts at different financial institutions using their mobile phone or computer providing it is connected directly with these services.
Payment Service Directive 2 (PSD2) requirements
PSD2 is a new European Union directive that requires all companies that provide payment services in the EU to implement strong data protection measures. The requirements of PSD2 include:
- A requirement to obtain and hold customer consent unless consent is not required by law or regulation.
- The right for consumers to access their own personal data.
- Data privacy notices must be provided in plain language.
- A requirement for companies providing online payment services to implement security measures against fraud, including encryption keys or other technical means within 15 days after receipt of data from a consumer (unless otherwise permitted by law).
Fiscal compliance
This section is one of the most complex areas of financial regulation, but it's worth understanding because it has an impact on how you can use online payments in the UK.
The Consumer Contracts Regulations (CCR) apply to all contracts entered between consumers and merchants. It also applies to businesses that offer goods or services over the internet, such as Amazon or eBay. CCR rules require that there be certain provisions in your contract with customers that ensure customers know what they're getting into when using any kind of card-based payment method, for example:
- You must tell your customers about their rights before accepting a credit or debit card for payment; otherwise this could be considered unfair under CCR rules related to unconscionability.
- You must make sure any fees are clearly stated up front so that there's no confusion about whether those fees will be included in their purchase price; otherwise this could also violate CCR rules on unfair practices.
Conclusion
We have outlined a few of the most important laws and regulations that govern online payments in the UK. These laws are constantly changing, so make sure to do your research before using any online payment service.
Copyright 2022. Featured post made possible by Rene Mulyandari.