Online electronic payments offer consumers the convenience of shopping and paying for goods from the comfort of their own homes. Even before the COVID-19 public health crisis, online shopping and bill paying was on the rise. However, just because something is easy does not mean it is entirely safe. For example, at least three legal issues surround online electronic payments.
#1. Privacy
Consumers give personal information when making online electronic payments. Typically, they must enter their names, addresses, and other information along with their credit card or account numbers. Businesses that store this information have a duty to protect it from unauthorized access and use.
The European Union enacted the General Data Protection Regulation (GDPR), a privacy and security law. Many U.S.-based companies have complied with the GDPR because some of their clients and potential customers might be based in Europe.
When storing a customer’s personal information, keep privacy laws in mind. Discuss the issue with your corporate counsel or business lawyer to make sure your business remains in compliance.
#2. Security
We frequently read about data breaches, some of them affecting millions of customers. Hackers may attack a company’s computer systems to harvest valuable personal information about the company’s customers.
Florida laws, including the Florida Information Protection Act of 2014, strive to protect consumers’ private information. One way is to require that companies put procedures in place and notify consumers if a data breach has occurred.
The urgency is particularly strong with online electronic payments. Hackers could drain bank accounts or max out credit cards from before consumers know what has happened.
#3. Fraud
Before online electronic payments became the norm, many people paid by cash or check. Retailers and service providers were more likely to see the customer face-to-face and could ask for identification. Now, the Internet seems more anonymous. Anyone with a customer’s information could buy things until the fraud is detected.
Online sellers can add additional safety features designed to detect fraud in online electronic payments. For example, some programs can monitor a seller’s IP address and location. A customer based in Florida typically would order from an IP address located in Florida, not Idaho. At the very least, the online merchant has the opportunity to contact the Florida-based client to see if they were temporarily located in Idaho before authorizing their purchase.
Does Your Company Offer Online Electronic Payments?
If so, then take some time to discuss legal issues with your corporate counsel or business attorney.
Attorney Richard Sierra at the Florida Small Business Center assists clients like you with business and litigation matters. As always, Our Goal Is to Help You Succeed™. For an appointment, you may call us at 1-866-842-5202 or use the contact form on our website. We represent clients throughout the State of Florida, including Coral Springs, Coconut Creek, Boca Raton, Delray Beach, Pompano Beach, Sunrise, Fort Lauderdale, Miami, West Palm Beach, Jupiter, Deerfield Beach, Stuart, Port St. Lucie, Orlando, Naples, Fort Myers, Sarasota, Tampa, and surrounding communities.