Changes Needed on Payment Method Act
The Consumer Affairs Department (DACO) is expected to make public Thursday the regulations to enforce the law that orders businesses to provide customers with at least two payment methods, which will have to go through hearings before the agency can levy fines to violators.
Barely two months after its enactment, Act 46 will need further amendments to clarify its language and has created jurisdictional conflicts between DACO and the Treasury Department.
Victor Pizarro, assistant secretary of internal revenues for the Treasury Department, said Treasury and DACO have jurisdiction over licensed services such as doctors, which are already required by a 2015 law, to provide the two methods of payments. Both agencies can levy fines.
DACO has exclusive jurisdiction over the rest of the merchants and businesses but it cannot levy fines because it has yet to approve the regulations that will help implement the law, something that will happen after September.
The law also calls for certain aspects to be enforced by Treasury and others by DACO, according to information that came out during a public hearing of the Senate Labor Relations, Consumer Affairs and Job Creation Committee.
Act 46 amended a 2015 law that required all businesses and individuals providing services for which a license is required, to provide two methods of payment to customers, of which one must be a credit or debit card, electronic transfers, internet payments or direct payment.
Act 46 broadened the 2015 law, known as Act 42, to require all businesses to provide two methods of payments, one of which must be a debit or credit card.
“In the case of the businesses, they are not required unlike the licensed services, to provide alternatives such as electronic transfers, internet payments or direct payment. Also, it does not apply to taxpayers with a volume of business that is less than $50,000 per year,” he said.
In that regard, Treasury asked the Legislature to amend Act 46 to include all merchants and to broaden the methods of payment but one of them must be either credit or debit card, electronic transfers, internet payments or direct payment.
Minority Leader Larry Seilhamer noted that there has to be a limit. “Are we going to require the ice cone vendor to have debit machines?” he asked, noting that there is a contradiction because as part of the regulations, officials are envisioning not requiring the two methods of payments for transactions of less than $10.
He also cautioned that the amendments proposed by Treasury could defeat the purpose of the law because a merchant could require cash and a credit card such as American Express, which not everyone has.
Seilhamer also noted that the government should not be trying to enforce a law, for which it has no regulations first.
Vanessa Rodriguez, a lawyer for Caribbean Cinema, said that the government cannot enforce Act 46 because the law calls for the approval of regulations. “You cannot enforce a law when there are no parameters,” she said.
Caribbean Cinemas used the regulations of the 2015 law as a guide to comply with Act 46 because of the public pressure upon their business to have debt machines. Before the law, they only had debit or credit machines in four movie theaters, including the two Fine Arts theaters.
Caribbean Cinemas had the practice of requiring cash only because it was a fast process and allowed workers to move people out of lines faster, and was also cheaper. “Like other businesses, we are being affected by the costs of energy, water and labor,” she said.
She said the costs of having a second method of payment is about $500,000 for them, a figure that does not include what they have to pay in sales and use tax for the banking transactions.
The lawyer noted that the process of imposing the two methods of payments has been a “trampling one” that will specially hurt small businesses