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Third Party Payment Network

Definition:

A third party payment network is any agreement or arrangement:

  • Which involves the establishment of accounts with a central organizationby a substantial number of persons who—
    • are unrelated to such organization,
    • provide goods or services, and
    • have agreed to settle transactionsfor the provision of such goods or services pursuant to such agreement or arrangement,

 

  • Which provides for standards and mechanisms for settling such transactions, and
  • Which guarantees persons providing goods or services pursuant to such agreement or arrangement that such persons will be paid for providing such goods or services.

 

A third party payment network does not include any agreement or arrangement which provides for the issuance of payment cardsCitation IRC § 6050W. Returns relating to payments made in settlement of payment card and third-party network transactions