Resurrecting an old thread. We have several CPAs who process payroll for different companies. The CPAs originally only had their account at the bank and would receive an ACH credit from the business customer, and then debit the CPA account to send the payroll to the employees of the business. A few years ago, the bank decided that it would keep the CPA relationship, but would now require the CPAs customers' to have accounts here. The business has online banking portal and then they create an account for the CPA to login and process the payroll through the business customer's account. Does this meet the definition of a TPPP since they businesses are now our customer also (I do not think it does, but want another opinion)?
From the exam manual (pg 240 of pdf):
Nonbank or third-party payment processors (processors) are bank customers that provide payment-processing services to merchants and other business entities. Traditionally, processors contracted primarily with retailers that had physical locations in order to process the retailers’ transactions. These merchant transactions primarily included credit card payments but also covered automated clearing house (ACH) transactions,221 remotely created checks (RCC),222 and debit and prepaid cards transactions. With the expansion of the Internet, retail borders have been eliminated. Processors now provide services to a variety of merchant accounts, including conventional retail and Internet-based establishments, prepaid travel, telemarketers, and Internet gaming enterprises.
Third-party payment processors often use their commercial bank accounts to conduct payment processing for their merchant clients. For example, the processor may deposit into its account RCCs generated on behalf of a merchant client, or process ACH transactions on behalf of a merchant client. In either case, the bank does not have a direct relationship with the merchant. The increased use of RCCs by processor customers also raises the risk of fraudulent payments being processed through the processor’s bank account. The Federal Deposit Insurance Corporation (FDIC), Office of the Comptroller of the Currency (OCC), and Financial Crimes Enforcement Network (FinCEN) have issued guidance regarding the risks, including the BSA/AML risks, associated with banking third-party processors.223