Under a Washington law effective July 1, 2010, certain entities involved in payment card transactions may be liable to financial institutions for costs associated with reissuing payment cards after security breaches. Designed to encourage the reissuance of payment cards as a means of mitigating harm caused by security breaches, Washington H.B. 1149 applies to three types of entities: businesses, processors and vendors. Under the law, a business is an entity that “processes more than six million credit card and debit card transactions annually, and who provides, offers, or sells goods or services to . . . residents of Washington.” A processor is any entity, other than a business, that “directly processes or transmits [payment card] account information for or on behalf of another person as part of a payment processing service.” A vendor is any “entity that manufactures and sells software or equipment that is designed to process, transmit, or store [payment card] account information or that maintains account information that it does not own.”
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