a. Use of Third- Party Payment Processors: In no instance are Cardholders (CHs) authorized to establish an account when using a third-party payment processor, as doing so could require acceptance of or agreement to terms and conditions or result in commitment of funds that have not been legally allocated for purchases. Transactions using third-party payment processors are considered high risk, as all available transaction data may not be completely passed to the issuing bank (which can adversely affect reporting, reconciliation, and oversight, including data mining (detection of improper card use)), and may adversely affect transaction dispute terms and processes, among other considerations.

When selecting merchants to fulfill requirements, CHs shall use the following procedures:

1) Minimize use of third-party payment processors to the maximum extent practicable.

2) Ask if the merchant would require use of a third-party payment processor, if there is any doubt regarding merchant use of one.

3) If it is still found necessary to purchase from a merchant that requires uses a third-party payment processor, CHs and A/BOs must ensure adequate supporting documentation clearly showing there was a detailed review of the purchase, and that purchase from a merchant requiring use of a third-party payment processor was unavoidable.

b. Additionally, Component Program Managers must ensure CHs are:

1) Appropriately trained on DoD GPC Third-Party Payment Policy; DoD GPC Policy for Non-DoD e-Commerce Platforms; related Component policy; and third-party payment processor requirements and risks in OMB Circular A-123, Appendix B; and GSA Smart Bulletin No. 023 entitled “GSA SmartPay-Third Party Payment Processors”.

2) Never authorized to establish an account when using third-party payment services for processing GPC payments.

c. GPC oversight personnel and CHs should be aware that in accordance with GSA Smart Bulletin No. 23, third-party payment policy does not apply to e-commerce platforms or brick-and-mortar merchants that do not accept payment using third-party payment processors. See Attachment 2 for additional guidance.