State Privacy Laws Are Expanding: What It Means for Merchant Portfolios in 2026

TL;DR

• State privacy laws are expanding, prompting payment programs and their merchants to take a more proactive approach to website regulatory compliance.

• Cross-state laws strengthen regulation regarding minors’ data, consumer data rights, automated decision-making, and data broker transparency.

• Arkansas, Indiana, Kentucky, and Rhode Island are issuing new privacy laws, and this trend is likely to continue across the country.

• Developing future-focused data protection strategies will be critical to limiting risk exposure and improving merchant compliance.

State Privacy Laws Are Expanding: What Merchants Need to Know in 2026

Data privacy laws are expanding both rapidly and intermittently across state lines, exposing merchants and their payment platforms to new compliance risks. It’s nearly impossible for merchants today to keep up with diverse privacy law trends, audit processes, and infrastructure adjustments.

Payment providers are increasingly expected to help merchants navigate these requirements, even when the underlying website obligations sit with the merchant. As risks shift and cross-state regulations strengthen, it’s critical to take a more proactive approach to both compliance standards and merchant workflows.

Upcoming Legislation: Privacy Law is Strengthening

Three new comprehensive privacy laws are now in effect in Indiana, Kentucky, and Rhode Island, joining regulatory updates already active in California, Connecticut, Oregon, and Utah. Arkansas will add its own law starting July 2026, continuing the state-by-state expansion of the U.S. privacy landscape.

There are a few main trends relevant to ISOs, payment platforms, acquirers, and their merchants:

• Minors' data protection is drawing increased regulatory attention, with stricter requirements around consent and data handling for younger consumers.

• Automated decision-making, from risk scoring to underwriting algorithms, faces new disclosure and opt-out obligations in several states.

• Data broker transparency requirements are expanding, relevant for any partners sharing or reselling cardholder or transaction-adjacent data.

• Consumer rights are broadening, including data correction rights and mandated support for universal opt-out mechanisms, such as the Global Privacy Control.

In short: Payment providers handling personal data alongside cardholder data face compounding compliance obligations. Multi-state operations should map data flows against each applicable state's requirements, particularly where automated decisioning or data-sharing practices touch consumer or minor data.

There are ways to streamline this process, however. Adhering to cross-strate laws can help payment companies develop a roadmap based on emerging trends. 

5 Cross-State Privacy Trends Payment Providers Should Watch

Several cross-cutting themes are emerging across state privacy laws that warrant attention from payment ecosystem participants:

1. Opt-in consent for sensitive personal information is becoming the norm rather than opt-out, raising the bar for processing financial, biometric, and other sensitive data categories.

2. Internal data practices may be affected. Depending on the state and the type of data involved, some privacy frameworks can extend obligations beyond consumer-facing data to employee, job applicant, HR, and hiring processes.

3. Enforcement exposure may vary by state. Privacy enforcement models differ across states, and certain privacy-related laws may create additional regulatory or litigation risk depending on the law, the data involved, and how the business collects, uses, or shares that data.

4. Cure periods are narrowing or disappearing in newer statutes, reducing the margin for error.

5. Children and teens remain a top enforcement priority, with heightened consent and data-minimization requirements for minors.

These trends signal tightening compliance expectations. ISOs and platforms should review consent flows, HR data practices, and incident response timelines. Implementing these adjustments to your compliance infrastructure can improve resilience across likely changes in other states. 

Developing Stronger Data Governance 

As state privacy laws multiply, payment platforms and acquirers need governance practices that scale across jurisdictions rather than a patchwork of state-specific fixes. Payment providers benefit their merchants and lower risk exposure through refining privacy infrastructure in specific areas: 

• Map exposure. Start with a comprehensive data inventory. Know what personal data you collect, where it lives, how it moves through your systems, and which state laws apply based on customer and employee residency.

• Review workflows. Audit internal processes like onboarding, underwriting, fraud monitoring, and HR/hiring to identify where sensitive or automated-decision data is processed, and confirm those workflows support consumer rights requests within requested timelines.

• Standardize privacy choice mechanisms. Where applicable, merchants may need to provide clear opt-out or preference links, such as “Do Not Sell or Share My Personal Information,” “Limit the Use of Sensitive Personal Information,” or a consolidated “Your Privacy Choices” link, depending on the laws that apply to their website and data practices.

• Default to opt-in. For sensitive personal information, build consent flows that require affirmative opt-in rather than relying on opt-out models.

• Audit vendor contracts. Review agreements with all vendor contracts, including compliance vendors, to confirm they include adequate privacy protections, data-use restrictions, and breach notification obligations. 

The best approach, in general, is to adopt universal governance. Rather than tailoring compliance state-by-state, build policies to the strictest applicable standard. This reduces operational complexity and lowers the risk of gaps as new laws take effect.

What is Best-In-Class Compliance Vendor for Payment Platforms?

As privacy and accessibility regulations continue to expand across states, ISOs and payment platforms need a way to help their merchant portfolios stay compliant without adding operational burden. Aperia Compliance addresses this by centralizing website-level compliance into a single, manageable solution:

• ADA accessibility helps merchant websites align with accessibility expectations, reducing exposure to accessibility-related claims and demand letters, which spiked by 27% in 2025 and continue to grow.

• Consent messaging manages privacy disclosures, cookie banners, and consent mechanisms tailored to applicable regional and state requirements, helping merchants stay current as laws evolve.

• Age gating controls support merchants in managing age-related access requirements, relevant as regulatory focus on minors' data protection intensifies.

• User data requests streamline handling of consumer privacy requests, such as access, correction, deletion,  helping merchants meet response-time obligations under state laws.

• Policy generation generates and maintains website policies tied to privacy and data practices, reducing the manual burden of keeping documentation current.

• Ongoing regulatory updates continuously aligns merchant website compliance experiences with the shifting regulatory landscape, so ISOs don't have to manually track every new state law.

Compliance risk doesn't stop at core PCI DSS regulations but extends to how merchants collect, disclose, and manage consumer data on their websites. Aperia Compliance gives your merchants a practical way to reduce legal exposure while giving your own organization a scalable answer to "how do we support compliance across our entire portfolio?" 

Conclusion: Website Regulatory Compliance Needs a Scalable Approach 

State privacy laws are expanding, and website-level compliance is becoming harder for merchants to manage on their own. Without the right processes in place, gaps in accessibility, consent, privacy disclosures, age gating, or user data request workflows can create legal exposure, customer trust issues, and added support burden for payment providers.
Website Regulatory Compliance, powered by Clym gives payment provides a scalable way to help merchants manage evolving website requirements across their portfolios without building the program from scratch.

To learn how Aperia Compliance helps payment providers simplify website regulatory compliance, get in touch with us today.