Bill > A2416

Introduced Session

This bill regulates credit card interchange fees. An interchange fee, commonly referred to as a "swipe fee," is a fee paid by a merchant's acquiring bank to a customer-cardholder's issuing bank as part of an electronic payment card transaction. The merchant's bank then passes this fee onto the merchant. There is little competition regarding credit card interchange fee pricing as Visa and MasterCard, the two largest companies in the industry, set the pricing with their member banks and smaller merchants have no negotiating power to change pricing. As consumers increasingly use debit and credit cards to purchase goods and services, merchants must agree to accept these cards as a form of payment in order to stay in business, but often pass along the costs of the interchange fees onto consumers which inflates the prices of goods and services. Current federal law regulates debit card interchange fees but does not address the fees associated with credit card transactions. This bill regulates credit card interchange fees by prohibiting an electronic payment system from:· imposing any requirement, condition, penalty, or fine in a contract with a merchant relating to the display of pricing for goods or services for sale by the merchant;· inhibiting the ability of any merchant to offer its customers discounts or in-kind incentives for using cash or a debit card or credit card of another electronic payment system;· inhibiting the ability of any merchant to decide not to accept the products of an electronic payment system at one of its locations while still accepting the products of that electronic payment system at other locations;· preventing any merchant from setting a minimum dollar value, provided the minimum is not set below $10, or a maximum dollar value for its acceptance of a credit card;· limiting the number of electronic payment systems through which a credit card transaction may be processed to only one or only affiliated electronic payment systems; or· inhibiting any merchant from choosing the electronic payment system through which a credit card transaction is processed. Under the bill, an electronic payment system is defined as, "an entity which is not a national bank that directly, or through licensed members, processors or agents, provides the proprietary services, infrastructure, and software that route information and data to facilitate transaction authorization, clearance, and settlement, and that merchants access in order to accept a brand of general-purpose credit cards, charge cards, debit cards or stored-value cards as payments for goods or services." A violation of the bill's provisions is an unlawful practice under the consumer fraud act, P.L.1960, c.39 (C.56:8-1 et seq.) An unlawful practice is punishable by a monetary penalty of not more than $10,000 for a first offense and not more than $20,000 for any subsequent offense. In addition, a violation can result in cease and desist orders issued by the Attorney General, the assessment of punitive damages, and the awarding of treble damages and costs to the injured. The bill further specifies that an electronic payment system found to be in violation must reimburse all affected merchants for all chargebacks, fees, and fines collected from the affected merchants during the period of time in which the electronic payment system was in violation.

Committee Categories

Erik Peterson (R)*,  Eliana Pintor Marin (D)*,  Annette Quijano (D)*,  Nancy Muñoz (R),  Gary Schaer (D), 

Introduced, Referred to Assembly Consumer Affairs Committee (on 01/09/2024)

Official Document