Bill > S05558

This bill enacts the "Interchange Fee Prohibition Act," which aims to prevent payment card networks, acquirer banks, issuers, and processors from charging interchange fees on the tax and gratuity portions of electronic payment transactions. The bill provides detailed definitions for key terms like electronic payment transactions, credit and debit cards, and payment card networks. It requires merchants to transmit tax and gratuity amount data during the authorization or settlement process to avoid being charged interchange fees on those amounts. If a merchant does not initially provide this data, they can submit tax documentation within 180 days, after which the issuer must credit back the interchange fees charged on tax and gratuity amounts. The bill also prohibits entities from manipulating interchange fee calculations to circumvent the law's intent. Violations can result in civil penalties of $1,000 per electronic payment transaction, and entities are restricted from distributing or misusing transaction data beyond facilitating the payment or as required by law. The act will take effect 180 days after becoming law, providing time for affected parties to adjust their practices to comply with the new requirements.

Business and Industry

https://www.nysenate.gov/legislation/bills/2025/S5558