Bill > S688

This bill proposes to amend Chapter 140D of the General Laws to prohibit card interchange fees on tax and gratuity amounts during electronic payment transactions. The bill defines numerous technical terms including "electronic payment transaction," "interchange fee," and various payment network participants like issuers, acquirer banks, and processors. Specifically, the bill prevents financial institutions from charging interchange fees on tax or gratuity amounts if the merchant provides clear documentation of these amounts during transaction authorization or settlement. If a merchant doesn't initially transmit tax or gratuity data, they can submit supporting documentation within 180 days, after which the issuer must credit back the interchange fees charged on those amounts. The bill includes strict penalties of $1,000 per transaction for violations and prohibits payment networks from compensating for lost interchange fees by increasing rates on other parts of the transaction. Moreover, the bill includes a severability clause, meaning if any part of the legislation is found unconstitutional, the remaining provisions will remain in effect. The overall intent appears to be protecting merchants from being overcharged fees on tax and tip portions of electronic payment transactions.

Business and Industry

https://malegislature.gov/Bills/194/S688