Bill > S2522

This bill, titled the "Interchange Fee Restriction Act," prohibits the charging of interchange fees, which are fees paid to the bank that issued a credit or debit card for processing a transaction, on the portion of a sale that represents sales and use tax or excise tax when a customer pays with a credit or debit card. The act defines various terms related to electronic payment transactions, including "acquirer bank" (the bank that processes payments for a merchant), "issuer" (the bank that issued the card), "payment card network" (like Visa or Mastercard), and "merchant" (defined here as someone who collects and remits taxes). To benefit from this prohibition, merchants must inform their acquirer bank or its designee of the tax amount during the transaction's authorization or settlement process. If a merchant fails to do so, they have 180 days to submit tax documentation to receive a refund of any interchange fees charged on the tax amount. The bill also makes it illegal for entities to increase interchange fees on the non-tax portion of a transaction to compensate for the lost fees on taxes, and violations are considered deceptive trade practices subject to penalties. This act will become law immediately upon its passage.

Business and Industry

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