States keep targeting card fee relief

State lawmakers across the country are pushing to lower the cost of accepting credit cards by targeting interchange fees on the tax and tip portions of transactions. Despite a high-profile legal battle currently stalling a similar law in Illinois, over 30 new bills have been introduced in statehouses this year. These proposals generally aim to prevent banks and payment processors from charging swipe fees on the sales tax collected by a merchant or on the tips given to employees. For your business, this means a potential reduction in overhead, though it comes with a major technical headache. If these laws pass, payment processors will have to overhaul how they calculate fees in real-time at the point of sale. While saving 2-3% on the tax portion of a large sale—like a furniture set or an engine repair—adds up, the banking industry is fighting back hard. They argue these rules are nearly impossible to implement and interfere with federal banking standards. Retailers should watch these developments closely. While the Illinois law is currently blocked by a preliminary injunction, the sheer volume of similar bills suggests that state-level pressure on credit card fees isn't going away. If you operate in multiple states, you may eventually face a patchwork of different payment processing rules that change how you reconcile your daily sales and tax reporting.

Source: Payments Dive

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