Payment Card Networks' Fees

Plain English Breakdown

Using official source text because the generated explanation was unavailable or could not be confirmed against the official bill text.

Payment Card Networks' Fees

An interchange fee is a fee established, charged, or received by a payment card network for the purpose of compensating an issuer for its involvement in an electronic payment transaction.

What This Bill Does

• An interchange fee is a fee established, charged, or received by a payment card network for the purpose of compensating an issuer for its involvement in an electronic payment transaction.
• The act states that a payment card network shall not, whether directly or indirectly: Establish, charge, or include in a fee schedule an interchange fee if: The interchange fee is or includes a percentage multiplied by the gross dollar amount of a transaction conducted with a debit card or credit card; and The fee does not exclude from the gross dollar amount of the transaction any amount attributable to a tax on the transaction; or Increase the rate or amount of fees that apply to the nontax portion of a transaction in an attempt to, or in a manner that would, circumvent the prohibition on interchange fees established by the act.
• The act exempts electronic payment transactions involving a debit card or credit card issued by a person, or agent of a person, that issues a debit card or credit card to a cardholder (issuer) that: Did not, during any point in the previous calendar year, hold consolidated worldwide banking and nonbanking assets, including assets of affiliates, other than trust assets under management, of more than $60 billion; or As of February 1, 2026, had contracted to brand the card with the brand of a financial institution chartered or authorized to do business in this state that did not, during any point in the previous calendar year, hold consolidated worldwide banking and nonbanking assets, including assets of affiliates, other than trust assets under management, of more than $60 billion.
• An issuer that satisfies either of these exemption descriptions must identify to a payment card network all of the issuer's debit cards and credit cards that are used for exempted transactions.

Limits and Unknowns

• This entry is temporarily using official source text because the generated explanation could not be confirmed against the official bill text during the last sync.

Official Summary Text

An interchange fee is a fee established, charged, or received by a payment card network for the purpose of compensating an issuer for its involvement in an electronic payment transaction. The act states that a payment card network shall not, whether directly or indirectly:
Establish, charge, or include in a fee schedule an interchange fee if:
The interchange fee is or includes a percentage multiplied by the gross dollar amount of a transaction conducted with a debit card or credit card; and
The fee does not exclude from the gross dollar amount of the transaction any amount attributable to a tax on the transaction; or
Increase the rate or amount of fees that apply to the nontax portion of a transaction in an attempt to, or in a manner that would, circumvent the prohibition on interchange fees established by the act.
The act exempts electronic payment transactions involving a debit card or credit card issued by a person, or agent of a person, that issues a debit card or credit card to a cardholder (issuer) that:
Did not, during any point in the previous calendar year, hold consolidated worldwide banking and nonbanking assets, including assets of affiliates, other than trust assets under management, of more than $60 billion; or
As of February 1, 2026, had contracted to brand the card with the brand of a financial institution chartered or authorized to do business in this state that did not, during any point in the previous calendar year, hold consolidated worldwide banking and nonbanking assets, including assets of affiliates, other than trust assets under management, of more than $60 billion.
An issuer that satisfies either of these exemption descriptions must identify to a payment card network all of the issuer's debit cards and credit cards that are used for exempted transactions. The payment card network shall not, whether directly or indirectly through an agent, contract, requirement, condition, penalty, technological specification, or inducement or otherwise:
Deny such a card access to transaction processing systems; or
Impose any fee increase or penalty on the issuer or on a financial institution branded on the card for any costs of upgrades or configurations to payment and processing systems that may be necessary to comply with the act with respect to such cards.
If a payment card network violates the act's prohibitions, a merchant, consumer, or other person that is injured as a result of the violation may bring a civil action against the payment card network. The act sets forth the penalties to be awarded in such an action.
For the 2026-27 state fiscal year and each state fiscal year thereafter, the act requires each retail business that has more than 500 employees statewide on the effective date of the act to apply any savings resulting from the act to reducing prices for consumers or investing in employee wages or benefits.
(Note: This summary applies to this bill as enacted.)