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HB1930
HOUSE OF REPRESENTATIVES
H.B. NO.
1930
THIRTY-THIRD LEGISLATURE, 2026
STATE OF HAWAII
A BILL FOR AN ACT
relating
to CONSUMER PROTECTION
.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
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SECTION 1.
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The legislature finds that, historically,
merchants treated credit card processing fees as a routine cost of doing
business and did not pass these fees on to consumers.
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Early federal law prohibited credit card
surcharges, and although those restrictions expired in 1984, they reflected a
long-standing public policy aimed at preventing excessive charges to consumers.
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The legislature further finds that
major credit card networks once barred merchants from imposing surcharges.
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Over time, these prohibitions were relaxed or
eliminated, allowing merchants to begin passing processing fees on to
consumers.
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While several consumer
protections exist for debit card transactions, including contractual
restrictions that prevent merchants from imposing certain additional charges,
these protections do not extend to, cap, or directly regulate surcharges or
convenience fees for credit card transactions.
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Therefore, establishing reasonable
limits and disclosure standards on credit card and convenience fees is
necessary to ensure fairness and transparency in the allocation of credit card
payment processing costs, balancing consumer protection and merchant flexibility.
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The purpose of this Act is to
protect consumers from excessive credit card processing fees and convenience
fees by:
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(1)
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Prohibiting merchants
from imposing credit card processing fees or convenience fees, under certain
conditions
;
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(2)
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Ensuring that
payment processing costs are reasonable and transparent; and
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(3)
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Codifying existing
industry protections that prohibit merchants from imposing surcharges on debit
card transactions.
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SECTION 2.
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Chapter 481B, Hawaii Revised Statutes, is
amended by adding a new section to be appropriately designated and to read as
follows:
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�481B-
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Credit
card processing fees; convenience fees; limitations.
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(a)
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No merchant with annual gross income
exceeding $500,000 shall impose any credit card processing fee or convenience
fee.
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(b)
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A
merchant with a gross income threshold that is equal to or less than the amount
in subsection (a) shall not impose a credit card processing fee or convenience
fee that exceeds the lesser of:
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(1)
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Two per cent of
the total amount of the transaction; or
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(2)
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The merchant's
actual cost of processing the transaction.
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(c)
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No merchant shall increase the price of any
good or service, or otherwise alter or adjust the advertised or posted price,
solely because the consumer elects to pay with a credit card.
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Any increase in price based on the method of
payment shall be considered a credit card processing fee or convenience fee
subject to the limitations of this section.
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(d)
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Any credit card processing fee or convenience
fee charged under this section shall be:
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(1)
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Clearly and
conspicuously disclosed to the consumer prior to the completion of the
transaction; and
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(2)
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Displayed as a
separate line item on any receipt or invoice provided to the consumer.
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(e)
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No merchant shall impose multiple fees for
the same transaction that collectively exceed two per cent of the total amount
of the transaction.
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(f)
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Nothing in this section shall be construed to
prohibit a merchant from offering cash discounts or other price reductions in
compliance with state and federal law.
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(g)
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No merchant shall impose any surcharge,
credit card processing fee, convenience fee, or additional fee on a consumer
for using a debit card, whether processed as a "debit" or
"credit" transaction.
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(h)
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A violation of this section shall constitute
an unfair or deceptive act or practice under section 480-2 and shall be subject
to all remedies and penalties provided in that section.
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(i)
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The department of commerce and consumer
affairs may adopt rules pursuant to chapter 91 to effectuate the purposes of
this section.
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(j)
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For the purposes of this section:
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"Convenience fee" means
any fee charged to a consumer for the ability to make a payment by means other
than cash or check, including electronic or online payment systems.
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"Credit card processing
fee" means any surcharge, fee, or additional amount imposed on a consumer
for the use of a credit card, charge card, or similar electronic payment
method.
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"Merchant" means any
person, business, or entity that sells goods or services to consumers in the
State.
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SECTION 3.
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New statutory material is underscored.
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SECTION 4.
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This Act shall take effect on January 1,
2027.
INTRODUCED BY:
_____________________________
Report Title:
Credit
Card Processing Fees; Convenience Fees; Consumer Protection; Merchants;
Limitations
Description:
Prohibits
merchants from imposing credit card processing fees or convenience fees, under
certain conditions.
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Ensures that
payment processing costs are reasonable and transparent.
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Prohibits
merchants from imposing surcharges on debit card transactions.
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Effective 1/1/2027.
The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.