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S4160
SENATE, No. 4160
STATE OF NEW JERSEY
222nd LEGISLATURE
�
INTRODUCED MAY 11, 2026
Sponsored by:
Senator� JOHN J. BURZICHELLI
District 3 (Cumberland, Gloucester and Salem)
Co-Sponsored by:
Senators Gopal, Johnson and Tiver
SYNOPSIS
���� Prohibits credit card interchange fees in certain
circumstances.
CURRENT VERSION OF TEXT
���� As introduced.
��
An Act
concerning certain credit and debit card
interchange fee practices and supplementing P.L.1960, c.39 (C.56:8-1 et seq.).
����
Be It
Enacted
by the Senate and General Assembly of
the State of New Jersey:
1.
��� As used
in this act:
���� �Acquirer bank� means a member
of a payment card network that contracts with a merchant for the settlement of
electronic payment transactions. An acquirer bank may contract directly with
merchants or indirectly through a processor to process electronic payment
transactions.
���� �Credit card� means any
instrument or device linked to an established line of credit, whether known as
a credit card, charge card, credit plate, or by any other name, issued with or
without fee by an issuer for the use of the cardholder in satisfying
outstanding financial obligations, obtaining money, goods, services, or
anything else of value on credit.
���� �Debit card" means any
instrument or device, whether known as a debit card, automated teller machine
card, or by any other name, issued with or without fee by an issuer for the use
of the cardholder in obtaining money, goods, services or anything else of value
through the electronic authorization of a financial institution to debit the
cardholder's account. The term shall include a general-use prepaid card, as
defined in 15 U.S.C. s.1693l-1. The term does not include a paper check.
���� �Electronic payment
transaction� means a transaction in which a person uses a debit card, credit
card or other payment code or device, issued or approved through a payment card
network to debit a deposit account or use a line of credit, whether authorization
is based on a signature, personal identification number or other means.
���� �Eligible contribution� means:
���� (1)�� a charitable
contribution, as that term is defined in 26 U.S.C. s.170(c); or
���� (2)�� a contribution, as
defined in section 28 of P.L. 2023, c.30 (C.19:44A-3), that is a transfer of
money.
���� �Fee schedule� means a
schedule, list, table, chart, or similar document or agreement, whether
publicly disclosed or not, that sets forth or fixes the amount, or the formula
for determining the amount, of one or more fee rates.
���� �Gratuity� means money
voluntarily given to an employee from a guest, patron, or customer in
connection with services rendered.
���� �Interchange fee� means a fee
established, charged or received by a payment card network for the purpose of
compensating the issuer for its involvement in an electronic payment
transaction.
���� �Issuer� means the business
organization or financial institution which issues a credit card or its duly
authorized agent.
���� �Merchant� means a person that
accepts electronic payment transactions and collects and remits a tax.
���� �Payment card network� means
an entity that directly, or through licensed members, processors or agents,
provides proprietary services, infrastructure and software that routes
information and data to conduct debit card or credit card transaction
authorization, clearance and settlement, and that a merchant or seller uses to
accept as a form of payment a brand of credit or debit card.
���� �Processor� means an entity
that facilitates, services, processes, or manages the debit or credit
authorization, billing, transfer, payment procedures, or settlement with
respect to any electronic payment transaction.
���� �Tax� means any tax imposed
under P.L.1966, c.30 (C.54:32B-1 et. seq.), or P.L.2010, c.22 (C.54:39-101 et
seq.), or P.L.1990, c.42, (C.54:15B-1 et. seq.) and any tax imposed by 26
U.S.C. s. 4081 et. seq.
���� 2.��� a.�������� A payment
card network, whether directly or through an agent, acquirer bank, processor,
contract, requirement, condition, penalty, technological specification, or
inducement, shall not:
���� (1)�� establish, charge, or
put forward on a fee schedule an interchange fee if:
���� (a)�� the fee is or includes a
percentage multiplied by the gross dollar amount of a transaction conducted
with a debit card or credit card; and
���� (b)�� the fee does not exclude
from the gross dollar amount of the transaction any amount attributable to a
tax or a gratuity on the transaction;
���� (2
)�� increase
the rate or amount of an interchange fee or other fee that applies to the
portion of an electronic payment transaction other than the portion
attributable to a tax or a gratuity on the transaction in an attempt to, or in
a manner that would, circumvent the
prohibition set forth in paragraph (1)
of this subsection; or
���� (3)�� establish, charge, or
put forward on a fee schedule an interchange fee that the payment card network
knows or reasonably should know has been used in the current or previous
calendar year by one or more issuers other than the payment card network to
determine the amount of an interchange fee received or charged with respect to
an eligible contribution made by debit card or credit card, unless the
interchange fee does not exceed:
���� (a) � two-tenths
of one percent of the amount of an eligible contribution made by means of a
debit card; or
���� (b)�� three-tenths of one
percent of the amount of eligible contribution made by means of a credit card.
b.��� (1)�
To comply with paragraph (1) of subsection a. of this section, a payment card
network may:
(a)�� exclude
the amount of any tax or gratuity from the calculation of interchange fees
specific to each electronic payment transaction at the time of settlement; or
���� (b)�� within 30 days after the
date of settlement of an electronic payment transaction, rebate to the
merchant�s settlement account an amount of an interchange fee equal to the
reduction in the interchange fee that would have occurred had the calculation
of the interchange fee at the time of settlement excluded the amount
attributable to any tax or gratuity on the transaction.
���� (2)�� If a merchant is unable
to capture and transmit tax information relevant to the electronic payment
transaction at the time of settlement, the merchant may, within 180 days of the
date of the transaction, submit documentation to the payment card network or
its agent identifying any tax or gratuity on the transaction to the payment
card network and, within 30 days of the submission of that documentation, the
payment card network shall ensure that the merchant�s account is credited an
amount equal to the reduction in the interchange fee that would have occurred
had the calculation of the interchange fee at the time of settlement excluded
the amount attributable to any tax or gratuity on the transaction.
���� 3.��� a.�������� A payment
card network that violates the provisions of this act shall:
���� (1)�� be
liable to a civil penalty of up to $1,000 per violation to be collected in a
summary proceeding pursuant to the �Penalty Enforcement Law of 1999,� P.L.1999,
c.274 (C.2A:58-10 et seq.); and
���� (2)�� refund the portion of
any fee that was collected in violation of this act.
���� b.��� The Attorney General may
file suit to seek injunctive relief and, if appropriate, order restitution from
any payment card network that violates the provisions of this act.
���� 4.��� This act shall take
effect on the 180th day after the date of enactment, except that the Attorney
General may take any anticipatory action in advance as shall be necessary for
the implementation of this act.
STATEMENT
���� This bill establishes
limitations on a payment card network�s ability to implement interchange fees. �
���� The bill prohibits payment
card networks from implementing an interchange fee when the fee: (1) includes a
percentage multiplied by the gross dollar amount of a debit or credit card
transaction, or (2) does not exclude any attributable tax or gratuity from the
gross dollar amount.� The bill prohibits payment card networks from increasing
the rate of an interchange fee or other similar fee that applies to the portion
of an electronic payment transaction other than the portion attributable to a
tax or gratuity on a transaction to circumvent any prohibitions in the bill.�
It also prohibits payment card networks from establishing a fee schedule for an
interchange fee that it knows has been used by another issuer within the
calendar year unless the fee does not exceed two-tenths of one percent of the
amount of an eligible contribution made by a debit card or three-tenths of one
percent of the amount of an eligible contribution made by a credit card.
���� Under the bill, payment card
networks are required to either exclude the amount of any tax or gratuity from
the calculation of interchange fees for each electronic payment transaction at
the time of settlement or rebate an amount of an interchange fee equal to the
reduction in the interchange fee that would have occurred had the calculation
of the interchange fee at the time of settlement had tax or gratuity been
excluded within 30 days.
���� A payment card network in
violation of the bill will be subject to a civil penalty of up to $1000 per
violation, payable to the plaintiff, and required to refund the portion of fees
collected when acting in violation of the bill.� The Attorney General may file
suit to seek injunctive relief and order restitution from a payment card
network that violates the provisions of this bill. �