If a rushed provision contained within the Illinois General Assembly’s revenue bill actually comes to implementation, Illinoisans might find themselves paying at the pump with their credit card and then heading inside to pay their sales tax in a separate transaction. That’s one possible outcome, at least in the short term, of the so-called Interchange Fee Prohibition Act, part of a bill passed in the wee hours of Wednesday morning and clearly the result of lobbying by the Illinois Retail Merchants Association. Interchange fees, sometimes called swipe or credit card fees, represent the charges by banks and other parties to process credit card transactions, delivering merchants the guaranteed cash in a timely, secure way and also billing the cardholder.
They are why some merchants sometimes charge you more (typically 2% to 4%) for using your plastic, or your Apple Pay, and they are a furiously contested thing. Merchants, who pay them, want to keep them low. Banks and processing companies, who profit from them, want to keep them buoyant.
This is far from chump change: The fees netted the industry some $100 billion in 2023. In the middle are consumers, many of whom are addicted to frequent flyer miles, loyalty points, cash back, Chase points and all the other incentives that credit card companies offer to keep their customers and that are funded by those very fees, which generally are lower outside the U.S.
, where rewards are much less generous. Since the pandemic, of course,.
