Interchange Fee Prohibition Act (815 ILCS 151/)

Chapter 815 — Business Transactions

Loans and Credit

This text is maintained by the Legislative Reference Bureau for legislative drafting purposes and is NOT the official text of the Illinois Compiled Statutes; the only official copy is the printed copy maintained by the Secretary of State.

Art. 5 ARTICLE 5.(Amendatory provisions; text omitted)

Art. 10 ARTICLE 10.(The Workforce Development through Charitable Loan Repayment Act is compiled at 110 ILCS 998/)

Art. 150 ARTICLE 150. (Source: P.A. 103-592, eff. 7-1-27 (See Section 70 of P.A. 104-532 for the effective date of Article 150 of P.A. 103-592).)

Sec. 150-1. Short title

(This Section may contain text from a Public Act with a delayed effective date)

Sec. 150-1. Short title. This Article may be cited as the Interchange Fee Prohibition Act. References in this Article to "this Act" mean this Article.

(Source: P.A. 103-592, eff. 7-1-27 (See Section 70 of P.A. 104-532 for the effective date of Article 150 of P.A. 103-592); 104-417, eff. 8-15-25.)

Sec. 150-5. Definitions

(This Section may contain text from a Public Act with a delayed effective date)

Sec. 150-5. Definitions. 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.

"Authorization" means the process through which a merchant requests approval for an electronic payment transaction from the issuer.

"Clearance" means the process of transmitting final transaction data from a merchant to an issuer for posting to the cardholder's account and the calculation of fees and charges, including interchange fees, that apply to the issuer and the merchant.

"Credit card" means a card, plate, coupon book, or other credit device existing for the purpose of obtaining money, property, labor, or services on credit.

"Debit card" means a card or other payment code or device issued or approved for use through a payment card network to debit an asset account, regardless of the purpose for which the account is established, whether authorization is based on a signature, a personal identification number, or other means. "Debit card" includes a general use prepaid card, as defined in 15 U.S.C. 16931-1. "Debit card" does not include paper checks.

"Electronic payment transaction" means a transaction in which a person uses a debit card, a 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, a personal identification number, or other means.

"Gratuity" means a voluntary monetary contribution 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 a person issuing a debit card or credit card or the issuer's agent.

"Merchant" means a person that collects and remits a tax.

"Payment card network" means an entity that:

(1) directly or through licensed members, processors, or agents, provides the proprietary services, infrastructure, and software to route information and data for the purpose of conducting electronic payment transaction authorization, clearance, and settlement; and

(2) a merchant uses to accept as a form of payment a brand of debit card, credit card, or other device that may be used to carry out electronic payment transactions.

"Person" means any individual, firm, public or private corporation, government, partnership, association, or any other organization or entity.

"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.

"Settlement" means the process of transmitting sales information to the issuing bank for collection and reimbursement of funds to the merchant and calculating and reporting the net transaction amount to the issuer and merchant for an electronic payment transaction that is cleared.

"Tax" means any use and occupation tax or excise tax imposed by the State or a unit of local government in the State.

"Tax documentation" means documentation sufficient for the payment card network to determine the total amount of the electronic payment transaction and the tax or gratuity amount of the transaction. Tax documentation may be related to a single electronic payment transaction or multiple electronic payment transactions aggregated over a period of time. Examples of tax documentation include, but are not limited to, invoices, receipts, journals, ledgers, and tax returns filed with the Department of Revenue or local taxing authorities.

(Source: P.A. 103-592, eff. 7-1-27 (See Section 70 of P.A. 104-532 for the effective date of Article 150 of P.A. 103-592).)

Sec. 150-10. Interchange fees on taxes prohibited

(This Section may contain text from a Public Act with a delayed effective date)

Sec. 150-10. Interchange fees on taxes prohibited.

(a) An issuer, a payment card network, an acquirer bank, or a processor may not receive or charge a merchant any interchange fee on the tax amount or gratuity of an electronic payment transaction if the merchant informs the acquirer bank or its designee of the tax or gratuity amount as part of the authorization or settlement process for the electronic payment transaction. The merchant must transmit the tax or gratuity amount data as part of the authorization or settlement process to avoid being charged interchange fees on the tax or gratuity amount of an electronic payment transaction.

(b) A merchant that does not transmit the tax or gratuity amount data in accordance with this Section may submit tax documentation for the electronic payment transaction to the acquirer bank or its designee no later than 180 days after the date of the electronic payment transaction, and, within 30 days after the merchant submits the necessary tax documentation, the issuer must credit to the merchant the amount of interchange fees charged on the tax or gratuity amount of the electronic payment transaction.

(c) This Section does not create liability for a payment card network regarding the accuracy of the tax or gratuity data reported by the merchant.

(d) It shall be unlawful for an issuer, a payment card network, an acquirer bank, or a processor to alter or manipulate the computation and imposition of interchange fees by increasing the rate or amount of the fees applicable to or imposed upon the portion of a credit or debit card transaction not attributable to taxes or other fees charged to the retailer to circumvent the effect of this Section.

(Source: P.A. 103-592, eff. 7-1-27 (See Section 70 of P.A. 104-532 for the effective date of Article 150 of P.A. 103-592).)

Sec. 150-15. Penalties

(This Section may contain text from a Public Act with a delayed effective date)

Sec. 150-15. Penalties.

(a) An issuer, a payment card network, an acquirer bank, a processor, or other designated entity that has received the tax or gratuity amount data and violates Section 150-10 is subject to a civil penalty of $1,000 per electronic payment transaction, and the issuer must refund the merchant the interchange fee calculated on the tax or gratuity amount relative to the electronic payment transaction.

(b) An entity, other than the merchant, involved in facilitating or processing an electronic payment transaction, including, but not limited to, an issuer, a payment card network, an acquirer bank, a processor, or other designated entity, may not distribute, exchange, transfer, disseminate, or use the electronic payment transaction data except to facilitate or process the electronic payment transaction or as required by law. A violation of this subsection constitutes a violation of the Consumer Fraud and Deceptive Business Practices Act.

(Source: P.A. 103-592, eff. 7-1-27 (See Section 70 of P.A. 104-532 for the effective date of Article 150 of P.A. 103-592).)

Sec. 150-95. Severability

(This Section may contain text from a Public Act with a delayed effective date)

Sec. 150-95. Severability. The provisions of this Act are severable under Section 1.31 of the Statute on Statutes.

(Source: P.A. 103-592, eff. 7-1-27 (See Section 70 of P.A. 104-532 for the effective date of Article 150 of P.A. 103-592).)

Art. 999 ARTICLE 999.

Sec. 999-95. No acceleration or delay

Where this Act makes changes in a statute that is represented in this Act by text that is not yet or no longer in effect (for example, a Section represented by multiple versions), the use of that text does not accelerate or delay the taking effect of (i) the changes made by this Act or (ii) provisions derived from any other Public Act.

(Source: P.A. 103-592, eff. 6-7-24.)

Sec. 999-97. Severability

The provisions of this Act are severable under Section 1.31 of the Statute on Statutes.

(Source: P.A. 103-592, eff. 6-7-24.)

Sec. 999-99. Effective date

This Act takes effect upon becoming law, except that Article 65 takes effect July 1, 2024, Articles 25, 75, 80, 93, 125, 135, and 140 take effect January 1, 2025, and Article 150 takes effect July 1, 2027.

(Source: P.A. 103-592, eff. 6-7-24; 104-4, eff. 6-16-25; 104-532, eff. 6-26-26.)