The Illinois Interchange Fee Prohibition Act exempts merchants in the state from paying interchange on sales tax and gratuities levied on credit and debit card transactions. Interchange is the fee merchants pay to processors on card transactions, typically a percentage of the transaction. The lawsuit was brought by the Illinois Bankers Association, The American Bankers Association, the Illinois Credit Union League, and America’s Credit Unions, formerly the National Association of Federally-Insured Credit Unions.
I’ve always wondered why restaurants and retailers had to pay credit card fees on money they didn’t keep: taxes and tips. Taxes are forwarded to the taxing bodies and tips go to the worker – so the restaurant, salon or retailer ends up paying fees on money they pass through, thereby lowering their net income.
In that they are segregated on the bill I don’t believe it would be a great hardship on credit card processors to exclude those items from interchange fees.
A largely unasked question is becoming glaring: Is Illinois doing all it should to use artificial intelligence to make government cost less and work better? So far, the evidence says no.
I’ve always wondered why restaurants and retailers had to pay credit card fees on money they didn’t keep: taxes and tips. Taxes are forwarded to the taxing bodies and tips go to the worker – so the restaurant, salon or retailer ends up paying fees on money they pass through, thereby lowering their net income.
In that they are segregated on the bill I don’t believe it would be a great hardship on credit card processors to exclude those items from interchange fees.
Another known disaster but went full speed again.