The Future of Credit Card Fees in Illinois: Insights on the Interchange Fee Prohibition Act

The State of Illinois is one of only ten (10) states in our nation that maintains a full-time legislature, meaning that our state elected officials meet throughout the year. While legislators are mainly in their home districts now, conducting forums and meeting one on one with constituents, they continue working on legislation including bills that passed both houses.

One such provision that has been signed into law but may require further scrutiny between now and the November veto session is the Interchange Fee Prohibition Act (IFPA) that was passed as a part of the state’s 2025 Revenue package. The outcomes of this Act, introduced and supported by the Illinois Retail Merchants Association, affect those businesses which allow for goods and services to be paid via the use of a credit card.

Here’s what we know so far –

  • Interchange fees will be banned on taxes and gratuities when a credit card is used in a transaction.
  • The law prohibits card companies from altering the calculation of their fees to raise rates in other areas to bypass the effects of the law.
  • IPFA provisions allow merchants without advanced POS systems to obtain a credit for interchange fees when tax or gratuity amounts are not separately submitted.
  • Fines of $1,000 per transaction will be enforced on credit card providers that do not comply.
  • The IFPA goes into effect July 1, 2025.

In the days following the adoption of the full budget, concerns on how this program would be implemented began to surface as Illinois becomes the first state in the nation to pass this type of legislation.  What’s the process? What will it cost? Will both businesses and consumers be burdened when completing a credit card transaction? What are the unintended consequences to all parties involved? Numerous unknowns have begun to surface and credit card companies, financial institutions, and even airlines are voicing their opposition and various media outlets have called for a repeal of the Act.

State legislators have advised that concerns from all corners will be reviewed and changes to the Act may be made. That’s where you come into play.

The NACC encourages feedback from our members regarding the implementation of the IFPA. Please share any concerns and/or support for the Act so it can be passed on to our area elected officials. Please contact the NACC Government Affairs Manager, Nadine Scodro at or 630- 352-0461. We value your opinion and insights.

For more extensive details concerning IFPA, click here.

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