There’s a legal, regulatory and political assault on the payments industry and its freedom to set prices in the market, at the global level, at the national level, and as Illinois’s Interchange Fee Prohibition Act (IFPA) signed into law June 7, 2024 highlights, at the state level.
The U.S. payment system works extraordinarily well for consumers, businesses, and banks. Consumers take it for granted. The Illinois legislature’s ill-considered IFPA throws a monkey wrench in the works. It imposes price controls on payment networks’ interchange fees, substituting politicians’ judgement of the best price, for the market’s. Effective July 1, 2025, it bans interchange fees on sales tax and gratuities and prohibits the use of “associated data” for purposes other than processing payment transactions.
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