to ban banks and credit card companies from charging retailers a seemingly small fee on sales taxes and tips., financial institutions that opposed the measure have ratcheted up their opposition and amplified their rhetoric, saying the move isn’t just bad for them but will also cause headaches for consumers.running online ads
Credit card companies and financial institutions currently charge the retailers and restaurants a fee when consumers use cards, based on the total transaction amount of the goods, tax and any tip. The new law would bar the financial institutions from charging the so-called interchange fees on the tax or gratuity portions of customers’ bills, with the goal being to lower the amount that credit card companies can charge retailers.
Ads paid for by the Electronic Payments Coalition, a national trade association for credit card companies and other financial institutions, warn of inconveniences to customers from a new Illinois law regulating credit card fees. The coalition began running the ads, like this one, last week, as part of a six-figure campaign blitz.
In addition to the banks and credit card companies being generally opposed to the law, one of their bigger sticking points is that companies must overhaul their systems by July 2025 to comply. That means Illinois would be the first state to require a distinction on consumer retail transactions between goods, taxes and tips, creating the need for a complicated software change, the groups say.
“Unless there are serious efforts to repeal this new law, issuing banks and credit unions will be forced to inform some 7 million Illinois card holders of the changes required by Illinois’ new law as the effective date approaches,” Rauschenberger said, adding: “I would expect we will hear an outcry.”
“If it’s not broken, why fix it?” asked Alex Cabrera, the owner of Lalo’s Restaurant on Maxwell Street just east of Halsted Street.Business owners in Chicago so far know little about how the change would be implemented, Jose Garcia, president of Northwest Community Credit Union and a member of the Illinois Credit Union League Board of Directors, added in a joint interview with Cabrera.
American Airlines, Southwest Airlines and United Airlines, which each operate their own credit card programs, last month also sent a letter to Pritzker and legislative leaders asking them to reject the proposal.
Source: News Formal (newsformal.com)
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