Prohibits the charging of swipe fees on taxes and gratuities.

Plain-English Summary: RI Bill on Swipe Fees for Taxes and Tips

When you pay for something with a credit or debit card, the business gets charged a small processing fee by the card company — often called a "swipe fee" or "interchange fee." Currently, this fee is typically calculated based on the entire transaction amount, which means card companies collect a fee not just on the purchase price, but also on the sales tax and any tip you leave. This Rhode Island bill would prohibit that practice, making it illegal for payment card companies to charge swipe fees on the portions of a transaction that represent taxes and gratuities.

This bill would most directly affect businesses — especially restaurants, service providers, and retailers — who currently pay swipe fees on the full transaction total. By removing taxes and tips from the calculation, businesses would pay slightly lower processing fees on each card transaction. It could also benefit service workers, since the full amount of a tip they earn would no longer be reduced by card processing costs before it reaches them or the business.

For everyday consumers, the change would likely be invisible at checkout, but it could indirectly benefit them if businesses pass along their savings. The bill is currently in the early stages of the legislative process — it has been introduced and referred to the House Corporations Committee, which has recommended holding it for further study before taking action.