Prohibits the charging of interchange fees on taxes and gratuities.

RI Bill Summary: Interchange Fees on Taxes and Gratuities

This bill would prohibit banks and payment card networks (like Visa or Mastercard) from charging interchange fees on the portion of a transaction that represents sales taxes or tips (gratuities). Interchange fees are the small percentage-based fees that businesses pay to card networks and banks every time a customer pays with a credit or debit card. Currently, these fees are calculated on the total transaction amount, which means businesses end up paying a fee not just on the price of goods or services, but also on the tax and tip portions of the bill.

The bill would require that interchange fees only apply to the base purchase price — not the tax or gratuity added on top. This matters because businesses have no real control over sales tax rates (set by the government) and often have limited influence over tips, yet they currently pay fees on those amounts as if they were revenue.

Who this affects most directly are businesses — particularly restaurants, retailers, and service providers — who accept card payments and currently absorb these extra costs. If passed, it could reduce their operating expenses. Card networks and banks would see a reduction in the fees they collect. Consumers might indirectly benefit if businesses pass on the savings, though that is not guaranteed.

The bill was referred to the Senate Commerce Committee, which has recommended it be held for further study, meaning it is not moving forward immediately and may be revisited at a future hearing.