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New Pennsylvania Credit Card Legislation Costly for Small Businesses, Burdensome for Consumers

| Electronic Payments Coalition

Consumers lose, small businesses pay the price so corporate mega-stores can pocket more of your money

Date: June 10, 2024
Media Contact:
Nick Simpson

WASHINGTON, DC — The Electronic Payments Coalition today warned that newly introduced legislation in the Pennsylvania House of Representative would make the commonwealth a global outlier in its treatment of electronic payments businesses and consumers rely on every day. The measure (H.B. 2394) would prohibit financial institutions from collecting interchange on the sales tax portion of credit and debit card transactions. Interchange is the card acceptance cost merchants pay for transmitting payments electronically.

“This draconian provision could require businesses to pass along details about every consumer purchase, force new costs on small businesses and not benefit the commonwealth one iota,” EPC Executive Chairman Richard Hunt said. “What it will do, however, is jeopardize the secure, convenient card payment systems used by Pennsylvania families and small businesses, just to line the pockets of corporate mega-stores. We have seen the buyer’s remorse from similar provisions in Illinois. Pennsylvania politicians should not follow their example.”

This fundamentally flawed proposal is similar to a backroom deal slipped into Illinois’ budget and passed over Memorial Day Weekend. The Illinois proposal is set to take effect in July 2025. To date no other state in the nation or country around the world has ever implemented such a program because of the technical hurdles, costs to small businesses and consumer privacy concerns involved. The Chicago Tribune called in an editorial for a repeal of the provision to avoid “credit card chaos in Illinois.”

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