New York S 5558: Enacts the interchange fee prohibition act

Bill Text

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S05558 Summary:

BILL NOS05558 

&nbsp

SAME ASSAME AS A06603

&nbsp

SPONSORCOONEY

&nbsp

COSPNSR

&nbsp

MLTSPNSR

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Add Art 42-A §§1200 - 1202, Gen Bus L

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Enacts the "interchange fee prohibition act"; prohibits the receipt or charge of interchange fees on the tax amount or gratuity of an electronic payment transaction if the merchant informs the acquirer bank or its designee of the tax or gratuity amount as part of the authorization or settlement process for the electronic payment transaction; establishes penalties.

Go to top S05558 Actions:

BILL NOS05558 

&nbsp

02/25/2025REFERRED TO CONSUMER PROTECTION

01/07/2026REFERRED TO CONSUMER PROTECTION

Go to topS05558 Committee&nbspVotes:

Go to topS05558 Floor&nbspVotes:

There are no Assembly votes for this bill in this legislative session.

Go to topS05558 Text:

 STATE OF NEW YORK
 ________________________________________________________________________

 5558

 2025-2026 Regular Sessions

 IN SENATE

 February 25, 2025
 ___________

 Introduced by Sen. COONEY -- read twice and ordered printed, and when
 printed to be committed to the Committee on Consumer Protection

 AN ACT to amend the general business law, in relation to enacting the
 "interchange fee prohibition act"

 The People of the State of New York, represented in Senate and Assem-
 bly, do enact as follows:

 1 Section 1. Short title. This act shall be known and may be cited as
 2 the "interchange fee prohibition act".
 3 § 2. The general business law is amended by adding a new article 42-A
 4 to read as follows:
 5 ARTICLE 42-A
 6 INTERCHANGE FEE PROHIBITION ACT
 7 Section 1200. Definitions.
 8 1201. Interchange fees on taxes prohibited.
 9 1202. Penalties.
 10 § 1200. Definitions. For the purposes of this article, the following
 11 terms shall have the following meanings:
 12 1. "acquirer bank" means a member of a payment card network that
 13 contracts with a merchant for the settlement of electronic payment tran-
 14 sactions. An acquirer bank may contract directly with merchants or indi-
 15 rectly through a processor to process electronic payment transactions;
 16 2. "authorization" means the process through which a merchant requests
 17 approval for an electronic payment transaction from the issuer;
 18 3. "clearance" means the process of transmitting final transaction
 19 data from a merchant to an issuer for posting to the cardholder's
 20 account and the calculation of fees and charges, including interchange
 21 fees, that apply to the issuer and the merchant;
 22 4. "credit card" means a card, plate, coupon book, or other credit
 23 device existing for the purpose of obtaining money, property, labor, or
 24 services on credit;

 EXPLANATION--Matter in italics (underscored) is new; matter in brackets
 [ ] is old law to be omitted.
 LBD08851-01-5

 S. 5558 2

 1 5. "debit card" means a card or other payment code or device issued or
 2 approved for use through a payment card network to debit an asset
 3 account, regardless of the purpose for which the account is established,
 4 whether authorization is based on a signature, a personal identification
 5 number, or other means. "Debit card" includes a general use prepaid
 6 card, as defined in 15 U.S.C. 16931-1. "Debit card" shall not include
 7 paper checks;
 8 6. "electronic payment transaction" means a transaction in which a
 9 person uses a debit card, a credit card, or other payment code or device
 10 issued or approved through a payment card network to debit a deposit
 11 account or use a line of credit, whether authorization is based on a
 12 signature, a personal identification number, or other means;
 13 7. "gratuity" means a voluntary monetary contribution to an employee
 14 from a guest, patron, or customer in connection with services rendered;
 15 8. "interchange fee" means a fee established, charged, or received by
 16 a payment card network for the purpose of compensating the issuer for
 17 its involvement in an electronic payment transaction;
 18 9. "issuer" means a person issuing a debit card or credit card or the
 19 issuer's agent;
 20 10. "merchant" means a person that collects and remits a tax;
 21 11. "payment card network" means an entity that:
 22 (a) directly or through licensed members, processors, or agents,
 23 provides the proprietary services, in