The Illinois General Assembly has once again delayed implementation of the state’s controversial Interchange Fee Prohibition Act, pushing the effective date from July 1, 2026, to July 1, 2027.
The delay was included in Senate Bill 3645, which passed the General Assembly in May and is currently awaiting action by the Governor. It marks the second time lawmakers have delayed the law’s effective date after previously moving implementation to July 1, 2026.
The Interchange Fee Prohibition Act prohibits interchange fees from being charged on the tax and tip portion of credit and debit card transactions. However, since its passage, the law has faced ongoing questions about how it would be carried out in practice by businesses, financial institutions, and payment processors.
Critics say the lack of clarity could create complications at checkout, particularly for businesses that rely on existing payment systems that are not designed to separate taxes and tips from the total transaction amount. There are also concerns about how the law could impact small businesses, workers who rely on tips, and whether businesses would need to adopt new systems or processes to comply.
The law is also the subject of ongoing litigation in federal court, which could ultimately determine whether, when, or how portions of the Act are implemented.
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