Interchange Fees

Interchange Fees (SB 126)                                                                      
Sen. Billy Hickman, R-Statesboro
Hearing held in Senate Banking and Financial Institutions on Feb-21
Interchange fees are paid by retailers to facilitate electronic payments made by customers using credit and debit cards.  Currently, interchange fees are calculated on the final purchase amount.  SB 126 prohibits interchange fees from being assessed on the sales tax portion of these transactions.  Point-of-sale systems are not currently programmed to accommodate this requirement and such a wholesale change should be pursued at the federal level, rather than state-by-state.  Proponents of the bill include the NFIB and retailers like Home Depot and RaceTrac. 
 
Proponents of the bill are arguing that the interchange fee on the sales tax portion of the transaction is a tax on a tax.  Bankers and those in opposition to the bill are arguing that no tax is being eliminated.  Retailers are wanting banks to process their debit and credit cards but not pay for the service through interchange on the sales tax portion.  In essence, this would be asking one industry to provide a service for free to another industry. 
 
On February 28, the Senate Banking and Financial Institutions Committee held a second hearing to allow for additional public comment.  Chairman Carden Summers remained committed to a “hearing only” and not allowing a vote because of the number of questions that remain on the bill.  The following day was the final opportunity for Senate bills to move out of committee to considered for Crossover Day on March 6. 
 
As a result, SB 126 is lost as a standalone measure this year.  Your Government Affairs team will remain vigilant as the session moves past Crossover should proponents attempt to incorporate interchange fee language in an unrelated measure.

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CBA applauds the Senate Banking and Financial Services Committee for allowing for additional public comment without holding a vote.  To listen to the hearing, click here.

2/28/23 - Committee on Banking & Financial Institutions from Georgia State Senate on Vimeo.