Illinois Lawmakers Delay Swipe Fee Ban on Tips, Taxes Until 2026

Illinois lawmakers have voted to delay the implementation of the Illinois Interchange Fee Prohibition Act, which bans credit card swipe fees on sales taxes and tips, from July 2025 to July 2026 amid ongoing legal challenges by banks. The law, signed by Gov. JB Pritzker, was designed to prevent banks and credit card companies from charging fees on non-revenue sources like tips and taxes, aiming to reduce costs for retailers and consumers. Banks and credit card issuers argue that the technology needed to comply with the law is not yet available and that the law could impose significant costs and operational challenges, including the potential need for multiple transactions per purchase. Retailers and business groups support the law, asserting that delaying its implementation prolongs the financial burden on consumers and small businesses caused by these fees. The delay followed a legislative vote and now awaits the governor's signature, while the legal battle over the law's validity continues. The dispute highlights the tension between financial institutions concerned about compliance costs and businesses advocating for relief from fees that increase consumer prices.