Springfield, IL (CAPITOL CITY NOW) – Interchange fees have been a nuisance to many retailers. However, in a recent court ruling, the Interchange Fee Prohibition Act was ruled into place.

Set to take effect July 1 of this year, the Interchange Fee Prohibition Act will prevent credit card companies and processors from adding additional fees to things such as sales taxes, or tips that are given to servers or bartenders electronically.

For example, prior to the act, when you pay your bill at the restaurant you are eating at, there’s usually a line on the receipt where you put the tip amount, those tips paid out from your credit or debit card are subject to taxes and fees. The Interchange Fee Prohibition Act would prevent those taxes and fees, so the one being tipped can get the full tip amount.

However, the Interchange Fee Prohibition Act will not affect the fees placed on a product or service provided by a company. But this change still is a big help with those local main street merchants.

Rob Karr, CEO of the Illinois Retail Merchants Association (IRMA), and recent guest on the WTAX Morning Newswatch spoke about some of the benefits of this act.

“This would represent the largest relief, typically for main street retailers, probably in Illinois history,” Karr stated.

Karr also stated that the banks and card companies are trying to appeal, however. The banks also attempted and failed with an appeal back in 2025.

“The credit card companies and the banks have already indicated that they are going to appeal, which we fully expected them to do. But the judge’s decision was extraordinarily comprehensive. So, we will look forward to seeing what the appeals court does, the appeals court could put a stay in place, or they could allow the law to go into effect while even while the case is appealed. So, we will just have to see what the credit card companies and the banks file, and what the appellate court says. ” Karr also stated.