Electronic Payment Transactions - Interchange Fees - Calculation and Use of Data
SB 917 would regulate how interchange fees are calculated on electronic payment transactions when a purchase includes sales tax or gratuity. The bill allows a merchant to request that the tax or gratuity portion of a card transaction be excluded from the fee calculation by submitting documentation during authorization or settlement. If the documentation is later provided within 180 days, the issuer must credit back the interchange fees charged on the tax and gratuity portion within 30 days. The bill also bars payment card networks, issuers, acquirers, and processors from increasing fees on the non-tax/non-gratuity portion of the transaction to offset the exclusion.
The bill further restricts how electronic payment transaction data may be used by entities other than the merchant. Such data may be used only for processing the transaction, fraud prevention, loyalty or promotional programs, tailoring products and services, or as otherwise required by law. A violation of these data-use restrictions is treated as an unfair, abusive, or deceptive trade practice under Maryland’s Consumer Protection Act, and the bill imposes civil penalties of $1,000 per transaction for failures to exclude tax and gratuity from interchange-fee calculations or to issue required credits.
SB 917 amends Maryland Commercial Law by revising Section 12-1402, adding a new Section 12-1405, and expanding the list of unfair, abusive, or deceptive trade practices in Section 13-301. It creates new obligations for issuers, payment card networks, acquirer banks, and processors in the handling of card transactions that include sales tax or gratuity, and it gives merchants a statutory mechanism to seek fee adjustments and refunds. The bill also adds consumer-protection enforcement consequences for improper use of payment transaction data, bringing those violations within the scope of Title 13 remedies and penalties. The act is scheduled to take effect October 1, 2025.
Based on the bill text and the absence of recorded committee testimony or votes, the available record suggests the measure is primarily a policy and consumer/merchant protection proposal rather than one with documented public controversy in the provided materials. Its structure indicates support for merchants by limiting interchange fees on tax and gratuity amounts and by preventing fee manipulation, while also imposing compliance duties on card-payment intermediaries. The lack of transcripts or voting history means no formal sentiment from committee debate can be identified from the supplied context.
The main points of potential contention are between merchants and the payment-card industry. Merchants are given a right to exclude tax and gratuity from interchange-fee calculations and to recover overcharged fees, while issuers, networks, acquirers, and processors face strict compliance requirements and per-transaction penalties. Another likely area of dispute is the data-use restriction, which limits how transaction data may be shared or used beyond processing, fraud prevention, rewards, and similar purposes. The bill also leaves some operational questions, such as what documentation is sufficient and how systems will verify tax and gratuity amounts, though the bill states that payment card networks are not liable for the accuracy of merchant-reported documentation.