Prohibits credit and debit card interchange fees in certain circumstances.
Assembly Bill 5008 would restrict how payment card networks calculate interchange fees on credit and debit card transactions in New Jersey. In general, the bill bars interchange fees that are based on the full gross amount of a transaction when that amount includes sales tax or gratuity, and it also prohibits attempts to work around that rule by shifting fees onto the non-tax, non-tip portion of the transaction. The bill further addresses certain charitable or political contributions made by card, capping interchange fees on those transactions at 0.2% for debit card contributions and 0.3% for credit card contributions when the network knows or should know the fee has been used by other issuers in the current or prior calendar year.
The bill requires payment card networks to either exclude tax and gratuity from interchange calculations at settlement or rebate the merchant the difference within 30 days. If a merchant cannot transmit tax information at settlement, the merchant may later submit documentation within 180 days and receive a corresponding credit. The measure also defines key terms such as merchant, issuer, processor, payment card network, tax, gratuity, and eligible contribution, and it applies to transactions involving taxes imposed under New Jersey sales, motor fuel, and petroleum-related tax laws, as well as certain federal excise taxes.
If enacted, the bill would amend New Jersey consumer protection law by adding new restrictions and enforcement mechanisms governing card-network fee practices. Violations would expose payment card networks to civil penalties of up to $1,000 per violation, refund obligations for improperly collected fees, and potential injunctive relief and restitution actions brought by the Attorney General. The bill would therefore affect payment card networks, issuers, processors, merchants, and ultimately consumers and charitable or political donors who use debit or credit cards.
The available context shows no recorded committee transcript, vote, or formal action history, so there is no documented legislative debate or recorded sentiment from hearings. Based on the bill text alone, the measure appears aimed at reducing merchant costs and preventing fees from being charged on amounts that are not part of the merchant’s revenue, such as taxes and tips. The absence of opposition or vote data means any broader political sentiment cannot be confirmed from the provided record.
The main point of potential contention is likely the impact on payment card networks and issuers, which would lose fee revenue and face new compliance obligations. Merchants and consumer-facing businesses would likely support the bill because it could lower processing costs, while card networks may argue that the restrictions complicate settlement systems and fee structures. The special treatment for eligible contributions may also raise questions about how broadly the fee caps apply and how networks would identify and implement those limits in practice.
The bill would supplement New Jersey consumer fraud and related commercial law by prohibiting certain interchange fee practices for debit and credit card transactions. It would require card networks to exclude taxes and gratuities from the fee base or later rebate the difference, cap interchange fees on certain eligible contributions, and authorize civil penalties, refunds, and Attorney General enforcement. The practical effect would be to shift card-processing costs away from merchants on the tax and tip portions of transactions and impose new compliance duties on payment card networks, issuers, processors, and acquirers.
No committee testimony, recorded votes, or other legislative history was provided, so there is no direct evidence of support or opposition from lawmakers in the available record. The bill’s structure suggests a consumer- and merchant-friendly policy goal: limiting fees on amounts that are not retained by the merchant and reducing processing costs. At the same time, the bill would impose new operational and financial burdens on payment card networks, which is the most likely source of resistance.
The likely controversy centers on whether payment card networks should be allowed to assess interchange fees on the full transaction amount, including taxes and gratuities, and whether the state should regulate fee calculation methods at all. Merchants and business groups would likely favor the bill because it could lower card acceptance costs, while card networks, issuers, and processors may object to revenue loss, settlement changes, and the administrative burden of tracking tax and gratuity amounts. The contribution-related fee cap could also be contentious because it extends the bill beyond ordinary retail transactions into political or charitable giving, where payment processing rules may be more complex.