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August 12, 2024 • Issue 24:08:01

Advisory Board
Advisory Board

Navigating the repercussions of

scattered state laws – Part 1

Following is a portion of the answers we received.

Mark Dunn
Field Guide Enterprises LLC

1. In speaking from my consulting role for agents and
small to medium-sized ISOs, the Illinois statute will
most likely pose difficulties in compliance for ISOs
with Illinois merchant clients.

Agents and ISOs in their sales roles supply entries on
merchant processing applications that convey rates and
fees. For most agents and ISOs these rates and fees are
interchange plus—meaning they are additions to the
new law in Illinois, effective July 2025, prohib- interchange fees, dues and assessments that the card
its interchange assessments on sales taxes and brands and their sponsor banks designate.
gratuities, and legislation pending in at least
A four other states would impose similar prohibi- The agents and ISOs have no control over these inter-
tions. Given the adjustments this will require of merchants change fees, dues and assessments. They are wholly
and payment processors, we asked members of The Green reliant on the card brands to calculate and apply these
Sheet Advisory Board the following questions: rates and fees. If there are exceptions or variations for
1. What are the immediate and long-term effects of scat- merchants in particular states, the card brands and
tered state laws likely to be on stakeholders such as their sponsor banks will have to calculate and apply
merchants, consumers, your business and/or the pay- the proper rates and fees. The agents and ISOs should
ments industry as a whole? not be liable for compliance.
2. Is complying with the Illinois bill and similar legis-
lation in other states feasible? If not, why not? If so,
what will service providers need to do to help mer- Contributed articles inside by:
chants comply?
Allen Kopelman .....................................................................................14
3. It appears lawmakers are well-intentioned in draft-
ing legislation that attempts to ensure merchants Elie Y. Katz ...............................................................................................16
aren't gouged by growing payment-acceptance costs. Dr. Sophie Harbisher ...........................................................................25
Could legislators have a more effective approach to
legislation that affects the payments industry? And Ken Musante ..........................................................................................28
how might payment professionals work with them?

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