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NewsBriefs

Sen. Durbin enters the fray over
Illinois interchange law

Senator Richard Durbin, D-Ill., refutes claims that Il-
linois' Interchange Fee Prohibition Act (IFPA), which
exempts sales tax and gratuities from interchange fees,
conflicts with the Durbin Amendment, part of the 2010
Dodd-Frank Act. The Durbin Amendment empowers
the Federal Reserve to cap debit card interchange fees
for large banks. Trade groups representing financial
institutions, including the Illinois Bankers Association
and the American Bankers Association, filed a lawsuit
to overturn the IFPA, claiming it interferes with federal
regulations on debit card interchange.

In an amicus brief, Senator Durbin argued that the
IFPA aligns with the Durbin Amendment’s purpose, as
both regulate price-fixed fees charged by networks on
behalf of debit card issuers. Durbin emphasized that
the IFPA is consistent with sound policy, protecting
merchants and consumers from excessive fees.

Durbin's focus on interchange fees extends beyond
debit cards. He also supports the Credit Card Compe-
tition Act, which would require financial institutions
with over $100 billion in assets to offer credit card pro-
cessing over networks other than Visa and Mastercard,
such as Pulse, Star, NYCE or Shazam.

Toast’s price hike sparks mixed
reactions among restaurateurs

Toast, a restaurant management system and POS pro-
vider, raised processing fees for small and midsize cli-
ents in September 2024, marking its first fee increase in
12 years. The fee adjustment, impacting a limited num-
ber of clients, ranges from 0.05 to 0.23 percent, or less
than a penny per $1 transaction.

Toast attributed the increase to rising costs and an-
nounced an expansion of its surcharge feature, which
enables restaurants to pass credit card processing fees
onto customers.

The fee hike has drawn mixed reactions from the
restaurant community. Toast emphasized that only a
small portion of its 120,000 clients were affected and
that analysts believe the increase won’t significantly
affect customer retention due to the surcharge feature.

However, some restaurant owners, like Kathi Turner of
Turner Seafood Corp., voiced concerns over the lack of
choice, recalling previous fee increases, such as Toast’s
retracted 99-cent fee on online orders in 2023, which
led to CEO Chris Comparato's resignation. Current
CEO Aman Narang faces a delicate balance, managing
client loyalty while seeking revenue growth.

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