Originally planned for July 1, 2025, the effective date is now pushed back by one year to July 1, 2026.
Following legislative approval of a minor amendment passed over the weekend in both chambers, the measure was postponed. Despite the state governor not yet confirming his stance on the amended bill, given that both branches are under Democratic control, support seems likely.
The Interchange Fee Prohibition Act, established in 2023 and supported by restaurant and retail industry groups, aims to lower costs associated with card-based payments. Merchants have long complained about higher expenses resulting from paying fees on amounts collected for taxes and gratuities.
The delay was welcomed by the banking and payment sectors.
Industry associations like the Electronic Transactions Association (ETA) and the Electronic Payments Coalition publicly endorsed the extended timeline, noting it provides more time to address potential legal challenges that could result in the law’s repeal.
Legal opposition against the legislation continues. In August 2024, several financial trade groups, including the Illinois Bankers Association and the American Bankers Association, filed a lawsuit in federal court seeking to overturn the statute. A preliminary injunction issued by an Illinois District Court judge in December temporarily blocks enforcement of the law for national and out-of-state banks as well as federal savings associations.
Officials from the ETA argue that if only part of the law is upheld, it could place Illinois-chartered financial institutions at a competitive disadvantage—a result they say was not intended by the state legislature.