New Jersey is now set to revolutionize credit card equity by enforcing radical swipe fee transparency law. The state’s recent legislation, now in effect, restricts businesses from passing excessive “swipe fees” onto consumers, aligning with trends already tackled by other states and currently pending in Congress.
The law mandates that merchants can only levy customers the precise swipe fee cost they bear while interacting with banks and credit card networks. Essential to this change, businesses are obligated to divulge surcharge amounts to customers before checkout, fostering a fair transaction environment.
In a statement after signing the legislation into law, Governor Phil Murphy underlined the importance of transparency, particularly for lower-income families facing affordability hurdles and said, “All residents and visitors doing business in New Jersey deserve the utmost transparency with respect to their transactions, especially given the affordability challenges experienced by our low- and moderate-income families.”
These swipe fees, averaging around 2% according to the National Retail Federation, have been a controversial topic, setting financial giants Visa and Mastercard against retailers led by the Merchant Payments Coalition. So the legislation steps ahead to balance this scale.
Highlighting the significance of the law, state senator Gordon Johnson, a sponsor of the legislation, said, “This law will ensure that sellers are only passing on the processing fees. He also acknowledged the decline of cash usage and the need to prevent businesses from exploiting this shift.
Dana Lancellotti, CEO of the NJ Restaurant and Hospitality Association, endorsed the law as a means to neutralize fees without profiteering. Nationally, there’s also a push for federal legislation to foster competition among credit card processing companies. The proposed bipartisan Senate bill aims to ensure that major card-issuing banks offer multiple processing networks, a move that could potentially lead to reduced fees for businesses and consumers alike.