Indiana mandates refunds for excess interchange fees under new civil penalty law

On January 13, 2025, Indiana lawmakers introduced Senate Bill 412, aimed at regulating interchange fees charged by payment card networks. The bill seeks to address concerns from merchants regarding excessive fees that can impact their profitability.

The primary provisions of Senate Bill 412 include the establishment of a civil penalty for violations, which could reach up to $1,000 per incident. Additionally, the bill mandates that any merchant affected by these violations must be refunded the excess interchange fees collected. This move is designed to protect small businesses from what many consider unfair financial practices by large payment networks.

Notably, the bill also targets deceptive practices by payment card networks. If a network alters the computation or imposition of interchange fees to circumvent the bill's requirements, it would be classified as a deceptive act. Enforcement would fall under the jurisdiction of the Indiana Attorney General, who would be responsible for taking action against such violations.

The introduction of Senate Bill 412 has sparked discussions among lawmakers and stakeholders. Supporters argue that the bill is a necessary step to ensure fair treatment for merchants, while opponents raise concerns about potential unintended consequences, such as increased costs for consumers or complications in payment processing.

The implications of this legislation could be significant for Indiana's business landscape. If passed, it may lead to a reevaluation of how payment card networks operate within the state, potentially influencing similar legislative efforts in other regions. As the bill progresses through the legislative process, its future will depend on ongoing debates and the responses from both the business community and consumer advocates.