Lawmakers hear hours of testimony on bill to limit interchange fees on taxes, tips and donations

Rep. Schonk Wyler introduced House Bill 12 15 as a targeted measure to reduce the application of interchange fees — commonly called "swipe" fees — to taxes, regulatory fees and gratuities, and to cap fees applied to charitable donations. She said the bill focuses on large national networks and card issuers and is intended to protect merchants, charities and consumers while preserving payment security and choice.

Several groups and business owners testified in support. Sam Sneidman of United Way of Central Indiana said many nonprofits increasingly receive donations by card and that fees divert funds from missions; he told the committee some partners see 60–80% of giving done via card and said caps proposed in the bill would return significant dollars to grantees. Patrick Tam of the Indiana Restaurant & Lodging Association described interchange as a "top three" cost for restaurants and hotels and offered state-level estimates — including a testimony figure of about $46,500,000 in interchange on certain restaurant categories — that he said demonstrate the burden on local operators.

Small-business testimony included Rep. Joanna King, who spoke from experience as a small-business owner and said her company pays more than $100,000 per year in credit-card fees; King argued state action is warranted when federal solutions lag. Nick Stanley, a convenience-store owner and incoming president of the Indiana Food & Fuel Association, described rising chargebacks and disputes and testified his eight-store chain paid roughly $850,000 in interchange fees last year.

Speakers opposing parts of the bill cautioned about complexity and unintended consequences. Chris Beaumont of the Indiana Credit Union League said the bill’s drafting would affect small banks and credit unions and raised concerns that blanket exclusions could apply to tax-exempt products; Beaumont also cited litigation over a similar Illinois measure and warned of federal preemption for nationally regulated institutions. Connor Wong of the Indiana Bankers Association said interchange fees fund fraud prevention, guaranteed payment and settlement services; he warned the bill could fragment the uniform payment system, confuse consumers and impose material technology and settlement costs on merchants and financial institutions.

Committee members questioned witnesses about dispute processes, card-not-present fraud risk, whether merchants could pass costs to consumers, and litigation in other states. Members heard a range of anecdotal and analyzed estimates but did not take a vote; the chair noted HB 12 15 was listed "hearing only" and encouraged continued discussion with stakeholders through the interim.