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SB 768

AN ACT RELATING TO COMMERCIAL LAW--GENERAL REGULATORY PROVISIONS -- INTERCHANGE FEE RESTRICTION ACT

2025 Regular Session Introduced by John Burke and 3 co-sponsors

SB 768 would cap credit and debit card interchange fees in Rhode Island, reducing merchant costs but potentially eliminating cardholder rewards and triggering banking industry legal challenges.

03/25/2025 Committee recommended measure be held for further study
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Bill Summary · SB 768

Legislative bill overview

SB 768 would restrict interchange fees—the charges that merchants pay to card networks and banks when customers use credit or debit cards. The bill aims to cap these fees at a percentage of the transaction value, similar to regulations already in place in some other jurisdictions. The measure was introduced in Rhode Island's Senate and referred to the Commerce Committee in March 2025.

Why is this important

Interchange fees currently represent a significant operating cost for small and large retailers, ultimately affecting consumer prices and business profitability. Restricting these fees could lower costs for merchants and potentially reduce prices for consumers, but could also affect the rewards programs and consumer protections that card companies fund through these fee revenues. The outcome would reshape the financial relationship between retailers, payment processors, and financial institutions in Rhode Island.

Potential points of contention

  • Impact on payment incentives: Capping interchange fees may reduce card issuer revenues, potentially leading to elimination or reduction of cashback rewards, airline miles, and other cardholder benefits that currently rely on these fees
  • Banking sector opposition: National banks and card networks typically oppose interchange restrictions, arguing they limit competition and innovation in payment processing
  • Merchant benefit distribution: While large retailers benefit significantly from fee reductions, small merchants may see minimal savings if costs aren't proportionally passed through, raising questions about equitable impact
  • Regulatory authority: Federal laws currently govern interchange fees; state-level restrictions may face legal challenges regarding their enforceability and constitutionality

Compiled from official sources — confirm details with the bill’s official record.

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