Originally scheduled for 1 July 2025, this measure will now be delayed by one year, with the effective date set for 1 July 2026.
This delay follows legislative approval of a brief amendment passed over the weekend. Despite not yet confirming his stance, the governor’s alignment with the Democratic legislature suggests he is likely to support it.
The law, known as the Interchange Fee Prohibition Act, was enacted in 2023 and has been backed by restaurant and retail industry groups aiming to reduce costs associated with card-based payments. Merchants have long argued that paying fees on amounts collected for taxes and gratuities unfairly increases their expenses.
Industry opposition and legal challenges
Opponents from the banking and payments sectors welcomed this delay, with industry associations such as the Electronic Transactions Association (ETA) and the Electronic Payments Coalition supporting the amendment. According to representatives from the ETA, the postponement provides additional time to resolve potential legal disputes that could ultimately lead to the law’s repeal.
Legal opposition remains ongoing. In August 2024, several financial trade groups, including the Illinois Bankers Association and the American Bankers Association, filed a lawsuit in federal court aiming to overturn the legislation. A US District Court judge issued a preliminary injunction in December that temporarily blocks enforcement of the law for national and out-of-state banks and federal savings associations.
This means most card transactions within the state are not currently subject to the statute. Officials from the ETA assert that if only part of the law is upheld, it could place Illinois-chartered financial institutions at a competitive disadvantage, an outcome they claim was not intended by the state legislature.
