The Fair Swipe Act of 2025 aims to alleviate the financial burden on local businesses by prohibiting the charging of interchange fees on the sales tax and gratuity portions of credit and debit card transactions. This legislation recognizes that these fees, which typically range from 2-4% per transaction, unfairly reduce the profits of merchants, as they are charged on amounts that do not contribute to the business's revenue. The bill outlines a process for merchants to submit documentation related to taxes and gratuities to receive credits for any interchange fees charged, and it imposes a civil penalty of $1,000 for violations of this prohibition.

Additionally, the bill includes a non-severability clause, ensuring that if any part of the legislation is deemed unconstitutional or invalid, the entire act will be considered invalid. This comprehensive approach is designed to support the recovery and growth of local businesses in the District, particularly in the wake of challenges posed by the pandemic, by allowing them to retain more of their earnings and continue to thrive in a competitive environment.