The Fair Swipe Act of 2025 aims to protect local businesses in the District of Columbia 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 do not benefit from the tax and gratuity amounts collected. The bill outlines a process for merchants to submit documentation related to taxes and gratuities to receive credits for any interchange fees charged, and 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 measure is intended to support the recovery and growth of local businesses in a post-pandemic environment by allowing them to retain more of their earnings and navigate the financial challenges posed by transaction fees.