The proposed bill amends Title 6 of the General Laws by adding a new chapter, CHAPTER 26.2, which specifically addresses interchange fees related to electronic payment transactions. It defines key terms such as "acquirer bank," "authorization," "interchange fee," and "merchant," among others. The bill prohibits issuers, payment card networks, acquirer banks, and processors from charging merchants any interchange fees on the tax or gratuity amounts of electronic payment transactions, provided that the merchant informs the acquirer bank of these amounts during the authorization or settlement process. If a merchant fails to transmit this data, they can submit documentation within 180 days to receive a credit for the interchange fees charged.

Additionally, the bill establishes penalties for violations, imposing a civil penalty of $1,000 per transaction for entities that do not comply with the provisions. It also ensures that the computation of interchange fees cannot be manipulated to circumvent the prohibition on charging fees for taxes and gratuities. The act is set to take effect on January 1, 2026.