The proposed bill introduces the "Interchange Fee Restriction Act" as a new chapter in Title 6 of the General Laws, specifically aimed at regulating interchange fees associated with electronic payment transactions. It defines key terms such as "acquirer bank," "issuer," "merchant," and "interchange fee," among others, to establish a clear framework for the legislation. The bill prohibits issuers, payment card networks, acquirer banks, or processors from charging merchants interchange fees on the tax amount of electronic payment transactions, provided that the merchant informs the acquirer bank of the tax amount during the authorization or settlement process. If a merchant fails to transmit this tax data, they can submit tax documentation within 180 days to receive a credit for the interchange fees charged on the tax amount.

Additionally, the bill outlines penalties for violations of these provisions, categorizing such actions as deceptive trade practices. Entities that violate the interchange fee restrictions may face civil penalties of up to $1,000 per transaction and are required to refund the merchant the interchange fees related to the tax amount. The act is set to take effect upon passage, aiming to protect merchants from excessive fees on tax-related transactions and ensure fair practices in electronic payment processing.