FOR IMMEDIATE RELEASE
Contact: J. Craig Shearman
(202) 257-3678 craig@shearmancommunications.com
WASHINGTON, Oct. 22, 2025 — Attorneys representing merchants today urged a federal judge to reject banks’ lawsuit seeking to overturn Illinois’ ban on swipe fees on sales tax and tips.
“Banks are desperate to deny reality,” MPC Executive Committee member and National Association of Convenience Stores General Counsel Doug Kantor said. “They want the court to ignore the fact that banks don’t set swipe fees and that Visa and Mastercard do. Banks hide behind price-setting by those credit card giants — and now the credit card giants are trying to hide behind banks in court to overturn a sensible law. It is simply unfair for merchants to pay swipe fees on tax and tip money that they must give to the state or employees. The credit card giants should stop punishing merchants for providing a service to the state and employees.”
Kantor’s comments came after U.S. District Judge Virginia Kendall held oral arguments today in a lawsuit brought by banks challenging the Illinois Interchange Fee Prohibition Act, which bans card networks and banks from collecting swipe fees on the tax portion of transactions or on workers’ tips. The law was originally set to take effect this July but was postponed for one year by the state legislature while the lawsuit is pending.
Illinois Attorney General Kwame Raoul asked today that the banks’ challenge be denied. Attorneys representing the Illinois Retail Merchants Association and three MPC member associations (NACS plus the National Retail Federation and FMI — the Food Industry Association) also participated in the oral arguments, saying the swipe fee ban should be upheld. Merchants’ attorneys argued that since swipe fees are set by non-banks — Visa and Mastercard — they cannot evade complying with state laws.
The litigation over the Illinois law comes as Congress is considering the Credit Card Competition Act to address swipe fees, which hit a record $187.2 billion last year and drive up prices for the average family by nearly $1,200 a year.
Under the legislation, banks with at least $100 billion in assets would enable credit cards to be processed over at least one unaffiliated network like Star, NYCE or Shazam in addition to Visa or Mastercard. The measure is expected to result in competition over fees, security and service that would save merchants and their customers over $17 billion a year. Visa and Mastercard, which control 80% of the market, each centrally set the swipe fee rates charged by all banks that issue cards under their brands and also restrict process to their own networks.
About MPC
The Merchants Payments Coalition represents retailers, supermarkets, convenience stores, gasoline stations, online merchants and others fighting for a more competitive and transparent card system that is fair to consumers and merchants. Follow MPC on Twitter, Facebook or LinkedIn for the latest on swipe fees.
