Illinois swipe fee controls will backfire on consumers and small businesses. The state's Interchange Fee Prohibition Act aims to reduce costs by capping fees on credit card transactions, but evidence suggests otherwise. When similar regulations were applied to debit cards under Dodd-Frank, they reduced rewards and banking access for low-income individuals. Merchants face significant compliance costs to update payment systems, yet studies show only 1.2 percent pass savings to consumers while 21.6 percent actually raised prices. Larger retailers can absorb these expenses, but small businesses bear disproportionate burdens. The law creates market distortions that ultimately harm the very people it claims to protect through higher prices and reduced financial services.
