Maryland:
Guard
Your Card

Maryland lawmakers have introduced legislation to completely upend the way your credit and debit cards works – creating confusion for consumers, higher costs for small businesses and potentially jeopardizing your personal information.

Businesses pay a small percentage of each purchase – approx. 2% – to process your credit and debit card transactions. That fraction is used to safeguard credit card networks, prevent fraud, and fund reward programs. The Maryland proposal would create a carveout so the tax and tip portions of an overall purchase is exempt from card processing costs known as interchange.

So why are some Maryland politicians trying to change the easy, convenient, hassle-free credit and debit card system we rely on every day? Because corporate mega-stores and the largest convenience store chains are trying to pocket more money.

But small businesses can’t afford this change. If HB29 and SB917 pass, Maryland small business owners, who are already on tight margins, could have to pay for new card processing systems and implementation of new accounting headaches.

Worse yet, to ensure your transaction is accurately processed under the new changes, businesses could have to share additional information about the purchases you make –potentially compromising your privacy.

This is why no other state in the country or no other country around the world processes credit and debit card transactions this way. In fact, 29 other states have rejected this idea because of the impact and hurdles it would have on commerce across the state – just so the big corporations can make more money.

 

 

The Maryland Attorney General has told lawmakers that “there is a real risk that the bill’s provisions are preempted by federal law.” So why are Maryland lawmakers pressing legislation that may be illegal?

 

A 2022 study conducted by Spelman Collegeand other studies have found that interchange mandates disproportionately impact low-income and rural communities. And while corporate mega-stores claim to pass the savings on to consumers, the Federal Reserve Bank of Richmond found that they did not.

Take Action

Tell your state’s leaders Maryland cannot afford the credit card chaos this experimental bill will cause. Small businesses cannot afford the new costs and cardholders will not tolerate the loss of convenience and privacy these new changes will bring – just so corporate mega-stores and nationwide convenience chains can pocket more money. The current credit and debit card processing system works and provides a valuable services by facilitating efficient purchases, universal acceptance and state-of-the-art protections against fraud and personal identity theft.

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Avoid Credit Card Chaos

This new change would bring about credit card chaos for both consumers and small businesses, here’s why:

Private information about what consumers are purchasing will be required to be shared, eliminating the privacy protections that exist today.
Under the new law, consumers could be forced to pay sales tax in cash or check. Purchases will require two transactions – one for the goods or services and another for taxes and tip. As retailers look to eliminate the hassle of multiple transactions or filing for monthly refunds, some may be forced to require that tax be paid in cash. Customers who have grown accustomed to shopping with only their phone or a single card will also need to start carrying cash.
Smaller merchants will bear the cost burden of complying with the new law, whether through new technology to separate or itemize transactions or time spent every month gathering paperwork to request a refund for interchange. This requires time most small businesses don’t have and is prohibitively complex for retailers selling products with varying tax rates.
Vendors selling online could decide that doing business in the state is not worth the hassle and expense of complying with this radical change to commerce.

Resources

MD Considers Policy That Favors Corporate Giants

Our Local Maryland Partners

Paid for by the Electronic Payments Coalition

www.electronicpaymentscoalition.org

1747 Pennsylvania Ave. Washington, DC 20006