New York: PREVENT CREDIT CARD CHAOS
The New York State Assembly is considering legislation, AB 4017 & SB 5587, that would fundamentally alter how credit and debit card transactions are processed. The bills would upend a payments system that underpins modern commerce by prohibiting interchange service costs from being applied to the sales tax and tip portions of card transactions.
Pushed by corporate mega-stores, these bills would inject chaos into everyday transactions for small businesses and consumers. No jurisdiction anywhere in the world calculates credit and debit card transactions this way. That reality is reflected in recent outcomes: in 2025 alone, similar bills were rejected in 26 jurisdictions and passed nowhere.
Why Are AB 4017 & SB 5587 Bad Policy?
Cards May No Longer Work for Tax or Tips
Because AB 4017 & SB 5587 would prohibit interchange on the sales tax and tip portions of credit and debit card transactions, consumers could be forced to pay sales tax and tips in cash.
Creates Chaos for Businesses and Consumers
The bills would add unnecessary complexity to everyday transactions for New Yorkers and businesses could face increased costs and headaches while corporate mega-stores reap all the benefits.
Lawmakers in Albany Are Ignoring the Warning Signs
Hear from experts about the impact of bills similar to AB 4017 & SB 5587.
“Compliance…will be costly, with declarations indicating potentially business-ending consequences for some members of the market.”
“[Illinois Legislation] is an ill-conceived, highly unusual and largely unworkable state law [and] it is likely that fraud risk would increase significantly, consumer services would be constrained, and public trust would decline.”
“Allowing state-by-state erosion of interchange threatens the very infrastructure that enables credit unions to serve communities, including those on military installations and in underserved areas.”
How Would AB 4017 & SB 5587 Hurt New Yorkers?
AB 4017 & SB 5587 would create credit card chaos for consumers, small businesses, and local financial institutions. Here’s why:
SMALL BUSINESSES ARE HARMED
They face increased costs and headaches while corporate mega-stores reap all the benefits.
PUTS LOCAL BANKS AND CREDIT UNIONS AT RISK
These vital financial institutions would face burdensome compliance and excessive fees that threaten their viability.
FORCES CONSUMERS TO USE CASH FOR SALES TAX AND TIPS
Because AB 4017 & SB 5587 prohibit interchange on taxes and tips, purchases made with cards will require two transactions — one for the goods or services and another for sales tax and tip, which consumers would be forced to pay in cash.
THREATENS FRAUD PROTECTIONS
Eroding interchange puts businesses and consumers at risk by jeopardizing funding for fraud prevention and cybersecurity investments that keep card payments secure.
REWARDS GO AWAY
Interchange funds popular credit card rewards programs that consumers depend on — including airline, hotel, and cash back cards — and these programs are likely to disappear if interchange revenue is eroded by AB 4017 & SB 5587.
LEGAL UNCERTAINTY REMAINS
The state could have to use taxpayer money to defend this policy against legal challenges.
Tell Albany: Say No to AB 4017 & SB 5587
Contact your local elected leaders today and tell them you oppose AB 4017 & SB 5587.
Paid for by the Electronic Payments Coalition www.electronicpaymentscoalition.org 1747 Pennsylvania Ave. Washington, DC 20006