UMVA has learned that Colorado Gov. Jared Polis has vetoed Senate Bill 26-134, a move that has been hailed as a major victory for advocates of the global integrated payment system.
The bill, which would have prohibited interchange fees from being imposed on the tax portion of a credit card transaction, had sparked concerns that it could force consumers to use multiple payment methods for a single purchase, causing confusion and disruption to the seamless payment process.
Gov. Polis said in a letter detailing his rationale that the bill presents too much legal risk to Colorado's business environment and consumers, with limited upside for small businesses, making him uncomfortable signing it into law.
This veto comes as many similar efforts at the federal level, including the Credit Card Competition Act, have stalled, but states have become the new battleground for these pieces of legislation, with Illinois being the only state to have passed such a bill to date.
In Illinois, the "Interchange Fee Prohibition Act" would have exempted both the tax and tip portions of a transaction from interchange, but the implementation has been delayed until 2027, and a federal judge has issued a permanent injunction on the law, citing ongoing uncertainty and legal risks.
Nationwide, credit card processing fees for merchants average just over 2%, and efforts to overhaul this system could put popular rewards programs at risk and reduce the amount of financing available to Americans, factors that were cited by Gov. Polis in his letter as reasons for vetoing the bill.
The founder of a prominent travel and rewards website applauded the veto, saying that millions of Americans rely on credit card rewards for travel or to support their household's bottom lines, and that the bill would have injected significant confusion into the payment process.
While this bill isn't taking effect, other efforts to upend the electronic payments system remain under consideration at the state and federal levels, and proponents of the global integrated payment system are breathing a sigh of relief that Colorado's veto has protected consumers and businesses.
