A new report warns that Illinois' Interchange Fee Prohibition Act (IFPA), passed as part of a 2024 revenue bill, threatens to hurt consumers, small retailers, and local financial institutions. The law bans issuers, payment card networks, acquirer banks, or processors from receiving or charging any interchange fee on the tax amount or gratuity of an electronic payment transaction. Attorneys Thomas V. Panoff and Maxwell Earp-Thomas noted that banking and payment industry representatives argue the law imposes an undue hardship by forcing them to process certain components without compensation. A federal judge barred enforcement of the law, which was set to take effect in July, and state legislators simultaneously put the law on hold until July 2027. Steve Swedberg of the Competitive Enterprise Institute argues in a report published last week that the law is more likely to produce unintended consequences for consumers, financial institutions, and the majority of merchants, and raises questions about whether state-level payment regulation is compatible with uniform standards for a functioning national payments system.