What's happening
This bill prohibits sellers from imposing surcharges on debit card transactions, with exceptions for cash discounts and certain cash back situations.
Why it matters
Expands consumer protections by banning debit card surcharges. The bill closes a loophole by making it illegal for sellers to add extra charges on debit card transactions, just as with credit cards. This ensures debit card users aren't penalized for their choice of payment, which is particularly important as more people rely on debit and prepaid cards for everyday purchases.
Allows for transparent cash discounts and limited cash back fees. Sellers can still offer discounts for cash, check, or debit payments, but only if these are available to all customers and clearly disclosed. Additionally, surcharges are permitted when a customer receives cash back during a transaction, but only for the cash-back portion and with advance, conspicuous disclosure—helping consumers avoid surprise fees.
Shields sellers from restrictive payment system rules. The bill prevents electronic payment networks (like Visa or Mastercard) from penalizing sellers for advertising or displaying cash discounts at the point of sale. This empowers small businesses to inform customers of lower prices for non-card payments without fear of fines from card companies.
Introduces penalties for violations and protects sellers from unfair fines. Sellers who violate the surcharge ban face misdemeanor charges and fines up to $500 or jail time. If payment networks fine sellers for actions now protected by this law, the networks could be required to reimburse the fines and pay additional civil penalties, offering sellers recourse against unfair practices by powerful payment systems.
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Who cares
Debit and prepaid card users
The bill would prohibit purchase surcharges for using these cards, while allowing clearly disclosed surcharges limited to cash back received beyond the purchase amount.
Retailers and other sellers
Sellers would face misdemeanor penalties for prohibited surcharges but could offer clearly disclosed payment-method discounts to all prospective buyers and charge qualifying cash-back fees.
Electronic payment systems and processors
The bill would bar contractual restrictions on sellers’ point-of-sale pricing displays, excluding advertisements, and prevent interference with permitted discounts and cash-back surcharges.
Merchants facing payment-system fines
An electronic payment system whose fine on an acquirer results in a seller paying a fine that violates the section would owe the seller that amount and face a civil penalty of up to twice the fine.
Headline styles
Ban Debit Card Surcharges
Plain English, a few words. Used as the page title.
Sponsors
28 Multi-sponsors
- Peter Abbate
- Thomas Abinanti
- Jeffrion Aubry
- Michael Benedetto
- Kevin Cahill
- William Colton
- Vivian Cook
- Marcos Crespo
- Steven Cymbrowitz
- Michael DenDekker
- Steven Englebright
- Sandy Galef
- Deborah Glick
- Richard Gottfried
- Aileen Gunther
- Andrew Hevesi
- Ellen C. Jaffee
- Charles Lavine
- Joseph Lentol
- Donna Lupardo
- William Magnarelli
- Amy Paulin
- N. Nick Perry
- Philip Ramos
- Jose Rivera
- Linda Rosenthal
- Fred Thiele
- Kenneth Zebrowski
History
- Referred to consumer affairs and protection
- Referred to consumer affairs and protection
Full text
2 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
4515
2019-2020 Regular Sessions
IN ASSEMBLY
February 4, 2019
Introduced by M. of A. WEPRIN -- Multi-Sponsored by -- M. of A. ABBATE, ABINANTI, AUBRY, BENEDETTO, CAHILL, COLTON, COOK, CRESPO, CYMBROWITZ, DenDEKKER, ENGLEBRIGHT, GALEF, GLICK, GOTTFRIED, GUNTHER, HEVESI, JAFFEE, LAVINE, LENTOL, LUPARDO, MAGNARELLI, PAULIN, PERRY, RAMOS, RIVERA, L. ROSENTHAL, THIELE, ZEBROWSKI -- read once and referred to the Committee on Consumer Affairs and Protection
AN ACT to amend the general business law, in relation to prohibiting the imposition of a surcharge by a seller in a sales transaction on a holder who uses a debit card
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Section 518 of the general business law, as added by chapter 160 of the laws of 1984, is amended to read as follows:
§ 518. [Credit] Payment card surcharge prohibited. 1. No seller in any sales transaction may impose a surcharge on a holder who elects to use a credit card or debit card in lieu of payment by cash, check, or similar means. For purposes of this section, "debit card" includes a prepaid card or other means of access to prepaid funds that may be used to initiate electronic funds transfers and may be used without unique identifying information such as a personal identification number to initiate access to prepaid funds.
2. Nothing in this section shall prohibit any seller from:
a. offering discounts to a buyer to induce the buyer to pay by cash, check, debit card or similar means rather than by credit card or debit card, if such discounts are offered to all prospective buyers and disclosed clearly and conspicuously; or
b. imposing a surcharge on a holder who, in connection with a credit card or debit card transaction, receives cash back beyond the purchase amount of the sales transaction, but such surcharge may only be applied if disclosed clearly and conspicuously to the holder prior to the
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD08221-01-9
A. 4515 2
completion of the transaction and only applied to the amount of cash back provided by the seller.
3. No person may prohibit a seller from:
a. offering discounts to a buyer to induce payment by cash, check, debit card or similar means rather than by credit card or debit card if such discounts are consistent with the requirements of this section; or
b. imposing a surcharge on a holder who, in connection with a credit card or debit card transaction, receives cash back beyond the purchase amount of the sales transaction, but such surcharge may only be applied if disclosed clearly and conspicuously to the holder prior to the completion of the transaction and only applied to the amount of cash back provided by the seller.
4. An electronic payment system may not, directly or through any agent, processor or member of such system, impose any requirement, condition, penalty or fine in a contract with a seller relating to the display, at the point of sale, of pricing for goods or services offered by seller, including a display relating to a discount to induce payment by cash, check or similar means. This prohibition shall not apply with respect to the display of pricing for goods or services in advertisements.
5. Any seller who violates the provisions of this section shall be guilty of a misdemeanor punishable by a fine not to exceed five hundred dollars or a term of imprisonment up to one year, or both.
6. If an electronic payment system imposes a fine on an acquirer that results in the payment by a seller that violates any provision of this section, the electronic payment system shall be liable to the seller for the amount of any such fine paid by the seller, and, in addition, subject to a civil penalty up to twice the amount of such fine.
§ 2. This act shall take effect on the one hundred twentieth day after it shall have become a law.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.