Navigating Payments From Legislation to Innovation

A daily roundup of key developments in the payments industry, covering legislative changes, emerging trends, and innovative payment solutions.

Texas Seeks to Ban Interchange Fees on Sales Tax and Tips

Texas has joined the growing list of states looking to curb interchange fees. New legislation introduced in the Texas state House and Senate aims to prevent interchange assessments on amounts tied to taxes collected for the government and employee tips.

This legislative trend began in Illinois, where a similar law is set to take effect on July 1. Approximately two dozen other states are considering similar measures, with ongoing discussions in a few more states, though no additional bills have been introduced yet.

The exemption of tax and tip amounts from card interchange fees is being heavily contested by banks and card processors. The Illinois Bankers Association, alongside the American Bankers Association and a group of credit unions, has sued Illinois in federal district court to block the law. A temporary injunction, issued in January, prevents the law from being enforced while the court considers its legality. However, this injunction only applies to national banks and federal savings associations, leaving state-supervised card issuers still subject to the law.

If the Illinois law is upheld, it will impose a $1,000 per-transaction fine and require the refund of fees collected on taxes and tips.

Virtual Card Transactions Set for Explosive Growth

A new study from Juniper Research projects a 235% growth rate in virtual card payments between this year and 2029, compared to a 175% increase from 2021 to 2025.

This acceleration is largely driven by the rise of the subscription economy. Both B2B and consumer markets are increasingly turning to virtual cards to improve efficiency in managing recurring payments. Virtual cards provide benefits such as setting spending limits, real-time payment tracking, and assigning cards to specific subscriptions or businesses.

In B2B markets, these features help companies balance automation with financial oversight when making high-value recurring payments. Juniper Research also highlighted significant opportunities in emerging markets, where large populations remain unbanked. Card issuers are encouraged to partner with telecom companies to tap into their vast customer bases.

Eagle Processing Systems Introduces Dual Pricing for Fleet Cards

Eagle Processing Systems, in collaboration with Charge Anywhere, has launched Petro Partner Plus, a dual-pricing processing solution designed specifically for fleet card transactions.

The companies describe the solution as “revolutionary,” offering gas stations an easier way to adopt the dual-pricing trend. Eagle Processing Systems is actively working with experienced ISOs and agents to bring the solution to market.

Closing Thoughts

That’s it for Today in Payments! Be sure to tune in again tomorrow and every weekday for your daily dose of payments notes.