Local businesses in the District of Columbia are poised for relief as the Council of the District of Columbia introduces the "Fair Swipe Act of 2025," aimed at alleviating the financial burden of interchange fees on credit and debit card transactions. Introduced on March 5, 2025, by Councilmember Nyasha Howard and supported by several colleagues, the bill seeks to protect local eateries and retailers from excessive fees that currently diminish their profits.

The primary focus of the Fair Swipe Act is to prohibit the charging of interchange fees on the sales tax and gratuity portions of transactions. Currently, businesses are charged an average of 2-4% on these fees, which are not part of their revenue but rather taxes owed to the government and tips for employees. By eliminating these fees, the bill aims to ensure that more of the money earned by local businesses stays within their operations, allowing them to reinvest and grow.

Key provisions of the bill include a process for merchants to submit documentation for tax and gratuity to receive credits for interchange fees charged. Additionally, the legislation imposes a civil penalty of $1,000 for each violation, ensuring compliance among payment processors. A non-severability clause is included to protect the bill's core provisions from being undermined in potential legal challenges.

The introduction of this bill has sparked discussions among stakeholders. Supporters argue that it is a necessary step to support local businesses, which are vital to the economy and community fabric. Critics, however, may raise concerns about the implications for payment processors and the potential for increased costs being passed on to consumers.

The Fair Swipe Act of 2025 is expected to have significant economic implications, particularly for the restaurant industry, which generated over $1.1 trillion in sales in 2024. By reducing the financial strain on businesses, the bill could foster a more robust local economy and encourage entrepreneurship.

As the Council moves forward with deliberations, the outcome of this legislation could reshape the financial landscape for local businesses in the District, providing them with much-needed support in a challenging economic environment. The next steps will involve committee reviews and potential amendments, with advocates urging swift action to ensure the bill's passage.