Small businesses, credit unions, community banks and everyday consumers all rely on a credit card system that is secure, reliable and accessible. But current legislation threatens to undermine that system in ways that would harm the very people it claims to help.
The two proposals, House Bill 2090 and Senate Bill 1202, would fundamentally alter how credit and debit card transactions are processed in the commonwealth. The measures would upend a carefully built electronic payment system and make everyday transactions more complicated, more expensive, and less secure for Pennsylvania consumers and small businesses alike.
For small businesses, credit cards are more than a payment method. They are a financial tool that provides predictable access to short term credit, fraud protection and rewards that help offset tight margins. Credit cards also enable instant transactions, online commerce and seamless cross-border payments that drive sales and help small businesses reach more customers in an increasingly digital marketplace.
Government mandated routing rules would jeopardize those benefits. While the largest national retailers may see a financial windfall, Main Street businesses would face higher costs, fewer card options and reduced access to credit.
Credit unions and community banks — themselves small businesses — would also be hit hard. These institutions play a critical role in local economies, offering loans and services that depend on the revenue generated from card programs. When the government imposes routing mandates that function like price controls, it cuts into the funds these institutions use to support lending, maintain operations and invest in fraud prevention.
And fraud is not a small issue. When a fraudulent transaction occurs, financial institutions — not retailers — absorb the cost, covering billions yearly to keep the system safe. They are responsible for making consumers whole and maintaining the security infrastructure that protects the entire payments system. Reducing the revenue that pays for those protections puts consumers at greater risk and strains the very institutions that safeguard them.
Consumers would feel the impact in other ways as well. Credit cards offer strong fraud protections, reliable access to credit and rewards programs that millions of Americans — including many lower income households — rely on. If interchange revenue is slashed, card programs will shrink. Rewards will decline. Some consumers may lose access to credit altogether. And despite promises from large retailers, past experience shows that savings from interchange regulation rarely reach consumers at the checkout line.
In fact, following similar legislation at the federal level to cap interchange on debit cards, where retailers and politicians said consumers would end up saving money, a Federal Reserve Bank of Richmond study showed that 98% of retailers either failed to reduce prices or actually raised them the last time interchange was regulated (77.2% stayed the same, 21.6% increased).
If these large retailers avoid paying the full cost of card processing, they stand to pocket millions — and consumers and small businesses pay the price. It is no wonder then that when similar bills were introduced in 26 other states or jurisdictions in 2025, they failed in each and every one of them.
The practical effect of HB 2090 and SB 1202 is that they would make Pennsylvania an outlier and risk the removal of hundreds of thousands of businesses from seamless access to the global payments network.
The U.S. payments system is one of the most competitive and dependable in the world. It protects consumers, ensures businesses get paid and supports economic activity in every community. Current legislation would put that system at risk, shifting costs onto small businesses, community financial institutions and consumers — while the biggest retailers stand to benefit significantly.
The people who would bear the burden are the ones who can least afford it, and they deserve a payments system that protects them — not one that puts them at greater risk.
Broc Sleek is president and chief executive officer of CHROME Federal Credit Union in Washington, Pa.