Credit card processing and merchant services in Illinois

Illinois has no statute that bans or caps credit card surcharges, and NCSL's table of state surcharge laws lists none for the state. The 1% cap you may see quoted comes from House Bill 3128, introduced in 2021, which never passed: it reached sine die when the 102nd General Assembly ended on January 10, 2023.

That leaves the card network rules. Visa caps a surcharge at your merchant discount rate or 3%, whichever is lower, and wants 30 days' written notice to your acquirer. Mastercard caps it at your average effective rate or 4%. Neither allows a surcharge on debit or prepaid cards, and Visa requires notice at the point of entry and the point of sale plus the amount on every receipt.

The act would bar interchange fees on the sales tax and tip portions of card payments. Its interchange article now takes effect July 1, 2027, after the legislature postponed it.

In June 2026 a federal court permanently barred Illinois from enforcing the interchange limit against national banks, federal savings associations, payment card networks and banks chartered in other states that are covered by the Riegle-Neal Act, as the FDIC summarized in a September 2026 proposed rule. The OCC has issued its own order saying national banks and federal savings associations don't have to comply. On September 22, 2026, the court extended the injunction to federal credit unions, the ABA Banking Journal reported, after the NCUA issued a rule on federal credit union fees.

The FDIC counts 235 state banks headquartered in Illinois that would still have to comply. Nothing changes at your terminal before July 2027, and the litigation may not be finished.

The Retail Cash Payment Act (Public Act 104-0665) takes effect January 1, 2028. A retail business with staff accepting in-person payments at a physical location will have to accept cash for sales under $500 there, and it can't post a sign saying cash isn't accepted. It won't have to take bills larger than $20.

A business that violates the act gets written notice and 30 days to fix the problem before a fine. The bill summary says the act preempts home rule powers.

The state rate is 6.25% on general merchandise and 1% on qualifying drugs and medical appliances, with local taxes added on top. Since January 1, 2026, the state no longer taxes groceries, but cities and counties may adopt a local grocery tax of exactly 1%.

On August 1, 2026, the transit tax for the Northern Illinois Transit Authority (formerly the Regional Transportation Authority) rose 0.25% in Cook, DuPage, Kane, Lake, McHenry and Will counties; in Cook County it's now 1.25% on general merchandise. Use IDOR's Tax Rate Finder to confirm the rate for each location.