A Conversation with InterPayments’ General Counsel Spencer Stiefel
Between Illinois’ delayed fee law, Oklahoma’s new surcharging rules, and renewed federal attention on the Credit Card Competition Act (CCCA), businesses are facing a complex patchwork of evolving surcharging requirements with serious compliance risks, ranging from costly fines to restrictions on card acceptance. To gain some clarity, we sat down with InterPayments’ General Counsel, Spencer Stiefel, who shared his perspective on the current legal environment––and what merchants, banks, and ISVs should be watching closely.
Spencer began his career working in commercial litigation at a large international law firm before moving into general counsel roles. With more than 15 years in the legal field, he made the leap to fintech in 2024, driven by a passion for innovation and impact. Today, Spencer leads InterPayments’ growing legal team, helping clients adapt to fast-moving legal changes and reinforcing our commitment to best-in-class surcharging services.
What does a typical day look like for you as General Counsel at a surcharging-focused fintech company?
A typical day includes managing corporate legal issues, finalizing customer and partner contracts, and making sure our services run smoothly. A big part of my role is compliance. That includes monitoring regulatory and legislative developments across the country, responding to compliance inquiries, and making sure we stay on top of both formal regulations and credit card network rules. Unlike most areas of law, surcharging is regulated not only at the state and federal levels, but also by the card networks, which have their own sets of rules.
Normally, the best way to know how to comply with a law is by looking at past challenges, such as cases where someone violated the law, challenged it, and then a court clarified what’s allowed and what’s not. Because that process hasn’t really happened yet with most of the surcharging laws, we start by reviewing all available documentation and guidance, then analyze the questions regulators are asking to help us better understand the law’s intent.
What kinds of questions or challenges land on your desk most often?
Most of the questions are highly specific and situational, like “Does this meet Visa’s rules?” or “Is this compliant with New York law?” Sometimes, merchants get pushback from customers who claim surcharging isn’t legal, and they come to us asking how to respond.
What’s surprising is how often entirely new questions come up. You’d think we’d see the same scenarios on repeat, but every merchant has a different business model, customer base, or set of priorities—and the laws themselves are still relatively new and untested.
Shifting to the current regulatory landscape—how are interchange laws evolving at the federal and state levels?
Before we dive in, it’s important for us to define the difference between “interchange” and “surcharge.” Interchange fees, or “swipe fees,” refer to the costs merchants pay to banks, processors, or card networks in exchange for accepting credit cards. Surcharging helps offset the cost of accepting credit cards, allowing merchants to pass those costs on to the customer—who can then choose whether to use their credit card and pay a fee or switch to an alternative payment method that has no surcharge.
At the state level, new laws are emerging that reshape how interchange fees are applied and calculated. In Congress, the Credit Card Competition Act (CCCA) returned to the spotlight as a proposed amendment to the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act. While the Senate recently voted to omit the CCCA from the GENIUS Act, we expect a future push for this legislation.
One important aspect of all this is how lawmakers attempt to strike a balance between supporting merchants and protecting the customer experience. Lawmakers hear from the major players—trade groups, industry representatives, card networks, consumer protection and small business advocates—and they are all fighting hard to shape how these laws get written and, ultimately, how much flexibility merchants have.
Can you share a recent example of how these laws are affecting surcharging?
One is the Illinois Interchange Fee Prohibition Act, which aims to stop banks from applying interchange fees to the tax and tip portions of a transaction. On paper, that sounds simple, but it’s a major operational challenge: banks generally aren’t set up to break down a single transaction into base price, tip, and tax when calculating fees.
To work around that, Illinois created a rebate system. Banks can still apply interchange fees to the full transaction, but merchants can later request a rebate on the portion that covered tax and tip. That’s where surcharging becomes tricky—if a merchant passes the full fee on to the customer at checkout and then gets a rebate later, they’ve technically overcharged, violating card network rules, which say you can’t surcharge more than your actual cost.
The law was originally scheduled to take effect on July 1 of this year, but it was challenged in court, partially blocked, and ultimately delayed by the legislature.
What’s happening in other states—any new developments there?
Many state legislatures are actively considering new laws that could impact surcharging. Some proposals aim to enable it, such as a law that was recently introduced in Maine. In other cases, the laws focus on tightening restrictions on surcharging, such as Oklahoma’s recently passed law, which will go into effect this November.
Such varied efforts across the country underscore just how essential it is for us to have a knowledgeable legal team closely tracking these developments. Our clients count on us for timely guidance and industry expertise—a standard that remains central to how we operate.
Do e-commerce and brick-and-mortar businesses face different legal requirements?
They do, and the differences can be significant. Our pre-built and customized services are designed to support both “card-present” and online or e-commerce transactions. Interestingly, many regulators don’t fully account for the nuances of e-commerce when writing laws.
As most of us know, what works in a physical store often doesn’t translate cleanly to a web-based transaction, making compliance far more complex for e-commerce. For example, New York’s law imposes onerous surcharging restrictions that are especially difficult to apply to online transactions. On the other hand, Oklahoma’s newly passed law takes a different approach, explicitly outlining requirements for a business’s homepage and point-of-sales pages, potentially signaling a shift toward more e-commerce-specific guidance.
How are banks and independent software vendors (ISVs) affected differently—or similarly—by this evolving legal environment?
Banks and ISVs are both affected by the changing legal landscape, but in different ways and for different reasons.
Banks are very much in the spotlight when it comes to legislation. The Illinois Interchange Fee Prohibition Act, for example, directly targets how banks apply interchange fees, which impacts their core processing infrastructure and fee structures.
Meanwhile, even though ISVs are rarely named in legislation, their platforms may enable merchants to pass along processing costs to customers. If that’s not done compliantly with state laws and card network rules, they can be seen as indirectly facilitating violations. Card networks have wide discretion and can penalize any party in the chain if they believe rules are being broken.
What are the risks of noncompliance for B2B merchants?
The consequences can vary widely. Card networks can issue fines—and those fines can get pretty high, pretty quickly. In extreme cases, a network could even restrict a merchant’s ability to accept certain cards.
States can also impose penalties. They may fine a business and make the violation public, which can damage reputation and make it harder to operate. In some cases, it could even affect a merchant’s ability to continue doing business in that state.
With so much legal momentum around interchange fees, what trends or developments do you think business owners and executives should be paying closer attention to right now?
We’re seeing a trend toward states creating formal frameworks for surcharging. These frameworks typically outline requirements for compliant surcharging—caps on fees, signage requirements, notification timing, and so on.
At the same time, there’s still action targeting interchange fees—especially at the federal level, but also in a few states. These efforts go upstream, trying to cap or limit the fees that merchants pay to accept credit cards. And those efforts often create ripple effects downstream. There are really two fronts to watch:
- The processor side, where interchange fee reforms are being debated.
- The merchant side, where surcharging frameworks are evolving.
Both add complexity, which is why it’s so important for merchants to have a partner who’s actively monitoring developments and helping them stay compliant as the landscape shifts.
What’s your advice to B2B business owners and executives who are hesitant to implement surcharging, given the current legal uncertainty?
A little bit of hesitancy is healthy because there’s exposure on both the regulatory and card network side. The card networks can impose extremely steep fines if their rules are violated. A merchant who just jumps in and says, “We’re going to start adding a 3% fee across the board,” is taking a huge risk.
Credit cards are a vital part of doing business, but the processing fees really add up. That’s why it’s so important to work with a Managed Surcharge Provider—we empower merchants to recover those costs in a fully compliant way, without worrying about getting blindsided by a fine from a card network or regulator.
InterPayments guarantees 100% compliance, backed by indemnification. Given how quickly the legislative landscape can shift, how does your legal team help deliver on such a significant promise?
Our platform is built to ensure that everything we do is fully compliant—down to the smallest detail. Most of our merchants operate across multiple states, each with its own evolving laws, so becoming an expert in every jurisdiction just isn’t realistic. Fortunately, they don’t have to be—that’s our job.
With surcharging, launching a program is only the first step. The real challenge is navigating the ongoing legal complexities that come with it, which is why compliance isn’t just part of what we do; it’s the foundation of our entire business model.
And we back it all with contractual indemnification. That’s not just a promise, it’s protection in writing. To date, we’ve never had a merchant fined for non-compliant surcharging, but if a fine were ever issued, we’d step in. We’re confident in our ability to demonstrate compliance, and in the rare case of a valid violation, we would cover the penalty on behalf of our customers.
This level of assurance is one reason why some of the nation’s largest banks, payment processors, software platforms, and Fortune 500 companies choose to partner with us. As a Managed Surcharge Provider, they trust us to handle the complexity of compliance, giving them the confidence to focus on what they do best.