SB 5363
In CommitteeSenate
Reg. businesses/card fees
Modernizing payment systems by expanding consumer-friendly transaction options for registered tow truck operators and regulated businesses.
This status may be delayed. See Action History below for the latest updates.
How does a bill become law?
- Introduced: The bill is filed and assigned a number.
- Committee: A subject-matter committee holds hearings, takes public testimony, and decides whether to advance the bill.
- Floor Vote: The full chamber (House or Senate) debates and votes on the bill.
- Opposite Chamber: The bill repeats the committee and floor vote process in the other chamber.
- Governor: The Governor reviews the bill and decides whether to sign or veto it.
- Signed: The bill has been signed into law.
AI Analysis
This bill lets regulated businesses—including registered tow truck operators—charge consumers a transparent fee up to 3% to cover credit card processing costs, as long as a no-cost payment option is always available and clearly disclosed. It aims to fix an economic disadvantage for small businesses that provide essential services but currently cannot recover these fees like unregulated businesses can.
- Allows businesses whose fees or charges are regulated by the state to charge a credit card transaction fee of up to 3% of the payment amount.
- Requires businesses to always offer a no-cost payment option (e.g., cash, check, or debit without surcharge) and to disclose this option to consumers at the same time and in the same manner as credit card information is collected.
- Defines 'credit card payment' broadly to include any card transaction that incurs an interchange fee, regardless of card type (credit, debit, or prepaid).
- Aligns Washington’s treatment of regulated businesses with unregulated businesses and state practices (e.g., the Department of Licensing’s existing card fees under RCW 46.01.235).
Who is affected
- Registered tow truck operators — Tow truck operators who are registered with the state and often perform towing services at the request of public agencies but are not always reimbursed for their work; they may now recover credit card processing fees to offset costs and improve financial sustainability.
- Other regulated businesses — Other businesses whose fees or charges are regulated by the state (e.g., certain utility providers, licensed contractors, or service providers under state rate or fee oversight); they gain the ability to pass on credit card fees transparently, similar to unregulated businesses.
- Consumers — Consumers who pay for services from these businesses; they gain access to a no-cost payment option (e.g., cash, check, or debit without surcharge) and must be clearly informed of this option before submitting payment card details.
- State agencies — State agencies (e.g., Department of Licensing) that already charge transaction fees for card payments; this bill aligns state practice with how regulated businesses may now handle similar fees.
Pro/Con Analysis
Stronger case for benefits
Potential Benefits (5)
Allows small tow operators and other regulated businesses to recover credit card processing fees, improving cash flow and reducing financial strain from unreimbursed public agency tows.
Business & EmploymentPeopleRef: Sec. 2(1)(a)Provides a transparent, standardized way for small businesses to pass on interchange fees, leveling the playing field with unregulated businesses and preventing hidden cost absorption that could lead to service cuts or closures.
FinancialPeopleRef: Sec. 2(1)(a)Improves financial sustainability of tow operators—many of whom provide essential emergency response—reducing risk of service disruption in rural or low-margin areas where unreimbursed tows are common.
Public SafetyPeopleRef: Sec. 2(1)(a)May reduce reliance on state reimbursement programs for tow operators, indirectly easing budget pressure on state agencies without creating new state costs.
Business & EmploymentPeopleRef: Sec. 2(1)(a)Ensures consumers retain access to a no-cost payment method, preserving financial autonomy and preventing coercion into paying for a service they may not use or trust.
Rights & LibertiesRef: Sec. 2(1)(b)
Potential Concerns (5)
Requires businesses to maintain dual payment systems (card + no-cost option), increasing operational complexity and training costs for small businesses.
Business & EmploymentRef: Sec. 2(1)(a)Mandates specific disclosure timing and method for no-cost options, potentially increasing administrative burden and requiring system updates for point-of-sale software.
Business & EmploymentRef: Sec. 2(1)(b)Broad definition of 'credit card payment' to include debit and prepaid cards that incur interchange fees may lead to unintended surcharging of debit transactions, confusing consumers and increasing compliance risk for small firms.
Business & EmploymentRef: Sec. 2(3)The 3% cap may exceed actual interchange fees for many small tow operators (often 1.5–2.5%), allowing some to overrecover and potentially raise prices above cost, reducing consumer welfare.
FinancialRef: Sec. 2(2)If some consumers avoid using cards due to surcharges and switch to cash, small tow operators may face increased cash-handling risks (theft, loss, counting errors), potentially compromising service continuity during emergencies.
Public SafetyRef: Sec. 2(1)(a)
Who Is Most Affected
Registered tow operators—especially small, independently owned firms—gain ability to recover interchange fees, improving cash flow and reducing financial losses from unreimbursed public agency tows. This directly supports business viability and service continuity, particularly in rural or low-reimbursement jurisdictions.
Consumers gain a guaranteed no-cost payment option and clearer disclosure, protecting against surprise fees. However, those who prefer card payments may face slightly higher effective prices if the 3% fee exceeds actual interchange costs, disproportionately affecting low-income users who rely on credit.
State agencies (e.g., DOL) benefit from alignment with existing practices, reducing legal ambiguity and potential challenges to their own card fees. No significant fiscal impact, but strengthens precedent for state-level transaction fees.
Other regulated businesses (e.g., licensed contractors, utility service providers under state rate oversight) gain similar fee-recovery rights, improving fairness relative to unregulated competitors. However, many may not utilize the option if their current pricing models absorb interchange costs or if customer expectations discourage surcharging.
Credit card networks (Visa, Mastercard, etc.) may see minimal impact, as the bill only applies to regulated businesses and caps fees at 3%—within current network rules. However, if widespread adoption occurs, it could strengthen industry arguments for broader surcharge rights.