Proposed Credit Card Restrictions Raise Business Concerns

Connecticut lawmakers are considering legislation restricting the use of consumer credit card data for billing and payment purposes.

HB 5744 prohibits businesses from requiring consumers to store credit or debit card information as a precondition for enrolling in automatic renewal or continuous service agreements. 

Introduced in the legislature’s General Law Committee, the bill will significantly impact consumer convenience and experiences across numerous industry sectors.

CBIA’s Chris Davis told committee members at a Feb. 19 public hearing that disrupting payment processing systems would force business to adopt more labor-intensive methods, increasing administrative costs and potentially raising prices.

“Prohibitions on storing payment methods and renewals will lead to unintended lapses in service, late fees, and potential disruptions in critical services for consumers,” Davis said.

“For businesses, the administrative burden of managing manual renewals would increase operational costs, which could ultimately be passed on to consumers in the form of higher prices.” 

TechNet Northeast executive director Christopher Gilrein told the committee that automatic processing systems were designed to meet consumer expectations.

“Recurring subscriptions were designed with customers in mind, to keep the services they need and want running from month to month without burdening the customer with constant requests for payment,” he said.

For more information, contact CBIA’s Chris Davis (860.244.1931).