The Vermont State Senate moved closer Wednesday to passing legislation that would give merchants there more control over the fees they pay to accept credit cards.

The bill, which is expected to go to a final vote on Friday, would prevent electronic payment processors from imposing penalties or fines on merchants that offer discounts to encourage customers to use other, less-expensive types of payments, such as cash. Merchants would also be permitted to set a minimum amount for card purchases.

If the bill passes, Vermont would be the first state to enact such legislation, according to the Merchants Payments Coalition, a trade group for retailers.

"Due to the market power of the two largest electronic payment system networks, merchants do not have negotiating power with regard to the contract for acceptance of credit and debit cards and the cost of the interchange fees for such acceptance," the bill says. "Merchants are subject to contracts that allow the electronic payment system networks to change the terms without notice, subject merchants to staggering fines or reinterpret the rules and hold the merchant responsible."

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