Credit card swipe fees have gone up by 300% in the last decade. Every time you use your credit card at small business, the small business owner must give a significant portion of that sales price to the credit card companies — simply for the privilege of accepting their card!
High credit card swipe fees mean:
Small businesses put billions of dollars in the pockets of credit card companies and banks and can’t grow and create jobs for Americans.
Consumers feel an extra pinch in their wallet as they face higher prices for everything from food and gasoline to consumer electronics and clothing.
You can fight back. Together we can call on policymakers to set rules to hold credit card companies accountable and reduce the unfair fees they charge consumers and small businesses.
J.D. Power & Associates found overall satisfaction among credit card customers to be the lowest in the financial services industry – even though banks and investment firms failed and insurance companies became wards of government.
(J.D. Power and Associates, “Fees and Rates Drive Decline in Overall Credit Card Customer Satisfaction,” www.jdpower.com, 9/1/09)
A swipe fee is a fee collected from retailers by the credit card companies and their member banks every time a credit or debit card is used to pay for a purchase. This fee is also known as “interchange.” This fee varies with type of card, size of merchant and other factors, but as much as $2 of every $100 you spend on plastic goes to card issuers. Credit and debit card interchange collected by Visa and MasterCard banks totaled about $48 billion in 2008, triple what it was in 2001. These fees raise prices for consumers. In 2008, the average American family paid about $427 in interchange fees.
Swipe fees add to the price of everything we buy, even if we choose not to use a credit or debit card. Americans paid about $48 billion in credit card swipe fees in 2008 alone, more than all other credit card fees combined.
Visa and MasterCard each separately work with their member banks to set swipe fees. The agreement between these banks, which should compete for business, is illegal price fixing and it hurts consumers and merchants.
Visa and MasterCard collected about $48 billion in swipe fees in 2008, triple what was collected in 2001. In 2008, the average American family paid about $427 in swipe fees.
Swipe fees are rising the fastest on gasoline purchases; payouts to the credit card industry have more than doubled since 2004.
Credit card companies and their member banks have increased the amount of swipe fees collected by both increasing rates and encouraging more people to pay by plastic instead of cash.
Even though advances in technology continue to bring down the cost of transaction processing, swipe fees keep going up. A recent study concluded that only 13 percent of the swipe fees that the big credit card companies collect actually goes for transaction processing. Most of the money goes toward profits for the banks, rewards programs that benefit mostly affluent cardholders and direct mail marketing campaigns that clog mailboxes with nine billion unsolicited credit card offers every year.
Many of those unsolicited mailings include so-called “convenience checks”that can be stolen and cashed by someone other than the authorized card holder. Yet the card companies and their banks spend only four percent of the swipe fees they collect on measures to protect consumers from this and other forms of credit card fraud.
U.S. swipe fees average close to two percent, while in other industrialized countries like Australia the rate is one-half of one percent and in Europe the rate for cross border transactions is less than one-third of one percent.
Visa and MasterCard each separately work with their member banks collectively to set the price of swipe fees. This is illegal price fixing and hurts Americans. Credit card swipe fees have tripled since 2001 and there’s no end in sight, even though the actual cost of transaction processing continues to go down.
American consumers pay the hidden credit card swipe fee on virtually every purchase they make, whether they use a credit card or not because the credit card companies require merchants to spread the cost of these fees to all of their customers. The system is structured so that credit card companies make more money on each transaction when the price of retail goods increases. For example, even though the cost of processing a $1 transaction is virtually the same as processing a $100 transaction, the swipe fee paid on that $100 sale is higher because the swipe fee is calculated as a percentage of the total sale. The higher the sale, the higher the fee.
A group of retailers, supermarkets, drug stores, convenience stores, fuel stations, and other businesses are fighting against unfair credit card fees. They want a more competitive and transparent card system that works better for consumers and merchants alike and have formed the Merchants Payments Coalition and launched the website unfaircreditcardfees.com. The coalition’s member associations collectively represent about 2.7 million stores with approximately 50 million employees.
Convenience stores across the nation, who are among the hardest hit by unfair swipe fees because of the fees assessed to gasoline sales, have taken action to alert their customers about these fees and are collecting millions of signatures urging Congress to reform the system. In addition, this website you are visiting (fightswipefees.com) makes it easy for consumers to sign an online petition to Congress or even send a letter directly to their representatives urging action to reform unfair swipe fees.
Individual consumers are beginning to take action to urge Congress to reform unfair swipe fees. In the summer of 2009, nearly 1.7 million consumers signed petitions at 7-Eleven stores urging such action. This winter, millions more are signing similar petitions in convenience stores across the country or via this website (fightswipefees.com).
A rare bi-partisan consensus has emerged that the forces that drive free enterprise should also drive how swipe fees get set. Currently, Congress is considering legislation specifically focused on this issue as well as other bills that are expected to address reform. The following are key actions taken or expected to be taken in the near future:
H.R. 2965, the Credit Card Fair Fee Act and S. 1212, the Credit Card Fair Fee Act. These bills are very similar and each will allow merchants to come together and negotiate with the credit card companies and their banks swipe fee rates and acceptance terms. Similar legislation was passed by the House Judiciary Committee in 2008.
H.R. 2382, the Credit Card Interchange Fees Act. This bill will repeal some of the rules imposed by credit card companies on merchants that are anti-competitive, empower the Federal Trade Commission to take further action if necessary and will require disclosure of swipe fee rates and rules.
Government Accountability Office report on Rising Interchange Fees (PDF). This report confirms many of the most harmful aspects of unfair, hidden swipe fees. The report shows that the credit card companies and their issuing banks have been misleading the public about their increasing rates and about the benefits of credit cards to businesses. The report also outlines an unfair, anti-competitive system that hurts Main Street businesses and their customers in order to pad the banks’ bottom lines, with little relation to the actual costs of processing payments.
In addition, several national consumer organizations are urging Congress to take action. These include: U.S. PIRG (Public Interest Research Group). In testimony before the House Financial Services Committee, Edmund Mierzwinski (PDF), PIRG’s consumer program director, supported legislation to reform unfair swipe fees and said:
Interchange fees are hidden charges paid by all Americans, regardless of whether they use credit, debit, checks or cash. These fees impose the greatest hardship on the most vulnerable consumers – the millions of American consumers without credit cards or banking relationships. These consumers basically subsidize credit and debit card usage by paying inflated prices – prices inflated by the billions of dollars of anticompetitive interchange fees. And unfortunately, those interchange fees continue to accelerate, because there is nothing to restrain Visa and MasterCard from charging consumers and merchants more.
Americans for Financial Reform. This is a coalition of 200 national, state and local consumer, labor, retiree, investor, community, and civil rights organizations who have come together to spearhead a campaign for real reform in our banking and financial system. In an official policy paper endorsing swipe fee reformt, the group said:
Markets don’t work when there are hidden fees and rules – and no one hides fees and rules better than the credit card companies. Credit card markets lack the information necessary for both consumers and merchants to make informed choices. For merchants, the markets lack adequate information because the associations prevent merchants from accurately informing consumers of the costs of credit card acceptance or attempting to direct them to more efficient and lower priced payment mechanisms. In fact, merchants have no alternative but to accept the card associations’ cards even when the associations significantly increase prices.
NACS launches phase two of a consumer petition campaign to tell Congress, ‘’Stop unfair credit card fees.’
ALEXANDRIA, VA – More than 8,000 retail stores have signed up as part of the biggest consumer petition drive in American history. These retailers and their customers are telling Congress, “It’s time to reform unfair credit/debit card swipe fees.” Now, NACS is empowering other retailers to join the campaign by visiting www.nacsonline.com/fightswipefees.This fall, 7-Eleven franchisees delivered nearly 1.7 million customer signatures to Congress — the largest number of signatures collected for a public policy issue in history — urging members to “Stop unfair credit card fees.”
Beginning December 15, NACS is coordinating an unprecedented campaign to generate millions more signatures from convenience customers, encouraging Congress to reform unfair credit and debit card interchange, or “swipe,” fees.
The campaign, the second phase of the industry’s consumer petition campaign, was announced on October 21 at the NACS Show in Las Vegas and immediately generated the participation of thousands of stores throughout the country,.
Both 7-Eleven CEO Joe DePinto and Alimentation Couche-Tard CEO Alain Bouchard, who led his company’s credit card interchange petition drive that collected 400,000-plus customer signatures at its Circle K stores, urged retailers to launch their own petition drive in their stores in a video introduced at the NACS Show.
NACS has made joining this effort easy. All the materials retailers need to participate in the latest petition campaign are available free of charge at http://www.nacsonline.com/fightswipefees. These materials can be downloaded and sent to a local printer and then displayed in stores.
The below glossory of terms were extracted from the May 23, 2008 second consolidated amended class action complaint re Payment Card Interchange Fee and Merchant-Discount Antitrust Litigation, filed in the U.S. District Court Eastern District of New York. These definitions of key terms associated with the antitrust litigation are helpful, especially if any defense attorneys or advocacy groups are unfamiliar with interchange issues.
DEFINITIONS as used in this Complaint, the following terms are defined as:
a. “Access Device” means any device, including but not limited to a Payment Card or microchip, that may be used by a consumer to initiate a General Purpose Card or Debit Card transaction.
b. “Acquiring Bank” means a member of Visa and/or MasterCard that acquires payment transactions from merchants and acts as a liaison between the merchant, the Issuing Bank, and the Payment-Card Network to assist in processing the payment transaction. Visa and MasterCard rules require that an acquiring Bank be a party to every merchant contract. In a typical payment transaction, when a customer presents a Visa or MasterCard card for payment, the merchant relays the transaction information to the Acquiring Bank. The Acquiring Bank then contacts the Issuing Bank via the network for authorization based on available credit or funds. Acquiring Banks compete with each other for the right to acquire payment transactions from merchants but do not compete on the basis of the interchange fee, which is the subject of this Complaint.
c. “All-Outlets Rule” is a rule of the Visa and MasterCard Networks that requires a merchant with multiple outlets to accept Visa or MasterCard, respectively, in all of its outlets, even if those outlets are owned by a separate corporate entity, operated under a different brand name, or employ a different business model.
d. “Anti-Steering Restraints” are the rules of the Visa and MasterCard Networks that forbid merchants from incenting consumers to use less expensive payment forms, including: the No-Surcharge Rule; the No-Minimum-Purchase Rule; and the Networks’ so-called “antidiscrimination rules,” which prohibit merchants from treating any other Payment Card or medium more advantageously than the Defendants’cards. The Defendants’ standard-form-merchant agreements proscribe steering by preventing merchants from establishing procedures that favor, discourage, or discriminate against the use of any particular Card.
e. “Assessment” refers to an amount computed and charged by the Networks on each transaction amount to the Acquiring and Issuing Banks.
f. “Authorization” is the process by which a merchant determines whether a cardholder is authorized by his or her Issuing Bank to make a particular transaction. The merchant sends the cardholder’s information to its Acquiring Bank or a Third-Party Processor, which sends it to Visa or MasterCard, which then sends it to the issuer or the issuer’s processor, to obtain authorization. If authorization is given, the process is repeated in reverse.
g. “Charge Card” or “Travel & Entertainment Card” (T&E) is an access device, usually a Payment Card, enabling the holder to purchase goods and services on credit to be paid on behalf of the holder by the issuer of such device. Typically, the contractual terms of such cards require that payment from the holder to the issuer be made in full each month, for all payments made on behalf of the cardholder by the issuer during the preceding month. The issuer does not extend credit to the holder beyond the date of the monthly statement, nor does it impose interest charges on the balance due except as a penalty for late payment. Examples of Charge Cards are the American Express Green, Gold, Platinum, and Centurion cards as well as the Diners Club and Carte Blanche cards issued by Citibank.
h. “Credit Card” is an access device, usually a Payment Card, enabling the holder to (i) effect transactions on credit for goods and services purchased, which are paid on behalf of the holder by the issuer of such devices; or (ii) obtain cash with credit extended by the issuer. Credit Cards permit consumers to borrow the money for a retail purchase from the card issuer and to repay the debt over time, according to the provisions of a revolving-credit agreement between the cardholder and the issuer. Examples of Credit Cards are the Visa and MasterCard Credit Cards issued by members of the Defendant Bank card networks, as well as the Discover and Private Issue cards issued by Morgan Stanley, Dean Witter & Co., and the Optima and Blue-type cards issued by American Express. Proprietary cards of individual merchants for use only at particular merchants’ outlets are not included in this definition.
i. “Debit Card” is an access device, usually a Payment Card, enabling the holder, among other things, to effect a cash withdrawal from the holder’s depository bank account, either at an Automated Teller Machine (“ATM”) or a point of sale.
j. “Float” refers to the expense the Issuing Bank incurs by extending interest-free credit to the consumer for the grace period between the date of purchase and the date of payment.
k. “General Purpose Cards” collectively refers to Credit Cards and Charge Cards.
l. “Grace Period” refers to the time between a consumer’s purchase and the date on which the consumer’s payment is due to the Issuing Bank, during which time the consumer pays no interest.
m. The “Honor All Cards” Rules are rules of the Visa and MasterCard Networks that require any merchant that accepts Visa or MasterCard Payment Cards to accept all Payment Cards that are issued on that Network.
n. “Interchange Fee” in the United States General Purpose Card Network Services and Debit Card Network Services markets means a fee that merchants pay to the Issuing Bank through the Network and the Acquiring Bank for each retail transaction in which the Issuer’s card is used as a payment device at one of the Acquirer’s merchant accounts. The Interchange Fee is deducted by the Issuing Bank from amounts otherwise owed to Class members on Payment Card transactions, and constitutes a component of and a floor for the Merchant-Discount Fee. The following example illustrates how the Visa and MasterCard Interchange Fees work. A customer presents a Visa or MasterCard card to a merchant as a payment method. The merchant contacts the Acquiring Bank, either directly or through a Third-Party Processor, to authorize the transaction. The Acquiring Bank submits the transaction to the Network. The Network relays the transaction information to the Issuing Bank or the Issuing Bank’s Third-Party Processor, which approves the transaction if the customer has a sufficient line of credit or available funds. If the transaction is authorized through the Network, the Issuing Bank pays the Acquiring Bank the payment amount minus the “Interchange Fee,” which is fixed by the member banks of Visa and MasterCard. The Acquiring Bank then pays the merchant the payment amount minus the Interchange Fee and other charges for processing the transaction. The total fee charged the merchant is often referred to as the “Merchant-Discount Fee.” The Interchange Fee is the largest component of the Merchant-Discount Fee. Visa Interchange Fees are fixed periodically by Visa member banks, acting through the Visa Board of Directors. MasterCard Interchange Fees are fixed periodically by the MasterCard member banks, acting through the MasterCard Board of Directors. “Merchant-Discount Fee” means the the same Third-Party Processor.
p. “Issuing Bank” means a member of Visa and/or MasterCard that issues Visa and/or MasterCard branded Payment Cards to consumers for their use as payment systems and access devices. Issuing Banks compete with each other to issue Visa and MasterCard cards to consumers. Visa and MasterCard rules require that all member banks issue, respectively, Visa and MasterCard Payment Cards.
q. “Merchant-Discount Fee” is the total sum that is deducted from the amount of money a merchant receives in the settlement of Visa and/or MasterCard transactions. The largest component of the Merchant-Discount Fee is the Interchange Fee.
r. “Miscellaneous Exclusionary Restraints” refer collectively to the All-Outlets Rule, the No-Bypass Rule, and the No-Multi-Issuer Rule.
s. “Network Services” means the services and infrastructure that Visa and MasterCard and their members provide to merchants through which payment transactions are conducted, including authorization, clearance, and settlement of transactions, and those similar services offered by American Express and Discover. As they currently are offered by Visa and MasterCard and their member banks, Network Services include Network-Processing Services and the Visa and MasterCard Payment-Card Systems that facilitate acceptance of Visa and MasterCard Payment Cards.
t. “Network-Processing Services” are the services that are or may be used for authorizing, clearing, and settling Visa and MasterCard Credit and Debit Card transactions.
u. “No-Minimum-Purchase Rule” is a rule of the Visa and MasterCard Networks that prohibits merchants from imposing minimum-purchase amounts for Visa and MasterCard Credit-Card purchases.
v. “No-Bypass Rule” is a rule of the Visa and MasterCard Networks that prohibits merchants and member banks from bypassing the Visa or MasterCard system (thereby avoiding the supracompetitive Interchange Fees) in order to clear, authorize, or settle Credit Card transactions even if the Issuing and Acquiring Banks are the same, or even if an independent processor has agreements with both the Issuing and Acquiring Banks on any given transaction.
w. “No-Multi-Issuer Rule” is a rule of the Visa and MasterCard Networks respectively, that prohibits Visa and MasterCard transactions from also being able to be processed over other Networks.
x. “No-Surcharge Rule” is a rule of the Visa and MasterCard Networks that forbids merchants from charging cardholders a surcharge on their Payment-Card transactions to reflect cost differences among various payment methods. For example, merchants are prohibited from surcharging cardholders who use a Visa Credit Card rather than a Discover-branded Credit Card, or use a Premium Credit Card rather than a standard Credit Card, or use a Credit Card rather than another form of payment.
y. “Offline Signature Debit Card” or “Offline Debit Card” is a Debit Card with which the cardholder authorizes a withdrawal from his or her bank account usually by presenting the card at the POS and signing a receipt. Offline Signature Debit Card transactions are processed as Credit Card transactions. Examples of Offline Signature Debit Cards include Visa’s “Visa Check” product and MasterCard’s “Debit MasterCard” product.
z. “Online PIN-Debit Card” or “PIN-Debit Card” is a Debit Card with which the cardholder authorizes a withdrawal from his or her bank account by swiping her card at the POS and entering a Personal Identification Number (“PIN”). PIN-Debit-Card networks grew out of regional ATM networks and are therefore processed differently than Offline transactions. Examples of Online PIN-Debit-Card networks include Interlink, Maestro, NYCE, and Pulse.
aa. A “Premium Card” is a General Purpose Card that carries a higher Interchange Fee than a Standard Card and is required by a network to carry a certain level of rewards or incentives to the cardholder. Visa’s “Signature” and “Traditional Rewards” card products and MasterCard’s “World” card product are examples of Premium Cards.
bb. “On-Us Transactions” are transactions in which the Acquiring Bank and the Issuing Bank are the same. Even when the Issuing and Acquiring Banks are identical, Visa and MasterCard require that the Issuing Bank charge an Interchange Fee to the merchant.
cc. “Payment Card” refers to a plastic card that enables consumers to make purchases from merchants that accept the consumer’s Payment Card. The term “Payment Card” refers to several different types of cards, including, General-Purpose Cards, Debit Cards, Travel & Entertainment Cards, stored-value cards, and merchant-proprietary cards.
dd. Although “Payment Cards” are a subset of “Access Devices”, the two terms are used interchangeably herein, because despite evolving technology, Payment Cards continue to constitute the vast majority of Access Devices.
ee. “Payment-Card-System Services” means the standard-setting functions performed by Payment-Card Networks. Payment-Card-System Services encompasses the brand of the particular card program, the rules and protocols for providing merchant acceptance of and conducting Payment-Card transactions under that brand, and the rules and protocols for conducting transactions under that brand. The four leading providers of Payment-Card-System Services are Visa, MasterCard, Discover, and American Express.
ff. “Payment-Guarantee Services” refers to a service that a merchant might purchase to insure the merchant against Credit- or Debit-Card fraud, check fraud, and other forms of payment fraud, and/or assists the merchant in minimizing the costs of such fraud.
gg. “Settlement” is the process by which the merchant is reimbursed for a Payment Card transaction. While Visa and MasterCard rules require that an Acquiring Bank be a party to all merchant card-acceptance agreements, merchants often use Third-Party Processors to process these transactions. The Acquiring Bank or its processor credits the merchant’s bank account with the amount paid by the cardholder less the Merchant-Discount fee, the largest component of which is the Interchange Fee, and then transmits the transaction data to Visa or MasterCard, which sends it to the Issuing Bank or its Third-Party Processor. The Issuing Bank then sends payment to the Acquiring Bank through Visa or MasterCard (and possibly the Acquirer’s processor). In a Credit Card or Offline Debit Card transaction, settlement occurs two to four days after authorization and clearing. In a PIN-Debit transaction, all three processes occur in the same electronic transaction virtually instantaneously.
hh. “Third-Party Processor” is a firm, other than Visa, MasterCard, a member bank, or an entity affiliated with a member bank, that performs the authorization, clearing, and settlement functions of a Visa or MasterCard Payment-Card transaction on behalf of a merchant or a member bank. Examples of Third-Party Processors include First Data and Transfirst.
“As credit card companies face rising public anger, new regulation from Washington and staggering new rates of default and bankruptcy, FRONTLINE correspondent Lowell Bergman investigates the future of the massive consumer loan industry and its impact on a fragile national economy.”
THE FIGHT OVER INTERCHANGE FEES: “Interchange fees are now the central issue in what is being called the largest private antitrust litigation in U.S. history. Five years ago, Mitch Goldstone, an independent owner of scanmyphotos.com, an online photo service company, was struggling to keep his Southern California shop afloat. He began scrutinizing every expense and revenue stream of his small business. When he realized that an already costly expense — interchange fees – was increasing, he was livid. “It got to the point where I had just a few employees and things were looking really bleak,” said Goldstone. “Interchange fees were the one expense that was going up, no matter what I did.” In 2005, Goldstone (PDF) and more than 30 other merchants filed antitrust lawsuits in U.S District Court against Visa, MasterCard and several of their member banks, accusing them of breaching federal antitrust law by fixing the prices on interchange fees.”
As credit card companies face rising public anger, new regulation from Washington and staggering new rates of default and bankruptcy, FRONTLINE correspondent Lowell Bergman investigates the future of the massive consumer loan industry and its impact on a fragile national economy.
In The Card Game, a follow-up to the Secret History of the Credit Card and a joint project with The New York Times airing Tuesday, Nov. 24, 2009, at 9 P.M. ET on PBS (check local listings), Bergman and the Times talk to industry insiders, lobbyists, politicians and consumer advocates as they square off over attempts to reform the way the industry has done business for decades.
“The card issuers could do anything they want,” Robert McKinley, CEO of CardWeb.com, tells FRONTLINE of the industry’s unchecked power over consumers. “They could change your interest rate. They could impose an annual fee. They could close your account.” High interest rates along with more and more penalty fees drove up profits for the industry, Bergman finds, as the banks followed the lead of an aggressive upstart: Providian Bank. In an exclusive interview with FRONTLINE, former Providian CEO Shailesh Mehta tells Bergman how his company successfully targeted vulnerable low-income customers whom Providian called “the unbanked.”
“They’re lower-income people-bad credits, bankrupts, young credits, no credits,” Mehta says. Providian also innovated by offering “free” credit cards that carried heavy hidden fees. “I used to use the word ‘penalty pricing’ or ’stealth pricing,’” Mehta tells FRONTLINE. “When people make the buying decision, they don’t look at the penalty fees because they never believe they’ll be late. They never believe they’ll be over limit, right? … Our business took off. … We were making a billion dollars a year.”
It took the economic collapse in the fall of 2008 to set the stage for potentially historic change in the consumer credit business. President Obama and his team pushed through a credit card reform bill in May, and they’re now looking to establish a new Consumer Finance Protection Agency. But the banking and financial services industries contribute huge amounts of money to Congress — and the jury is still out on whether the new regulations can pass. “It’s a step in the right direction, but it’s a modest step,” says Harvard law professor Elizabeth Warren. “It’s a set of very discrete new laws. And the credit industry instantly set to work on how they could run around them. By itself, that set of rules won’t change the game.”
“It’s hard for them to get a bill through the U.S. Senate when the industry is pouring money into Washington,” says Martin Eakes of the Center for Responsible Lending of the banks’ political clout. “As Sen. [Dick] Durbin from Chicago recently said, ‘The banks, even as unpopular as they are right now in this crisis, still own this place.’”
The Card Game is a FRONTLINE co-production with Cam Bay Productions and The New York Times. The film is written and produced by Lowell Bergman and Oriana Zill de Granados. The correspondent is Lowell Bergman. FRONTLINE is produced by WGBH Boston and is broadcast nationwide on PBS. Funding for FRONTLINE is provided through the support of PBS viewers. Major funding for FRONTLINE is provided by The John D. and Catherine T. MacArthur Foundation. Additional funding is provided by the Park Foundation. FRONTLINE is closed-captioned for deaf and hard-of-hearing viewers and described for people who are blind or visually impaired by the Media Access Group at WGBH. FRONTLINE is a registered trademark of the WGBH Educational Foundation. The executive producer of FRONTLINE is David Fanning.
Recommend: retailers and merchants urged to ask Sen Dodd to include interchange fee reform in banking bill, here is how:
The voice from actual constituents for each Banking Committee member can make a difference. Explain and personalize why merchant interchange “swipe” fees are an unfair and a hidden tax. Ask why the rates in the U.S. are three-time that of other industrialized nations and urge that among any credit card reform is that interchange fees be included. Write letters to the editor. Make sure your lawmakers and local media know the facts about interchange fees and how much they are costing retailers and consumers [unfaircreditcardfees.com].
Stop Unfair Credit Card Fees
Tell Your Elected Representatives To Act On Interchange Fees
Credit card fees known as interchange are hidden in the cost of nearly everything consumers buy. In 2008 alone, American consumers paid over $48 billion in credit card interchange fees. Even consumers who don’t use plastic pay more through higher prices. Visa issuers collectively set credit card interchange fees in secret and MasterCard issuers separately do the same. The fees can’t be negotiated and are not adequately disclosed to merchants or consumers.
Tell your elected representatives to stop the price-fixing by the credit card industry by providing an open and transparent process to negotiate credit card interchange fees.
Send your message now.
Who to reach on the Banking Committee:
Majority Members
Chris Dodd (D-Conn); Hartford Office: 30 Lewis Street, Suite 101, Hartford, CT 06103; Tel: (860) 258-6940 Fax: (860) 258-6958
Tim Johnson (D-SD); Banking Legislative Assistant (LA) Laura Swanson, Email: laura_swanson@johnson.senate.gov, Sioux Falls Office: 5015 South Bur Oak Place, Sioux Falls, SD 57108; Tel: (605) 332-8896 Fax: (605) 332-2824
Jack Reed (D-RI); Banking LA: Kara Stein
Email: kara_stein@reed.senate.gov; Providence Office: U.S. Federal Court House, One West Exchange Street, Room 408, Providence, RI 02903; Tel: (401) 528-5200 Fax: (401) 528-5242
Evan Bayh (D-IN); Banking LA: Ellen Chube, Email: Ellen_Chube@Bayh.senate.gov, Indianapolis Office: West Market Tower, 10 West Market Street, Suite 1650, Indianapolis, IN 46204; Tel: (317) 554-0750 Fax: (317) 554-0760
Bob Menendez (D-NJ), Banking LA: Michael Passante, Email: Michael_passante@menendez.senate.gov; Newark Office: One Gateway Center, 11th Floor, Newark, NJ 07102-5257; Tel: (973) 645-3030 Fax: (973) 645-0502
Daniel Akaka (D-HI), Banking LA: Matt Pippin
Email:matt_pippin@akaka.senate.gov; Honolulu Office: Prince Kuhio Federal Building, 300 Ala Moana Boulevard, Room 3-106, Honolulu, HI 96850 P.O. Box 50144, Honolulu, HI 96850; Tel: (808) 522-8970 Fax: (808) 545-4683
Sherrod Brown (D-OH), Banking LA: Patrick Johnson, Email: patrick_johnson@brown.senate.gov; Cleveland Office: 1301 East Ninth Street, Suite 1710, Cleveland, OH 44114, Tel: (216) 522-7272 Fax: (216) 522-2239
Jon Tester (D-MT), Banking LA: Jason Rosenberg, Email: Jason_rosenberg@tester.senate.gov; Helena Office: Capital One Center, 208 North Montana Avenue, Suite 202, Helena, MT 59601; Tel: (406) 449-5401 Fax: (406) 449-5462
Herb Kohl (D-WI), Banking LA: Hilary Swav
Email: Hilary_swav@kohl.senate.gov, Madison Office: 14 West Mifflin Street, Suite 207, Madison, WI 53703; Tel: (608) 264-5338 Fax: (608) 264-5473,
Mark Warner (D-VA), Banking LA: Nathan Steinwald, Email: Nathan_steinwald@warner.senate.gov; Richmond Office: 919 East Main Street, Suite 630, Richmond, VA 23112, Tel: (804) 775-2314 Fax: (804) 775-2319
Jeff Merkley (D-OR), Banking LA: Andrew Green, Email: Andrew_green@merkley.senate.gov; Portland Office: One World Trade Center, 121 SW Salmon Street, Suite 1400, Portland, OR 97204 P.O. Box 29136, Portland, OR 97296, Tel: (503) 326-3386 Fax: (503) 326-2900
Michael Bennet (D-CO), Banking LA: Brian Appel, Email: brian_appel@bennet.senate.gov, Denver Office: 2300 15th Street, Suite 450, Denver, CO 80202, Tel: (303) 455-7600 Fax: (303) 455-8851
Minority Members
Richard C. Shelby (R-AL), Banking LA: Graham Smith, Email: graham_smith@shelby.senate.gov; Birmingham Office: Robert S. Vance Federal Building, 1800 Fifth Avenue North, Room 321,
Birmingham, AL 35203, Tel: (205) 731-1384 Fax: (205) 731-1386
Bob Corker (R-TN), Banking LA: Courtney Geduldig, Email:courtney_geduldig@corker.senate.gov; Memphis Office: 100 Peabody Place, Suite 1125, Memphis, TN 38103, Tel: (901) 683-1910 Fax: (901) 575-3528
Jim DeMint (R-SC), Banking LA: Hap Rigby
Email: hap_rigby@demint.senate.gov; Columbia Office: 1901 Main Street, Suite 1475, Columbia, SC 29201, Tel: (803) 771-6112 Fax: (803) 771-6455
Kay Bailey Hutchison (R-TX), Austin Office:Federal Building, 300 East Eighth Street, Suite 961, Austin, TX 78701; Tel: (512) 916-5834 Fax: (512) 916-5839
Mike Crapo (R-ID), Banking LA: Gregg Richard
Email: Gregg_richard@crapo.senate.gov, Boise Office: 251 E. Front St., Suite 205, Boise, ID 83702; Tel: (208) 334-1776 Fax: (208) 334-9044
Others: Re-election in 2010
Democrates Byron Dorgan (D-ND), Banking LA: Allen Huffman, Email: Allen_huffman@dorgan.senate.gov; Bismark Office: 312 Federal Building PO Box 2579, Bismarck, ND 58502; Tel: (701) 250-4618 Fax (701) 250-4484
Russ Feingold (D-WI), Milwaukee Office: 517 East Wisconsin Ave., Room 408, Milwaukee, WI 53202-4504; Tel: (414) 276-7282 Fax (414) 276-7284
Kristen Gillibrand (D-NY), Banking LA: Kevin Fink, Email: Kevin_fink@gillibrand.senate.gov; New York City Office: 780 Third Avenue, Suite 2601, New York, New York 10017;
Tel. (212) 688-6262, Fax (212) 688-7444
Blanche Lincoln (D-AR), Banking LA: Anna Taylor, Email: anna_taylor@lincoln.senate.gov; Little Rock Office: 912 West Fourth Street Little Rock, AR 72201, Tel: (501) 375-2993 Fax (501) 375-7064
Harry Reid (D-NV), Banking LA: Mark Wetjen
Email: mark_wetjen@reid.senate.gov; Las Vegas Office: Lloyd D. George Building 333 Las Vegas Boulevard South, Suite 801 Las Vegas, NV 89101; Tel: (702)388-5020, Fax: 702-388-5030
Republicans
Chuck Grassley (R-IA), Banking LA:Kathy Nuebel Kovarik, Email: Kathy_nuebel@grassley.senate.gov; Des Moines Office: 721 Federal Building 210 Walnut Street Des Moines, IA 50309; Tel: (515) 288-1145 Fax: (515) 288-5097
Johnny Isakson (R-GA), Banking LA: Chris Cook; Email: chris_cook@isakson@senate.gov; Atlanta Office: One Overton Park, Suite 970 3625 Cumberland Blvd, Atlanta, GA 30339; Tel: (770) 661-0999, Fax: (770) 661-0768
Dick Lugar (R-IN), Banking LA: Kylin McCardle
Email: kylin_mccardle@lugar.senate.gov; Indianapolis Office: 10 West Market St Suite 1180, Indianapolis,IN 46204, Tel: (317) 226-5555, Fax: (317) 226-5508
Olympia Snowe (R-ME), Banking LA: Matthew Berger, Email: matthew_berger@sbc.senate.gov; Portland Office: 3 Canal Plaza Suite 601 Portland, ME 04101, Tel: (207) 874-0883, Fax: (207) 874-7631
Susan Collins (R-ME), Banking LA: Mark LeDuc, Email: mark_leduc@hsgac.senate.gov; Portland Office: One Canal Plaza Suite 802 Portland, ME 04101; Tel: (207) 780-3575
George Voinovich (R-OH), Banking LA: Jan Elizabeth Fowler, Email: Jan¬_fowler@voinovich.senate.gov; Cleveland Office: 1240 East 9th Street Room 3061 Cleveland, OH 44199, Tel: (216) 522-7095, Fax: 522-7097
WASHINGTON–(BUSINESS WIRE)–The National Retail Federation today warned Congress that credit card companies are in an “arms race” to increase the $48 billion in “swipe” fees paid by merchants and their customers each year, and urged passage of legislation that would put rules governing the fees under the jurisdiction of the Federal Trade Commission.
“There is an arms race to create cards with higher fees and more bells and whistles,” NRF Senior Vice President and General Counsel Mallory Duncan said. “The market checks that would normally exist to curb this escalation in fees are diminished because the card companies know that every merchant is required to take these expensive new cards or lose their ability to accept any cards. The Welch-Shuster bill would allow the most expensive cards to be refused, and while we expect that few merchants would actually refuse cards if this were passed, it would make the card companies think before they reflexively introduce cards with higher fees.”
“Most consumers don’t know it, but every time they swipe a rewards card with its miles and concierge services, they are driving up the price of everything they buy even higher,” Duncan said. “This particularly hurts less-privileged Americans who don’t have rewards cards or can’t get cards at all because Visa and MasterCard rules effectively require that everyone pay the credit card price even if they are paying with cash, check, debit card or even food stamps.”
“There is no regulator that reviews whether credit card company rules are unfair, deceptive or anticompetitive,” Duncan said. “This legislation would deal with this absence of oversight by directing the Federal Trade Commission to review card company rules and prohibit practices that meet that description. That is the minimum level of protection that this market needs to begin to function properly.”
Duncan testified before the House Financial Services Committee today during a hearing on H.R. 2382, the Credit Card Interchange Act of 2009, sponsored by Representative Peter Welch, D-Vt., and co-sponsored by Representative Bill Shuster, R-Pa. The bill would require credit card companies to disclose interchange rates, terms and conditions, and give the Federal Trade Commission authority to review interchange and prohibit any practices that violate consumer protection or anti-competition laws. Merchants would be allowed to give cash discounts and set minimum credit card purchase amounts, and could choose which credit cards to accept.
Interchange is a fee averaging 2 percent that Visa and MasterCard banks charge merchants each time one of their credit cards is swiped to pay for a purchase. But Duncan explained to the committee that the rate can range from as low as about 1.5 percent for an ordinary card to 3 percent or more for “gold” and “platinum” cards that offer rewards like travel miles or concierge services. In recent years, card companies have created an escalating series of rewards cards – each carrying more rewards but also higher fees – and “upgraded” millions of consumers. The higher-fee cards can’t be turned down by merchants because of Visa and MasterCard’s “Honor All Cards” rule. The practice, along with marketing that has pushed the use of plastic and introduced cards into new areas like taxis, has helped triple interchange revenue from the $16 billion collected when NRF began tracking the fees in 2001 to the $48 billion collected last year.
Visa and MasterCard rules effectively force merchants to pass the fees on to consumers by requiring them to be included in the advertised price of merchandise and making cash discounts difficult. The result is that the average household paid an estimated $427 in higher prices last year, up from $159 in 2001.
Merchants have long sought to offer cash discounts, but Duncan said an amendment to this spring’s credit card reform bill that would have blocked credit card companies from interfering with that ability was met with “howls of protest’ from the card industry and was not included in the final measure.
The National Retail Federation is the world’s largest retail trade association, with membership that comprises all retail formats and channels of distribution including department, specialty, discount, catalog, Internet, independent stores, chain restaurants, drug stores and grocery stores as well as the industry’s key trading partners of retail goods and services. NRF represents an industry with more than 1.6 million U.S. retail establishments, more than 24 million employees – about one in five American workers – and 2008 sales of $4.6 trillion. As the industry umbrella group, NRF also represents more than 100 state, national and international retail associations. www.nrf.com.
Americans for Financial Reform adopts official position to reform deceptive credit card interchange practices.
[repost from NACSOnline]
WASHINGTON – Americans for Financial Reform, a group of about 200 national and state organizations that support reform to our nation’s current financial sector, announced its support this week to reform credit card industry practices.
The group released a position paper that outlines its members concerns and support for legislative action that would bring transparency and fairness to a broken system — particularly hidden “swipe fees” (interchange fees) “paid by all Americans, regardless of whether they use credit, debit, checks or cash.”
The group writes:
“Swipe fees have grown at a staggering pace — from about $16 billion in 2001 to about $48 billion in 2008. This is a clear sign of a broken market. Not only do these huge fees injure consumers by inflating the cost of goods and services, they create incentives for banks to view credit and debit cards as fee engines. It is not coincidence that consumer-side fees such as late fees, over-limit fees, overdraft fees and others have seen rapid increases during the last several years, just as swipe fees have exploded. Seeing the potential income from fees has made banks’ business models develop such that they often view their customers as fee-generating machines. These business models have dictated the proliferation of cards and incentives for increased card use without appropriate attention to the risks that consumers might not have the ability to repay the debts they incur on these cards.
“And unfortunately, those credit card swipe fees continue to accelerate, because there is nothing — no marketplace or competitive force — to restrain Visa and MasterCard from charging consumers and merchants more, even though technological advances should have reduced the cost of providing the services. So, not surprisingly, these fees have been skyrocketing.
“There are two essential elements to a competitive marketplace: information and choice. Accurate and transparent information is necessary for consumers to make accurate choices. When information is readily available consumers can make choices, effectively compelling firms to compete for their purchases. And choice is a necessary element too. Absent choice, the discipline of the market will be lost. The credit card market lacks both choice and adequate information. From a consumer’s perspective, it lacks choice because it is an oligopolistic market in which a small set of card issuers dominate the market and establish a set of hidden practices that increase consumer costs.
“Markets don’t work when there are hidden fees and rules — and no one hides fees and rules better than the credit card companies. Credit card markets lack the information necessary for both consumers and merchants to make informed choices. For merchants, the markets lack adequate information because the associations prevent merchants from accurately informing consumers of the costs of credit card acceptance or attempting to direct them to more efficient and lower priced payment mechanisms. In fact, merchants have no alternative but to accept the card associations’ cards even when the associations significantly increase prices.
“Credit card industry practices must be reformed in order to deal with these market failures and the resulting injury to consumers. Transparency and market forces are needed to check the growth of unjustifiably high swipe fees. Consumers have a right to know the amount of the swipe fees charged in conjunction with their transactions. Merchants too must be given information about the type of card that they are receiving at the point of sale and the corresponding interchange fees. In addition, the Visa and MasterCard operating rules that dictate how the credit and debit card systems operate must be provided to a regulator that, in turn, makes those materials public for everyone to see and analyze.
“Visa and MasterCard rules that are unfair, deceptive, or anticompetitive must also be abolished. These practices harm consumers by increasing the cost of goods and services and by preventing retailers from offering or encouraging the use of lower cost payment options. This process should start with providing a strong regulatory agency, such as the Federal Trade Commission (or Consumer Financial Protection Agency) the power to review the Visa and MasterCard rules and prohibit any it finds to violate these tenets that govern transactions throughout our economy. Additionally, specific, anticompetitive rules must be overturned immediately to allow merchants to do the following:
Provide consumers with discounts for using cheaper credit or debit cards or other forms of payment that are cheaper such as cash and checks. The credit card networks and banks should not be able to limit how these discounts are displayed or advertised by merchants. Ensuring that merchant pricing is accurate and clear is the role of state consumer protection laws. Banks do not limit merchant pricing displays to protect consumers — they do it to prevent competition in the market and prevent transparency in their fees.
Communicate merchant preferences among payment types to consumers. The “honor all cards” rule that requires merchants to accept every card Visa or MasterCard creates — no matter how high they set the fees for that card — should not stand.
Accept certain cards at some merchant sites, rather than at all locations, and set minimum or maximum purchase size limits for transactions involving a card.
“A large set of organizations are working together to advance our common interest in an accountable, transparent and secure financial system, and to accomplish our shared policy goals. Because the organizations involved and the issues addressed are diverse, not every organization works on or has a policy position on every specific issue. We are unanimous in our call for change to repair our nation’s broken financial system, establish integrity in the financial markets, and facilitate productive economic activity that benefits all segments of our communities.”
Electronic Payments Coalition, the group funded by Visa Inc., MasterCard Worldwide and the major banks and credit card issuers (payment card networks and financial services companies) just issued this press release. Click here.
We disagree with it, including this key point: The problem with cash discounts is that they don’t allow for different prices depending on the type of payment card used. There are about one-hundred separate merchant interchange fees and it is nearly impossible to know what the cost is for each transaction. In other words, they prevent Visa and MasterCard from competing over the cost of acceptance. The same principle applies to the honor-all-cards rules, which prevent merchants from exercising a preference for lower-cost cards, thereby preventing competitive forces from placing downward pressure on interchange fees. Not to mention the condescending, patronizing attitude that credit card companies know better than merchants how to treat a merchant’s customers.
—————-
PRNewswire release
Merchants Can Already Discount for Cash, But Don’t – So What Would H.R. 2382 Really Do?
Electronic Payments Coalition Unveils the Truth About Rep. Peter Welch’s Interchange Bill
WASHINGTON, Oct. 7 /PRNewswire/ — In advance of the October 8th hearing in the House Financial Services Committee on H.R. 2382, “The Credit Card Interchange Fees Act,” sponsored by Rep. Peter Welch (D-VT), the Electronic Payments Coalition has issued the following statement:
“H.R. 2382 is one of the most egregious assaults on consumer protection that this country has seen in some time. Disguised as a measure to allow for cash discounts – something that is already allowed by federal law and by all card network contracts – the bill would instead open up the door for bait-and-switch advertising schemes, charging additional checkout fees at the register, and discrimination against certain card holders. The bill is chock full of provisions that mean one thing: consumers will pay more so merchants can pay less. Bottom line – retailers don’t want to pay their fair share for a service that brings them more sales and higher profits – and want their customers to pick up the tab instead.”
The Electronic Payments Coalition released today a document detailing the anti-consumer protection measures detailed in H.R. 2382. This document follows this statement.
Rep. Peter Welch’s H.R. 2382 – “The Credit Card Interchange Fees Act” – would…
Leave consumers vulnerable and unprotected against deceptive, bait-and-switch advertising.
Rep. Welch’s legislation would eliminate important consumer protections on how merchants are allowed to advertise their prices – restrictions that are in place expressly to protect consumers. This would allow retailers to promise one low price, then charge more – potentially a lot more – when the customer reaches the cash register. Consumers would be left unprotected, forced to pay the demanded price regardless of what was advertised – and retailers would profit unjustly from their dishonest schemes.
Leave consumers stranded at the checkout counter.
Imagine getting to the front of a long line at the grocery store, only to discover that the store doesn’t accept your alma mater’s credit card. Or they won’t accept the card that donates a few cents of every purchase to your favorite charity. This legislation allows merchants to pick and choose which cards they will accept – and which cards they won’t – with no advance warning to their customers.
Dramatically reduce – or eliminate – the card rewards programs that are used by 80% of American households.
H.R. 2382 would prohibit a slightly higher interchange rate for rewards cards – cards that are traditionally used by customers who are proven to spend more when they shop, in turn providing greater value to merchants. Unfortunately, merchants don’t want to pay for this benefit – and the result would be far fewer rewards for American consumers who value such programs. In fact, similar regulation in Australia has resulted in a 23% reduction in the value of rewards programs for consumers.”
Force businesses to disclose highly confidential financial information to the public and to their competitors.
H.R. 2382 would require every contract, rate agreement, and rule on merchant discount rates to be submitted to the Federal Reserve, which would then be responsible for publishing every bit of it. This would involve literally millions of documents, most containing highly sensitive financial information. The chaos that would result from the sheer volume of contracts – not to mention the compromised financial information – would be incredibly harmful to retailers and to financial institutions.
Falsely characterize interchange as a consumer fee, by requiring that it be disclosed on consumer statements.
It’s simple: consumers don’t pay for the cost of card acceptance. It’s a cost of doing business for merchants that accept cards. Despite this clear distinction, H.R. 2382 would force card issuers to print the amount of interchange, as well as the total amount various merchants paid for each charge – an amount that varies depending on what each merchant negotiated – on consumer’s credit or debit card statements. This is nonsensical, unrealistic, and would ultimately confuse consumers and the financial decisions they make.
About Electronic Payments Coalition
The Electronic Payments Coalition (EPC) includes credit unions, banks, and payment card networks that move electronic payments quickly and securely between millions of merchants and millions of consumers across the globe. EPC’s goal is to protect the value, innovation, convenience and competition in today’s growing electronic payments system. EPC educates policymakers, consumers, and the media on the system’s role economic growth, and the importance of protecting consumer choice and stability for the continued growth of global commerce. http://electronicpaymentscoalition.org/
Andrew Martin at The New York Times wrote (p. 1 Oct 6th) about the latest credit card prepaid pricing tricks. Of extra interest is the photo showing several prepaid “debit” cards and all challenge the results of the earlier MasterCard and Visa settlement; the “debit” cards are indistinuishable from traditional credit cards, other than the cleverly hidden word “debit.”
The MiCash Prepaid MasterCard docks cardholders a $9.95 activation fee. Like many competitors, it then charges numerous recurring fees, including $1.75 for each A.T.M. withdrawal, $1 for each A.T.M. balance inquiry, 50 cents for each purchase, $4 for monthly maintenance, $2 for inactivity after 60 days and $1 for a call to customer service.
The Millennium Advantage Prepaid MasterCard goes further, listing an application fee of up to $99. The Silver Prepaid MasterCard advertises that it does not charge for overdrafts as many debit cards do, but it gives itself the option of charging a $25 shortage fee if customers exceed their balance.
WASHINGTON – On Thursday, the U.S. House Financial Services Committee will hold a hearing on a financial bill that limits fees credit card companies charge merchants, TheHill reports. In recent weeks, both retailers and card companies have been lobbying Congress about interchange fees.
Reps. Peter Welch (D-VT) and Zoe Lofgren (D-CA) sponsored a bill that would clamp down on interchange fees. On Wednesday, Welch came to a rally with NACS and 7-Eleven store operators, which had collected 1.6 million signatures on petitions supporting the new restrictions.
On the flip side, card companies argue that the measure is not at all about protecting small retailers. “The big-box retailers, hiding behind some of the convenience-store folks, want to use the electronic payment system for free, which is ridiculous when they get higher sales, convenience from having to deal with cash, guaranteed payment for their services and products, and all the risk associated with credit cards gets passed onto the financial institutions,” said Dan Berger, executive vice president of the National Association of Federal Credit Unions.
NACS urges retailers to contact Committee members and plead their case before the hearing.
The House Financial Services Committee has scheduled a hearing for Oct. 8 to receive testimony on the Credit Card Interchange Fees Act (H.R. 2382), NACS reported.
This legislation, introduced by Reps. Peter Welch (D-VT) and Bill Shuster (R-PA), would begin to change many of rules imposed on merchants by the credit card companies.
In preparation for the hearing, NACS is stressing that it is important for members of the Committee to understand the effect credit card company policies and rates have on your business and is urging retailers with operations in districts represented by House members serving on this Committee to contact these legislators and ensure they understand the importance of this legislation to your business.
Visit the Financial Services Committee’s Web site to see which representatives serve on this Committee. You can contact these members by calling the Capitol Switchboard at (202) 224-3121.
H.R. 2382 aims to prohibit anti-competitive practices, which are banned through contracts merchants sign with Visa and MasterCard.
“NACS believes that these are fundamental rights that ensure an open, competitive market and should not be able to be limited by the credit card companies. These include, but are not limited to, additional charges for premium cards or access devices, pricing display restrictions, ‘honor all cards’ rule, and reason code 96 chargebacks,” the association noted.
In addition the legislation aims to disclose rules that provide the FTC authority to eliminate anti-competitive rules, requiring the credit card companies to disclose all terms, rates and conditions to the FTC and allows the FTC review and determine if practices are anti-competitive; requires full disclosure of interchange and other fees collected from merchants to the fed and the public; and requires the full disclosure of interchange or other merchant-paid fees to customers.
Follow @WayTooHigh on Twitter. Archive of rently posted Tweets.
WayTooHigh
American consumers and merchants pay more for credit card interchange fees than consumers and retailers in other industrialized economies6 minutes ago from HootSuite
Merchants don’t mind paying fair share of credit card interchange fees, that amount is ~13% of the fee we (consumers) are FORCED to payabout 6 hours ago from HootSuite
Chase and Wells Fargo cut debit card overdraft fees overdrawn by JUST $5 or less. Not very pro-consumerabout 8 hours ago from HootSuite
O.C. 7-Eleven franchisee takes credit-card fee battle to D.C. http://ow.ly/r9VUabout 18 hours ago from HootSuite
Priceless: The Case That Brought Down The Visa/MasterCard Bank Cartel Book Review & Giveaway http://ow.ly/r8bT4:31 PM Sep 25th from HootSuite
Shares of Visa (NYSE: $V) and Mastercard (NYSE: $MA) are both down over 4% today on concerns regarding potential government legislation4:29 PM Sep 25th from HootSuite
Our most clicked on Tweet today: U.S. Sen. Dodd Pushes for Interchange Fee Reform (NACSOnline) http://ow.ly/r8424:12 PM Sep 25th from HootSuite
Banks and MasterCard and Visa are feeling the heat, but they are masters in manipulating Congress4:01 PM Sep 25th from HootSuite
MUST SEE: Michael Moore’s “Capitalism: A Love Story” banks created virtual casino. http://ow.ly/r7YJ4:00 PM Sep 25th from HootSuite
Credit card companies reached tipping point for excessive fees. Happy 5-year legal battle is being noticed.3:59 PM Sep 25th from HootSuite
Scam to swindle merchants out of ~2% sales payable for antiquated credit card processing fees out of control 6X other nation’s fees.3:58 PM Sep 25th from HootSuite
Banks will be hit hardest from loss of interchange fees, but, remember member banks (1000s) co-own ~50% of $V $MA #Visa#MasterCard3:50 PM Sep 25th from HootSuite
Credit Card shares FALL; Gov’t talks on merchant interchange fees. MasterCard fell 4.8% ( $204.70), Visa dropped 3.9% ($70.66)3:47 PM Sep 25th from HootSuite
No surprise. In the $V and $MA IPO SEC filings, but warned “insolvency” possible if our merchant interchange suit is successful3:45 PM Sep 25th from HootSuite
Bank of America urges federal judge to dismiss the U.S. SEC’s complaint accusing it of misleading shareholders about bonuses [why?]3:38 PM Sep 25th from HootSuite
Credit Card Fees Have Retailers Ready for War – http://bit.ly/WBVub2:24 PM Sep 25th from web
“Credit Card Fees Have Retailers Ready for War” [Agree, I've been at war, suing MasterCard, Visa and banks for 5 yrs]. http://ow.ly/r7fB2:22 PM Sep 25th from HootSuite
The Electronic Payments Coalition issued the following statement: (funded by banks, who trusts banks anymore?!) http://ow.ly/qcBf10:50 AM Sep 25th from HootSuite
RT @miaminewsnow: Major Banks Changing Overdraft Fee Rules: When Congress began to debate and credit card reform .. http://bit.ly/IxXQS10:16 AM Sep 25th from HootSuite
Frank backs Rep. Ron Paul’s Fed audit bill – MarketWatch – http://bit.ly/iMH6h6:56 AM Sep 25th from web
RT @glcspdn: CSP Daily News: 7-Eleven taking 1.6 million “Stop Unfair Credit Card Fees” consumer signatures to D.C. http://bit.ly/10HTxQ6:39 AM Sep 25th from HootSuite
As Washington remedies unfair credit card interchange fees, the hundreds of billions in prior years’ charges need to be returned too6:38 AM Sep 25th from HootSuite
“Dodd Will Push To Control Bank Fees For Merchants” (via Kenneth R. Gosselin, Hartford Courant): http://ow.ly/r1Q86:17 AM Sep 25th from HootSuite
U.S. Sen. Dodd Pushes for Interchange Fee Reform (NACSOnline) http://ow.ly/r1MT6:12 AM Sep 25th from HootSuite
Will those banks changing the debit card overdraft fees make it retroactive and REFUND the billions in unfair overcharges?4:54 PM Sep 24th from HootSuite
Senator Chris Dodd is right: “the [credit card] system has gotten completely out of wack.”11:26 AM Sep 24th from HootSuite
Phony consumer-friendly banking overdraft rules. will get fees from other services [interchange raises?], or end when heat is off?10:26 AM Sep 24th from HootSuite
Credit card co’s charging GIANT hidden tax on consumers. Overdraft a debit card = PAY BIG BUCKS: http://ow.ly/kJHb10:15 AM Sep 24th from HootSuite
Report: Nine Scientifically Proven Ways to Get Retweeted on Twitter [via Fast Company] http://ow.ly/qS879:35 AM Sep 24th from HootSuite
U.S. credit card interchange fees ~2X rates in UK, New Zealand. ~4X rates in Australia. ~6X cross border MasterCard rates in the EU9:20 AM Sep 24th from HootSuite
The bank’s “overdraft protection” policy is to PROTECT their balance sheets with unbridled greed at expense of consumers9:19 AM Sep 24th from HootSuite
credit card issuers curbing usurious overdraft policies raises larger question. Where’s the refund for decades of abuse?9:17 AM Sep 24th from HootSuite
Exactly as we said. The banks will use the shift in debit card overdraft fees as marketing tool; See FULL PAGE NYT’s (9/24 p A5) Chase ad.9:13 AM Sep 24th from HootSuite
Way to go JPMorgan Chase – 1 day after heat from usurious ~3500% annualized overdraft fee rates, they advertise a change9:12 AM Sep 24th from HootSuite
Cavalcade of credit card company tricks continues. Wells Fargo cuts overdraft debit card fees due to criticism9:08 AM Sep 24th from HootSuite
How to INSTANTLY save $125,000,000,000 ($125 billion) – take control of credit card interchange “swipe” fees7:15 AM Sep 24th from HootSuite
Citigroup Inc. and Bank of America Corp. each received $45 billion in U.S. Gov’t TARP funds and have yet to repay it10:22 PM Sep 23rd from HootSuite
NICE REACTION TO OUR EARLIER TWEET: BofA refunds 1 person’s debit card overdraft fees AFTER NBCNews how about for EVERYONE http://ow.ly/qNLD7:50 PM Sep 23rd from HootSuite
RT @jordancrowder: @BofA_help Now BOfA charging me overdraft protection on my CC for a service that didnt protect me in the first place!3:32 PM Sep 23rd from HootSuite
WATCH OUT. curtailing debit card overdraft fees is nothing more than a marketing gimmick, look out for higher fees elsewhere3:22 PM Sep 23rd from HootSuite
Nice to see that people are catching onto how the credit card issuers play their game, lower one fee, RAISE OTHERS3:21 PM Sep 23rd from HootSuite
Candice Choi at AP wrote: “Where will banks make up lost overdraft fees?” [Answer: INTERCHANGE FEES] – http://ow.ly/qLIM2:34 PM Sep 23rd from HootSuite
The Mirror Image: Health Insurance and Credit Card Companies (video) http://ow.ly/qLCH2:23 PM Sep 23rd from HootSuite
Think the $38,000,000,000 in bank overdraft fees last year was high? Merchange interchange change credit card fees ~DOUBLE THAT!2:15 PM Sep 23rd from HootSuite
Ron Lieber wrote in the NYT’s that JPMorgan Chase and Bank of America have overhauled their debit card overdraft fees. http://ow.ly/qHmG11:06 AM Sep 23rd from HootSuite
Rulings against Visa and MasterCard in New Zealand are foreshadow of how deeply both credit card associations may fall in U.S.11:00 AM Sep 23rd from HootSuite
Priceless: The Case that Brought Down the Visa/MasterCard Bank Cartel by Lloyd Constantine http://ow.ly/peWk10:55 AM Sep 23rd from HootSuite
@ronlieber – Thanks for your NYT’s article on overdraft fees. I added commentary here: http://ow.ly/qHka. Mitch Goldstone 949-474-765410:09 AM Sep 23rd from HootSuite
Banks Revise Overdraft Debit Card Fees, Why Not Interchange Fees Too? http://ow.ly/qHka8:54 AM Sep 23rd from HootSuite
Bank of America refunds all debit card overdraft fees AFTER NBC News segment for one person, how about for EVERYONE? http://ow.ly/pnK77:55 AM Sep 23rd from HootSuite
When consumers say retailers should pay the cost of accepting credit and debit cards, don’t they know THEY ultimately ARE!7:40 AM Sep 23rd from HootSuite
Credit card companies once looked for reasons to keep account balances high are reshaping images as proponents of responsible money mgmt7:05 PM Sep 22nd from HootSuite
Charge-offs+delinquencies are rising as unemployed credit-card holders are falling behind. Interchange revenues declining http://ow.ly/qAHQ4:41 PM Sep 22nd from HootSuite
The press release FLUFF announcing the $$$ “Chase Sapphire” credit card FAILS to mention HIGHER interchange fee costs – http://ow.ly/kH0G10:20 AM Sep 22nd from HootSuite
MORE UNFAIR CREDIT CARD FEES: Banks charging $35 for a cup of coffee (via NYT’s editorial 8/20) http://ow.ly/kJC510:05 AM Sep 22nd from HootSuite
Join Mitch Goldstone (ScanMyPhotos.com) and other photo imaging industry execs in Cologne, Germany (Oct 21-22) http://ow.ly/q6Hi8:20 AM Sep 22nd from HootSuite
Q: Why should retailers be taken on a ride when affinity reward credit cards R used? A: Consumers ultimately pay = NO FREE REWARDS7:35 AM Sep 22nd from HootSuite
FEES charged by airlines to process credit card payments are excessive, disproportionate to the cost of the transactions http://ow.ly/quFJ7:34 AM Sep 22nd from HootSuite
Credit card surcharges disproportionate to true costs, airlines hitting passengers with hefty credit card booking fees http://ow.ly/qsDF4:49 AM Sep 22nd from HootSuite
“battle is brewing over the processing fees that banks charge merchants each time a customer uses a credit or debit card” http://ow.ly/pLYP10:40 AM Sep 21st from HootSuite
hidden cost of credit cards should be studied by Gov Accountability Office re effects of interchange fees on consumers7:38 AM Sep 21st from HootSuite
How to INSTANTLY save $125,000,000,000 ($125 billion) – take control of credit card interchange “swipe” fees7:15 AM Sep 21st from HootSuite
What Is “Interchange” [video: Electronic Payments Coalition] http://ow.ly/qcFw10:53 AM Sep 20th from HootSuite
Merchants don’t mind paying fair share of credit card interchange fees, that amount is ~13% of the fee we (consumers) are FORCED to pay10:39 AM Sep 20th from HootSuite
The Electronic Payments Coalition issued the following statement: (funded by banks, who trusts banks anymore?!) http://ow.ly/qcB910:36 AM Sep 20th from HootSuite
Think of how cool it would have been if Erin Brocovich had Twitter; used it as we are against nation’s lgst antitrust case in U.S. history10:33 AM Sep 20th from HootSuite
Fact: Visa and MasterCard STILL charge interchange fees, but they call that portion “Discount Fees” Where’s the Discount???10:31 AM Sep 20th from HootSuite
Visa and MasterCard say banks charge the interchange fees, but WHO OWNED 100% of Visa and MasterCard pre IPOs? BANKS!10:30 AM Sep 20th from HootSuite
Sen Chris Dodd, head of the Senate Banking Committee, plans to propose merger of 4 bank agencies into one super-regulator.6:35 AM Sep 20th from HootSuite
The issue with credit card interchange “swipe” fees is a ~$48 bln annual price-fixing overcharge. My Ecommerce biz FORCED to accept CCs5:35 PM Sep 19th from HootSuite
Emotional radio brodcast just after WWII from Germany – The Jewish Service Heard Round the World; YouTube: http://ow.ly/pZLf9:20 AM Sep 19th from HootSuite
When consumers say retailers should pay the cost of accepting credit and debit cards, don’t they know THEY ultimately ARE!7:28 AM Sep 19th from HootSuite
RT @BoycottBanks: Retail Credit Card Fees Much Higher in the USA….: Americans are being forced to pay significant.. http://bit.ly/1BJK2j7:24 AM Sep 19th from HootSuite
U.S. retailers pay credit-card fees up to six times greater than those paid by retailers in other countries, (MPC)7:21 AM Sep 19th from HootSuite
Electronic Payments Coalition (funded by MasterCard, Visa and credit card issuers) attacking its customers! http://ow.ly/pc3H4:30 PM Sep 18th from HootSuite
Other than illegal price-fixing, technology should have significantly led to MUCH lower merchant interchange credit card swipe fees1:05 PM Sep 18th from HootSuite
The U.S. pays approximately 60% of swipe fees globally – about double the U.S. percentage share of global GDP11:20 AM Sep 18th from HootSuite
Banks raked in an estimated $48 billion in swipe fees in 2008 – an average of $427 per American household in just one year.11:05 AM Sep 18th from HootSuite
Attorney Lloyd Constantine of Constantine Cannon has book coming out: “Priceless: The Case that Brought Down the Visa/MasterCard Bank Cartel10:55 AM Sep 18th from HootSuite
Hidden swipe fees cost Americans more than all credit card annual fees, cash advance fees, over-the-limit fees, and late fees combined10:20 AM Sep 18th from HootSuite
Interchange fees started out in the 1960s as a way for banks to cover the cost of processing credit card transactions10:02 AM Sep 18th from HootSuite
U.S. credit card interchange fees ~2X rates in UK, New Zealand. ~4X rates in Australia. ~6X cross border MasterCard rates in the EU8:20 AM Sep 18th from HootSuite
How to INSTANTLY save $125,000,000,000 ($125 billion) – take control of credit card interchange “swipe” fees7:02 AM Sep 18th from HootSuite
“battle is brewing over the processing fees that banks charge merchants each time a customer uses a credit or debit card” http://ow.ly/pLYB6:40 AM Sep 18th from HootSuite
Credit Card interchange fees around the world, why is the U.S. among the highest? (Merchants Payments Coalition) http://ow.ly/pWJa6:05 AM Sep 18th from HootSuite
Credit card interchange fees have more than TRIPLED in the amount collected in the past 8 years!5:05 AM Sep 18th from HootSuite
The same reckless, predatory lending practices that led to the sub-prime mortgage meltdown still prevail with credit cards (MPC)5:45 PM Sep 17th from HootSuite
@DebitPrepaid – We get retail customers insisiting debit cards be processed as credit cards to get benefits1:49 PM Sep 17th from web in reply to DebitPrepaid
Visa and MasterCard JUST aren’t getting the message. Other businesses are lowering costs, but them. Just got the bi annual increase letter1:40 PM Sep 17th from HootSuite
Bank of America “Keep The Change” Round-Up credit card program; another scheme to get more interchange fees? http://ow.ly/pS8p1:28 PM Sep 17th from HootSuite
Merchants Payments Coalition 2 release study today: European countries, Canada & New Zealand handle interchange fees http://ow.ly/pM0o10:45 AM Sep 17th from HootSuite
About 90% of all business in U.S. from sm biz, not giant chain stores. Ending merchant credit card fees benefit us little guys too.10:45 AM Sep 17th from HootSuite
All About the Visa and MasterCard Promotional Gift Card Scheme (repost) http://ow.ly/kdYg10:00 AM Sep 17th from HootSuite
More consumers using debit cards (50.4%) over all noncash sales (AP), but ScanMyPhotos.com and many merchants process it at higher CC rates9:55 AM Sep 17th from HootSuite
MasterCard Europe has promoted UK head of marketing Rita Broe to the position of group head of European marketing9:40 AM Sep 17th from HootSuite
“The Stimulus Didn’t Work” (WSJ John F. Cogan Opinion); Really? Why then is stock market at intra level HIGHS?!8:25 AM Sep 17th from HootSuite
Merchants also launched antitrust suit against the banks and credit cards in connection with interchange fees. [that's us] http://ow.ly/pOir7:50 AM Sep 17th from HootSuite
Janet Morrissey at TIME Mag writes that retailers ready to fight credit cards fees. We’re 5 yrs in already! http://ow.ly/pOgV7:48 AM Sep 17th from HootSuite
Visa Inc survey claims consumers want retailers to pay interchange fees, but THEY are ultimately the ones paying it! http://ow.ly/pO5r7:34 AM Sep 17th from HootSuite
Better question from Visa Inc funded survey is: “how do you feel about illegal, anticompetitive price-fixing?” http://ow.ly/pO3S7:31 AM Sep 17th from HootSuite
Not to laugh too loud, but you gotta read this Visa inc. commissioned survey – http://ow.ly/pO287:30 AM Sep 17th from HootSuite
SHAME on Visa, MasterCard, credit card companies for misguided effort to shift message from BANK GREED to chain store profiteering.7:00 AM Sep 17th from HootSuite
Merchants seek public’s support in fight with credit card issuers http://ow.ly/pMSt6:00 AM Sep 17th from HootSuite
Merchants Payments Coalition 2 release study today: European countries, Canada & New Zealand handle interchange fees http://ow.ly/pLZY3:33 AM Sep 17th from HootSuite
Retailers Battle Credit Card Fees – http://bit.ly/CwXD23:22 AM Sep 17th from web
Improved processing technology and the weak economy should be driving card-acceptance prices down6:54 PM Sep 16th from HootSuite
Gold Rises to 18-Month High on Inflation Concern, Weaker Dollar9:25 AM Sep 16th from HootSuite
ScanMyPhotos.com lowered rates over the years from $5 to under 5-cents, yet technology isn’t playing role in record credit card fees9:10 AM Sep 16th from HootSuite
More credit card merchant interchange fee INCREASES in the works for early fall. NO JUSTIFICATION other than greed, exploiting new laws.7:50 AM Sep 16th from HootSuite
Every time you charge your Big Gulp at 7-Eleven, a credit card company swallows part of the profit. http://ow.ly/ifsX6:05 PM Sep 15th from HootSuite
Buy a restaurant gift card and ZERO added fees; buy a Visa or MasterCard gift card and $$$ extra.11:40 AM Sep 15th from HootSuite
the cost of accepting PIN-debit cards rose 305% between 1996 and 2007 http://ow.ly/k8mq10:05 AM Sep 15th from HootSuite
Other than illegal pirce-fixing, technology should have sigtnificantly led to MUCH lower merchant interchange credit card swipe fees8:57 AM Sep 15th from HootSuite
American Bankers Assn say merchants get enormous benefit from credit cards; WRONG, HUGE $48+ billion hidden COST8:40 AM Sep 15th from HootSuite
Bank of America refunds all debit card overdraft fees AFTER NBC News segment for one person, how about for EVERYONE? http://ow.ly/pnJV7:44 PM Sep 14th from HootSuite
looking forward to reading, Priceless: The Case that Brought Down the Visa/MasterCard Bank Cartel by Lloyd Constantine http://ow.ly/peWO11:55 AM Sep 14th from HootSuite
Officially called “Credit Card Fair Fee Act,†ought to be called: “Illegal Price-Fixing Swindle Act by Visa, MasterCard and the Banks”10:30 AM Sep 14th from HootSuite
Network Rivalry Sparks 10-Year Quadrupling of PIN-Debit Pricing (via Digital Tracations) http://ow.ly/k8mf10:05 AM Sep 14th from HootSuite
in 2001, Sonta Sotomeyer ruled on prior class-action in Visa Check, 280 F.3d 124 by merchants challenging Visa and MasterCard fees7:11 AM Sep 14th from HootSuite
Attorney Lloyd Constantine of Constantine Cannon has book coming out: “Priceless: The Case that Brought Down the Visa/MasterCard Bank Cartel4:43 AM Sep 14th from HootSuite
Electronic Payments Coalition (funded by MasterCard, Visa and credit card issuers) attacking its customers! http://ow.ly/pc3E4:30 PM Sep 13th from HootSuite
credit card assn ad SHOULD show receipt listing ADDED credit card interchange fee as extra line item: http://ow.ly/pc3Z4:20 PM Sep 13th from HootSuite
When I sued Visa, MasterCard + its member banks for illegal price-fixing of credit card fees back in ‘05, never imaginged power of Twitter9:55 AM Sep 13th from HootSuite
RT @timharold: Learning about credit card processing fees this morning, bottom line i’m paying way too much, any ideas?9:33 AM Sep 13th from HootSuite
Just returned from three-weeks in Europe. Off again in October to address photo conf in Germany, than New Zealand and Australia6:30 AM Sep 13th from web
Seems a last thread of profitability for banks are their monopoly over merchant credit card interchange fees10:40 AM Sep 12th from HootSuite
Other than illegal anticompetitive price-fixing, how can Visa, MasterCard, 1000s of member banks justify soaring interchange fees?2:45 PM Sep 11th from HootSuite
Competition – what Visa, MasterCard, banks know little about, is why 0 interchange fees will benefit consumers = lower costs10:35 AM Sep 11th from HootSuite
Congress must support “Credit Card Fair Fee Act,” especially in a recession. Takes ~$60 bln out of banks unfair rev into consumers pockets10:15 AM Sep 11th from HootSuite
Improved processing technology and the weak economy should be driving card-acceptance prices down http://ow.ly/k8lT (Digital Transactions)10:00 AM Sep 11th from HootSuite
NBC Nightly News (Aug 16) segment: credit card co’s raising fees, lowering benefits, yet interchange fees record high http://ow.ly/kn4c9:05 AM Sep 11th from HootSuite
Consumers Petition for Lower Credit Card Swipe (interchange swipe fees TRIPLED since 2002) http://ow.ly/kXqu8:40 AM Sep 11th from HootSuite
Think $38,000,000,000 in bank overdraft fees last year was high? Merchange interchange change credit card fees ~DOUBLE THAT!5:15 PM Sep 10th from HootSuite
The Commerce Commission and Mastercard have signed an agreement settling the commission’s claim that the credit card company fixed fees.12:55 PM Sep 10th from HootSuite
Circle K: Interchange fees are their 2nd largest cost after payroll. http://ow.ly/kFNy11:15 AM Sep 10th from HootSuite
Electronic Payments Coalition (EPC) [funding by banks, Visa, MasterCard] misinformation – http://twit.ac/EK2s.html10:35 AM Sep 10th from HootSuite
Officially called “Credit Card Fair Fee Act,” ought to be called: “Illegal Price-Fixing Swindle Act by Visa, MasterCard and the Banks”10:30 AM Sep 10th from HootSuite
only justification [for soaring interchange fees} is when you have an anti-competitive business model and you can illegally fix prices10:00 AM Sep 10th from HootSuite
Same banks reporting HUGE profits from “overdraft fees” often same ones that rec’d BILLION in U.S. bailout $’s8:30 AM Sep 10th from HootSuite
credit card issuers ADVERTISE to FORCE consumers to use plastic vs cash, then disassociate for taking responsibly for the surged in charges8:00 AM Sep 10th from HootSuite
Credit Card Follies: Abolish interchange fees altogether (via Kevin Drum, Mother Jones) http://ow.ly/hGsO #180007:25 AM Sep 10th from HootSuite
$2 trillion (~1/2 of all credit card lines of credit might be rescinded next year (CNBC, NEW News) http://ow.ly/kn8O4:20 PM Sep 9th from HootSuite
Bank of America drops arbitration requirement (via AP) – http://ow.ly/k7KW1:40 PM Sep 9th from HootSuite
JUST ONE MORE FOR THE ROAD: “Credit card issuers boost rates ahead of tougher rules” (LA Times) http://ow.ly/kHHR11:50 AM Sep 9th from HootSuite
Consumers have to pay additional fees or earn more credit card rewards for perks http://ow.ly/kdeX = WE ARE OVERPAYING INTERCHANGE FEES11:40 AM Sep 9th from HootSuite
The new JPMorgan Chase “Chase Sapphire” credit card harms merchants/consumers WE pay the rewards, higher interchange fees10:15 AM Sep 9th from HootSuite
More Scheming by Visa and MasterCard. Anatomy of How an Electronic Gift Card “Works:” http://ow.ly/kdWq9:50 AM Sep 9th from HootSuite
It’s not a privilege to accept Visa / MasterCard credit / debit cards. It’’s a requirement for online co’s; they wield 80% market power.1:00 PM Sep 8th from HootSuite
Question isn’t extraordinary merchant value from credit cards, it’s about antitrust violations – illegal, anticompetitive price-fixing11:15 AM Sep 8th from HootSuite
credit card company merchant interchange swipe fees ARE wipings independent businesses off the map in neighborhoods across the U.S.10:30 AM Sep 8th from HootSuite
Credit card co’s NOW charging hidden tax on consumers. Overdraft a debit card = PAY BIG BUCKS: http://ow.ly/kJGB10:10 AM Sep 8th from HootSuite
Congress must support “Credit Card Fair Fee Act,” especially in a recession. Takes ~$60 bln out of banks unfair rev into consumers pockets9:15 AM Sep 8th from HootSuite
Mastercard agrees to let New Zealand banks issuing credit cards set interchange rates, merchants able to apply surcharges to payments8:55 AM Sep 8th from HootSuite
get rid of interchange fees AND credit card reward gimmicks, after all consumers end up paying for those “free” rewards7:20 AM Sep 8th from HootSuite
Twitter Finally Profitable: Think of all the billable hours from legal, advocacy firms charging Visa, MasterCard and the banks to read this!7:00 AM Sep 8th from HootSuite
SHAME on Visa, MasterCard, credit card companies for misguided effort to shift message from BANK GREED to chain store profiteering.7:00 AM Sep 8th from HootSuite
Why Won’t Visa Give U.S. Competition & Transparency Promised to New Zealand on Credit Card Fees? (via @NCASOnline) http://ow.ly/jVvB6:50 AM Sep 8th from HootSuite
ScanMyPhotos.com FORCED to accept Visa and MasterCard for our ecommerce business, as are most online companies, they wield 80% market power7:35 AM Sep 7th from HootSuite
Lawsuit against MasterCard. Visa over interchange fees NOT ABOUT “extraordinary value to merchants” but ILLEGAL PRICE FIXING8:05 AM Sep 6th from HootSuite
4-party credit card payment systems is broken; interchange fees no longer cost-based, floods banks with $ at expense of consumers10:55 AM Sep 4th from HootSuite
The press release FLUFF announcing the $$$ “Chase Sapphire” credit card FAILS to mention HIGHER interchange fee costs – http://ow.ly/kH0A10:20 AM Sep 4th from HootSuite
MORE UNFAIR CREDIT CARD FEES: Banks charging $35 for a cup of coffee (via NYT’s editorial 8/20) http://ow.ly/kJBS10:05 AM Sep 4th from HootSuite
As Citigroup and Bank of America Post Huge Profits, Why are Bank Fees Going up? (via Anthony Mason CBSNews) http://ow.ly/hzsx7:20 PM Sep 3rd from HootSuite
banks, credit card co’s protect key source of profits: credit card swipe fees (HuffPost) http://ow.ly/gVwv5:45 PM Sep 3rd from HootSuite
Q: Why should retailers be taking on a ride when affinity reward credit cards R used? A: Consumers ultimately pay = NO FREE REWARDS2:20 PM Sep 3rd from HootSuite
Competition – what Visa, MasterCard, banks know little about, is why 0 interchange fees will benefit consumers = lower costs11:35 AM Sep 3rd from HootSuite
Stop Unfair Credit Card Fees Tell Your Elected Representatives To Act On Interchange Fees http://ow.ly/iEOn10:45 AM Sep 3rd from HootSuite
Interchange fees antiquated as manual credit card imprinters and carbon copy receipts, no longer COST BASED, now GREED BASED10:25 AM Sep 3rd from HootSuite
About 90% of ALL overdraft bank fees HIT 10% of poorest Americans: http://ow.ly/kJLl10:20 AM Sep 3rd from HootSuite
GREAT TO HEAR: Circle K petition expects to deliver three-quarters of a million signatures protesting card fees.11:10 AM Sep 2nd from HootSuite
media spending for credit card ads PLUNGED 50% means LOWER interchange change fees as marketing was part of the cost, so why HIGHER fees?11:05 AM Sep 2nd from HootSuite
credit card companies cut ad spending 50% (Brandweek) = less risk and lower mkting costs, yet record interchange fees? http://ow.ly/k8UI8:05 AM Sep 2nd from HootSuite
Rulings against Visa and MasterCard in New Zealand are foreshadow of how deeply both credit card associations may fall in U.S.10:00 AM Sep 1st from HootSuite
Credit card companies are cancelling cards and reducing benefits even though merchant interchange are paying the costs, incl rewards.4:15 PM Aug 31st from HootSuite
Q: Why should retailers be taking on a ride when affinity reward credit cards R used? A: Consumers ultimately pay = NO FREE REWARDS2:20 PM Aug 31st from HootSuite
In Priceless, author and lead counsel Lloyd Constantine relates the dramatic account of backroom strategizing and courtroom conniving during the high-stakes litigation. Constantine, who led the team representing the plaintiffs, vividly describes how the case pitted retailers against credit card companies, and pries the lid off dodgy debit card practices. The plaintiffs, including Wal-Mart, Sears Roebuck, The Limited, Safeway, and a class of five million stores, pitted their financial futures against Visa and Mastercard in this war between giants.In the vein of breakout bestsellers like A Civil Action and A Confederacy of Fools, this fast-paced narrative, peppered with larger-than-life characters, tears open the case and shows readers how the more than $3-billion-dollar settlement came about. The riveting story features cameos by lawyers, judges, and businessmen, including then University of Arkansas law professor Bill Clinton and New York Attorney General Eliot Spitzer. The triumph is also a David and Goliath tale, in which a small boutique law firm beats four of the largest law firms in the world, including London-based law firm Clifford Chance
As reported earlier, beginning next week, rates charged by Visa and MasterCard and its member banks will again change. [ScanMYPhotos.com] received out letter of rate changes two weeks ago.
Two times each year, we receive the same formatted letter and confusing pricing matrixes that explain rates for accepting credit and debit cards are again changing. This time, it comes as U.S. Senator Chris Dodd proposes a significant change to these unfair fees. Any rate reduction must be met with recognizing the years of illegal profiteering from price-fixing by MasterCard, Visa and its member banks and issue refund for those overcharges -amount is in the hundreds of billions.
From The Hartford Courant (8/24). Click here to read more.
Excerpt:
U.S. Sen. Christopher Dodd is coming out swinging again at banking fees, saying he will push for more changes in credit card fees — this time those paid by merchants — even as he seeks to limit bank income from overdraft charges.
Dodd said Wednesday that he will propose legislation to “substantially modify” the fees that merchants pay so they can accept major credit cards and have those transactions processed through banks. Dodd, architect of credit card reform signed into law in May, previously indicated that he next intended to take aim at “interchange” or “swipe” fees.
“Every state you go to, you hear it from retailers,” Dodd said. “The fees are excessive.”
While health insurance executives are earning as much as a hundred thousand dollars EVERY hour, watch this humorous video to show the extreme parallels between health insurance and credit card company windfalls.
This has been a multi-billion dollar annual boondoggle for the banks at the expense of millions of consumers. The larger question is why haven’t the banks also addressed merchant interchange fees – which account for substantially more unfair costs to businesses and consumers?
It was the public outcry, an NBC Nightly News segment and extensive media coverage on debit card overdraft fees that helped cause this very rapid shift in policy. It is also being used as a marketing tool, as the credit card issuers can now promote they have waived and adjusted the terms of these overdraft fees to better compete. However, there is no competition when it comes to merchant interchange fees; retailers are still forced to accept Visa and MasterCard’s terms. Issuing banks can simply pass along any lost overdraft fees with higher merchant interchange fees, which simply means that ultimately the consumer still gets screwed.
My five-year legal battle as class-representative in an antitrust class-action against Visa, MasterCard and its member banks continues to reap unsubstantiated profits for the credit card companies with even greater costs.
Merchant interchange fees are an insult that is an atrocity and slap in the face of every consumer and merchant that accepts debit and credit cards. Along with the banks, which until Visa and MasterCard’s IPO’s controlled one-hundred percent of the two giant credit card associations, are continuing to wage a battle against its customers. If only they listened to their critics addressing these equally excessive charges.
You just have to watch this how-to video. The key facts about illegal antitrust price-fixing are omitted, as are the reasons why merchant interchange fees in the U.S. are upwards of six-times what other industrialized nations pay. Remember, this video and the organization promoting it is funded by the banks and Visa and MasterCard.
The problem is that few understand what these fees are; it is a hidden tax on consumers – amounting to upwards of $48 billion in anticompetitive charges each year. As proof, since this video was posted, only about 450 people viewed it, which my guess was largely from those who produced it.
A new study by the Merchants Payments Coalition finds that Americans pay a much higher percentage for interchange charges than the rest of the industrialized world.
WASHINGTON, DC – A new study by the Merchants Payments Coalition (MPC) found that if U.S. consumers paid the same low credit and debit card swipe fees as consumers in Australia pay, then the net benefit would have totaled $125 billion over the last four years.
Interchange fees, or “swipe fees,” cost Americans an average of $2 on every $100 they spend with credit cards — a higher percentage than anywhere else in the industrialized world. Why? Because other countries and their governments have been able to negotiate with the big banks and credit card companies for fair rates and transparency, the MPC notes. NACS is one of the founding members of the MPC.
But, in the United States merchants and their customers are still forced to pay sky-high interchange fees.
Interchange fees started out in the 1960s as a way for banks to cover the cost of processing credit card transactions. But even as technology has dropped that cost dramatically, the banks and credit card companies have pushed swipe fees higher and higher, turning it into a cash cow. For many businesses, credit card fees are now their single-highest non-labor operating cost.
With almost any other equipment, supplier or service, retailers can comparison-shop, negotiate or otherwise influence its final cost of doing business. Store owners can conserve on energy usage and seek out the most competitive prices for merchandise, just to cite a few examples.
Not so with credit card interchange fees. Visa and MasterCard control more than 80 percent of the marketplace. They set the fees in secret, give businesses no ability to negotiate and virtually insist they be buried in the price of merchandise. Unfortunately, the card companies’ hidden fees get passed on to all consumers in the form of higher prices and lower value for nearly everything they buy.
“It’s bad enough that the credit card companies force these hidden fees on us and our customers when we can least afford it,” noted NACS Vice Chairman of Government Relations Tom Robinson, president of Robinson Oil Corporation. “But when we are paying more than anywhere else in the world, and other countries have taken action to protect their citizens from abuse, it is inconceivable that our government would turn a blind eye to the issue. It is time for Congress to step up and defend the principles of the free-market economy by taking action on (interchange) fees.”
Though Congress and the White House have addressed other credit card reforms, the MPC is arguing that any fix will be incomplete without addressing interchange fees. Consider:
Banks raked in an estimated $48 billion in interchange fees in 2008 – an average of $427 per American household in just one year.
This $48 billion total is more than triple the amount collected as recently as in 2001.
Hidden interchange fees cost Americans more than all credit card annual fees, cash advance fees, over-the-limit fees, and late fees combined.
U.S. interchange fees are the highest in the developed world. The U.S. pays approximately 60 percent of interchange fees globally – about double the U.S. percentage share of global GDP.
Compared to the rest of the world, U.S. interchange fees are more than two times the rates in the U.K. and New Zealand, four times the rates in Australia and more than six times the cross-border rates recently agreed upon by MasterCard and the European Union.
Meanwhile, the payments industry has back with its own “study.”
In a September 17 press release, Visa announced the findings of a new study that shows that “consumers believe retailers benefit far more from accepting credit and debit cards than they pay in costs.
The press release noted that consumers believe merchants see card cost acceptance as a part of doing business, much like paying for utilities such as electricity.
“Retailers and their well-funded trade associations have filed lawsuits and are aggressively lobbying Congress to allow them to shift their business costs to consumers by allowing merchants to charge checkout fees whenever consumers use credit or debit cards. At the same time, national convenience store chains have launched misleading, in-store petition campaigns to cover for their checkout fee efforts, noted Visa’s press release.
“The response is loud and clear: consumers aren’t buying the message convenience store chains and big retailers are selling,” said Bill Sheedy, group president of the Americas for Visa Inc., in the release. “This research demonstrates that consumers are well aware that legislation is a Trojan horse that likely will lead to higher prices for cardholders while retailers pocket the savings.”
Click here to read the recent report profiling interchange merchant interchange fees rates. U.S. credit card interchange fees ~2X rates in UK, New Zealand. ~4X rates in Australia. ~6X cross border MasterCard rates in the EU
“Not only do other nations provide lower interchange rates, but we can also learn from other countries’ experiences with interchange reform. Major countries around the world have addressed interchange reform, with some already demonstrating beneficial results for their economies. In particular, lessons learned from experiences in Australia, New Zealand, Canada, and the European Union, provide instructive examples about why interchange reform makes economic sense in the U.S. – especially now.”
Click here to view NBC Nightly News (9/14) segment on debit card fees. Scooping up huge fees from debit cards. After the segment aired, the bank refunded those overdraft fees for the person profiled. How about refunding all fees for everyone? Overdraft fees are a cash cow for many banks, generated about $27 billion in fees this year.
WayTooHigh: Q: How can banks (MasterCard / Visa) site “competitive pressures” regarding need for soaring credit card rates? They own the Monopoly board!
WayTooHigh: You know it’s a good day for consumers and retailers when Visa publicly expresses extreme disappointment: http://ow.ly/kdXF
WayTooHigh: Q: Why hasn’t MasterCard, Visa, Chase, CitiGroup, BofA, etc… not been shut down for collusion and credit card price-gouging. A: Dunno
WayTooHigh: More Scheming by Visa and MasterCard. Anatomy of How an Electronic Gift Card “Works:” http://ow.ly/kdWc (new post)
WayTooHigh: MAJOR SCAM: Visa, MasterCard gift cards issued rather than checks. They keep micro-payments remaining, because you can’t exceed your balance
WayTooHigh: @nancytrejos- As credit card companies lower reward benefits merchants interchange fees should be too, WE (consumers) pay those rewards
WayTooHigh: Looking forward to watching NBC’s Meet the Press on Sunday – my hero, Rachel Maddow takes on someone I can’t stand, Dick Armey
WayTooHigh: Rob Reeg. pres Global Technology & Operations for MasterCard Worldwide, frightens consumers http://ow.ly/izsH with misinformation
WayTooHigh: credit card companies cut ad spending 50% (Brandweek) = less risk and lower mkting costs, yet record interchange fees? http://ow.ly/k8UC
WayTooHigh: Why should retailers be taken on a ride when affinity reward credit cards are used? Consumers ultimately pay = NO FREE REWARDS
WayTooHigh: media spending for credit card ads PLUNGED 50% means LOWER interchange change fees as marketing was part of the cost, so why HIGHER fees?
WayTooHigh: As recession-weary consumers are swearing off their credit cards, credit card brands are swearing off advertising http://ow.ly/k8Ua
WayTooHigh: Network Rivalry Sparks 10-Year Quadrupling of PIN-Debit Pricing (via Digital Transactions) http://ow.ly/k8mc
WayTooHigh: only justification [for soaring interchange fees} is when you have an anti-competitive business model and you can illegally fix prices
WayTooHigh: Improved processing technology and the weak economy should be driving card-acceptance prices down http://ow.ly/k8lP (Digital Transactions)
WayTooHigh: RT @Denrael: @WayTooHigh there is competition but challenge is getting wallet space [Not really, MasterCard and Visa wield 80% Market Power]
WayTooHigh: Stop Unfair Credit Card Fees Tell Your Elected Representatives To Act On Interchange Fees http://ow.ly/iEOe
WayTooHigh: FIGHT CREDIT CARD FEES: Write Congress – Share this link with fellow merchants http://ow.ly/iENK
WayTooHigh: Circle K Circulates Petition Chain placing petition protesting credit-card fees in its convenience stores http://ow.ly/iEN1
WayTooHigh: More consumers using debit cards (50.4%) over all noncash sales (AP), but ScanMyPhotos.com and many merchants process it at higher CC rates
WayTooHigh: New to ScanMyPhotos.com: For updates on our antitrust lawsuit against Visa, MasterCard, major banks See: http://ow.ly/k4Wj
WayTooHigh: Had media interview w/ biz pub. Explained credit card companies get away with high rates because they = monopoly, fix-prices, NO competition
WayTooHigh: Credit Card Issuers’ trick: Ads showing “fun” ways to design photos on credit card = distraction, should be URGING you to READ terms #18000
WayTooHigh: Three bills have been introduced in the 111th Congress that address the issue of interchange fees http://ow.ly/jNRA
WayTooHigh: It’s Visa and MasterCard that should thank consumers every time they use a debit / credit card at stores: http://ow.ly/iftW
WayTooHigh: From MasterCard Inc. Q2 Earnings Call, NO explanation about price-fixing and intl interchange fees that are 1/3 that in U.S.
WayTooHigh: NZ Commerce Commission settled out of court w Visa in deal that will change fees charged on all retail transactions in NZ http://ow.ly/jLA1
WayTooHigh: Commerce Commission And Visa Reach Agreement To Settle Credit Card Interchange Fee Proceedings http://ow.ly/jLmA
WayTooHigh: Our economy lost trillions POST Bush’s $300 p/ person stimulus program. But, Republicans silent on anything but attacking current plan.
WayTooHigh: SHAME on Visa, MasterCard, credit card companies for misguided effort to shift message from BANK GREED to chain store profiteering.
WayTooHigh: Congress must support “Credit Card Fair Fee Act,” especially in a recession. Takes ~$60 bln out of banks unfair rev into consumers pockets
WayTooHigh: Visa, MasterCard look abroad for growth (via Reuters) [Even thought U.S. interchange fees ~3x more than abroad?] http://ow.ly/jIw9
WayTooHigh: Stop Unfair Credit Card Fees Tell Your Elected Representatives To Act On Interchange Fees http://ow.ly/iEOa
WayTooHigh: When anticompetitive and illegal interchange fee price fixing ends, family-owned restaurants, dry cleaners, etc. will be SAVED
About three months ago, I bought new tires and was pleased to learn that it included a $50 rebate. But, the hoops to redeem that incentive were challenging.
Here is what happened:
Rather than receive a $50 check (which would have no interchange fee), a Visa-branded credit card was mailed and JUST received. The credit card issuers have created a giant windfall scheme for themselves at the expense of consumers.
The rules for redeeming the card is extensive and means that if there is a micro-balance, they keep it. I did a previous posting on this situation.
To access the funds on the electronic payment card you MUST present the card to the service station attendant inside when you fill up. Don’t try to insert it into the gas station pumps’ electronic card reader. It won’t work. Another rule is: “Please note. Ask the attendant to swipe the card after you have filled up to assure the success of your transaction.” Yeah, right! Try doing that, as clerks must swipe the card to reserve payment up front.
For regular checkouts, “you must always select ‘Credit’ when making purchases. You are authorized to make purchases that do not exceed your available balance.” This is a pure SCAM. Who makes an exact $50 purchase? Try using the “gift” card at a restaurant. Imagine being on a date, presenting the card and having the server explain that you can’t! Either way, the merchant is charged the much higher credit card interchange fee, rather than the debit card flat rate. If it was a check that we deposited into our bank account, there would be no fees and we easily would have the entire gift valued, rather than these games which reduces the value.
My guess is many consumers get frustrated and use part of the balance and dispose or file away the card and thus the issuer gets to keep the balance. What happens to the company that tendered the rebate “gift card? Did they pay full price to the card issuer, or a discount? I can only imagine the amount never redeemed.
Another scheme and pure profit center for the credit card issuers.
Improved processing technology and the weak economy should be driving card-acceptance prices down, according to Mitch Goldstone, president and chief executive of ScanMyPhotos.com in Irvine, Calif. “The only justification is when you have an anti-competitive business model and you can illegally fix prices,” says Goldstone, the lead plaintiff in a pending class-action lawsuit against bank card interchange. “That’s what it’s all about.”
Click here to read entire Digital Transactions article. (Aug 14, 2009)
Read this credit card Interchange updated by Jan Norman, Orange County Register (July 30, 2009)
Excerpt:
The store owners lose money because a growing number of customers use credit cards for small purchases, he says.
The issue has been around for years. 30 Minute Photos Etc. in Irvine was a named plaintiff in a 2005 class action lawsuit against the interchange fees.
“Interchange fees are just a way that credit card companies squeeze merchants to enhance their revenue stream,” according to Mitch Goldstone, partner in 30 Minute Photos and ScanMyPhotos.com.
Watch this ABC WCBV-TV News segment on merchant interchange fees and the escalating battle against credit card company fees.
NewsCenter 5’s David Brown reported that they are unregulated credit cards fees charged to store owners for every credit and debit card transaction. It’s a hidden fee that is eventually passed on to the consumer.
Listen to this radio segment on Marketplace Morning Report. Every time you charge your Big Gulp at 7-Eleven, a credit card company swallows part of the profit. But Slurpee slingers have had enough of the merchant fees. Stacey Vanek-Smith reports.
In response to Andrew Martin’s July 16th “Card Fees Pit Retailers Against Banks” New York Times article, I submitted this response:
Dear Editor,
I appreciated your thorough article, ‘Card Fees Pit Retailers Against Banks,’ New York Times, July 16, 2009, describing the serious problem of exorbitant and ever-increasing interchange fees incurred by merchants in the United States.
It is ironic that in a day and age when many businesses face possible extinction due to rapid advancement in technology that card payment systems like Visa and MasterCard continue to thrive and grow using magnetic strips embedded in plastic cards, which is a device closer to the bygone era of carbon copies than to advance technology.
All merchants should applaud the populist pressure and Congressional efforts to confront this hidden tax on the economy represented by interchange fees. It is important to note, however, that the problem is even greater for Internet-based merchants who have no choice but to accept payment cards and are captives to this system developed by the banks.
Perhaps this is the reason that banks impose even higher interchange fees on internet merchants, who also often receive no payment guarantee. That is why we, along with many other traditional merchants, both large and small, are leading efforts in the In re Payment Card Interchange Fee antitrust lawsuit in the Eastern District of New York to eliminate interchange fees and other abusive rules imposed on merchants.
Hopefully, through our efforts, combined with those of other merchants, their customers and Congress, we can succeed in eliminating this abuse of market position by the banks and their card companies.
Watch CBS Videos Online
With mortgage defaults and unemployment still on the rise, big banks are still taking a beating on bad consumer loans. To offset those losses, banks are hiking up their fees. Anthony Mason reports.
Via CNBC: Visa Inc., the world’s largest credit and debit card processor, said it has deposited $700 million into an account earmarked for litigation costs, a move that essentially acts as the repurchase of class B shares. Read more…
WayTooHigh: credit card issuers ADVERTISE to FORCE consumers to use plastic vs cash, then disassociate for taking responsibly for the surged in charges
WayTooHigh: Andrew Martin’s NY Times interchange article DOESN’T mention ZERO interchange fees in some nations, 4 writing checks, PINbased ATM in Canada
WayTooHigh: Not good news for small business financing and the economy: CIT says discussions with government have ceased, with no likelihood of support
WayTooHigh: Way to go MasterCard! Charge customers up to ~30% merchants up to ~5%, yet you get 16% discount on legal settlement http://ow.ly/gs5k#18000
WayTooHigh: It takes unbridled greed by Visa, MasterCard and the credit card issuers cartel to continue raising “SWIPE” interchange fees in a recession
WayTooHigh: ScanMyPhotos.com FORCED to accept Visa and MasterCard for our ecommerce business, as are most online companies, they wield 80% market power
WayTooHigh: Later this month stay tuned for more profiles on ScanMyPhotos.com & we’ll be sure to mention our battle against Visa, MasterCard fees #18000
WayTooHigh: technology has brought our cost to scan a photo from $5 to 5-cents, yet MasterCard and Visa keep raising their unjustfied interchange rates
Dallas (July 8, 2009) – In communities across America, 7-Eleven store owners and operators are undertaking an unprecedented, million-signature petition campaign calling on Congress to reform unfair and excessive credit card transaction fees.
Some 6,300 7-Eleven® franchisees, licensees and store operators in the U.S. are working to change the way credit card companies’ do business with retailers across the country and are taking their beef to the street – or in this case to their counters and customers.
Interchange fees are hidden fees to the consumer and are set privately by credit card companies and charged to store owners every time that a customer uses a credit card. Transaction fees squeezed American businesses and their customers to the tune of $48 billion in 2008 alone. On average, an American store owner will actually pay nearly twice as much in transaction fees as they earn in profits, according to the National Association of Convenience Stores 2007 State of the Industry data.
“7-Eleven stores are operated by franchisees who represent more than 6,000 small businesses on Main Streets and in neighborhoods across America,” said Darren Rebelez, 7-Eleven, Inc. executive vice president and chief operating officer. “This petition drive is a grassroots effort to get a fair deal, spearheaded by small business owners in the communities where they live and with the customers they serve every day.
“Interchange fees are hurting individual small business operators, which represent more than 75 percent of 7-Eleven stores in the U.S.,” Rebelez said. “Because more and more customers are using credit cards for small purchases, there are small transactions where the operator actually loses money. The fundamental challenge is that in most business relationships, both parties have the ability to negotiate, and in this case we do not. ”
The petition drive takes place at all of 7-Eleven’s U.S. stores, and a copy of the petition will be prominently offered for signatures at every check-out counter. At the end of the petition drive, 7-Eleven expects to deliver one million signatures to Congress, calling on them to stop credit companies from charging unfair, hidden transaction fees and to pass legislation empowering retailers to negotiate with credit card companies.
“We’re not asking for a bailout, we simply want to negotiate in good faith with credit card companies in the same manner we negotiate with thousands of our other business partners,” Rebelez said.
American consumers pay among the highest transaction fees in the industrialized world. An average of $2 out of every $100 Americans spend goes to transaction fees, and for many businesses, transaction fees are now their highest non-labor cost, growing even faster than health care costs. As other countries have reined in excessive transaction fees in recent years, and the actual cost of processing credit card transactions has gone down, Americans are now paying triple the amount in transaction fees they paid in 2001, reaching $48 billion last year alone.
Rebelez added, “In the convenience industry, credit card companies come out the winner making more than twice the profits of the industry in total. To date, we have been unable to convince these companies to come to the table to negotiate fair fees. In order to survive and stay in business, our franchisees and licensees plan to make a significant, collective statement with this petition drive. With this unprecedented effort, Congress will hear the message of 7-Eleven’s small business owners and our customers across the country loud and clear,” he said.
The 7-Eleven petition drive will continue through Aug. 10. At the conclusion of the campaign, the top signature-gatherers from each of 7-Eleven’s seven U.S. geographical divisions will be flown to Washington to personally deliver the signatures to Congress.
About 7 Eleven, Inc.
7 Eleven, Inc. is the premier name and largest chain in the convenience retailing industry. Based in Dallas, Texas, 7-Eleven operates, franchises or licenses approximately 7,800 7-Eleven® stores in North sales of more than $53.7 billion. For 15 consecutive years 7-Eleven has been listed among Hispanic Magazine’s Hispanic Corporate Top 100 Companies that provide the most opportunities to Hispanics. 7-Eleven is franchising its stores in the U.S., and is expanding through organic growth, acquisitions, and its Business Conversion Program. Find out more online at www.7-Eleven.com.
WayTooHigh is on Twitter. Click here to follow. Due to the rapid updates in our battle against Visa and MasterCard and its member banks, we are replying on Twitter for more instant updates and posts.
In many countries around the world, electronic card-based payments have been replacing older types of payments at a rapid rate. In the United States, use of both debit cards and credit cards has been rising rapidly, while check volumes have been declining.
The increased use of electronic payment methods has generated a number of public policy debates. One prominent debate concerns interchange fees. This paper is intended to provide background for understanding the interchange fee debate. The paper describes the operation of a typical payment card system, presents a summary of the economic theory underlying interchange fees, and discusses various developments in the U.S. payment cards industry, as well as legal and regulatory developments abroad.
The paper concludes with a discussion and critical evaluation of a number of potential policy interventions.
Interchange fees typically involve a payment from a merchant’s bank to a card user’s bank for each debit card or credit card transaction, are determined at the network level, and are the same for all banks participating in a network. These fees are generally passed through to merchants by their banks and comprise a large fraction of the fees that merchants pay to their banks for processing card transactions. Card-issuing banks often use a portion of their interchange fee revenue to encourage card use by offering their cardholders rewards, such as cash rebates or airline miles, that increase with card use. In recent years, increases in interchange fee rates, together with growth in the volume of card transactions, have led to a dramatic rise in the total value of interchange fee payments and, consequently, in merchants’ cost of accepting payment cards. These cost increases have given rise to significant concerns among merchants.
Merchants Want Consumers to Foot the Bill for Their Costs of Accepting Credit and Debit
WASHINGTON, June 4 /PRNewswire/ — The Electronic Payments Coalition issued the following statement in response to the interchange legislation introduced today by Congressman John Conyers (D-MI):
“The Electronic Payments Coalition strongly opposes interchange legislation introduced today in the U.S. House of Representatives by Rep. John Conyers (D-MI) – a bill nearly identical to one that received broad bipartisan opposition last year.
This legislation is an attempt by giant retailers to make consumers pay for one of their business expenses – the cost of accepting credit and debit. It’s simple: merchants do not want to pay their fair share to accept debit and credit cards, and they want consumers to foot the bill.
If this legislation passes, American families will end up footing retailers’ bills when it comes to accepting debit and credit cards.
Merchants that accept credit and debit cards benefit from more sales, lower costs and greater profits. It is only fair that they pay a fee for this service.
At a time when American families everywhere are struggling to make ends meet, they shouldn’t be forced to pay more so giant retailers can profit at their expense. We understand that every business wants to find ways to cut overhead costs for valued services, but forcing consumers to pick up the bill for giant retailers just isn’t fair.
Consumers pay their bills. Giant retailers should pay theirs, too. On behalf of every American consumer who pays his or her own bills, the Electronic Payments Coalition urges Congress to oppose this harmful legislation.”
Purchase, NY, June 04, 2009 – MasterCard said today that legislation introduced today by U.S. Rep. John Conyers (D-MI), by exempting merchants from antitrust laws, would take away the fundamental protections that these laws provide consumers. This would result in less credit availability, along with higher prices and reduced benefits when Americans choose to use their credit or debit cards. Antitrust laws are designed to protect competition and consumers, but this bill would have the opposite effect.
Conyers’ legislation, H.R. 2695, would give merchants a special exemption from antitrust laws enabling them to engage in anticompetitive and collusive behavior when establishing the fees and terms applicable to accepting payment cards. The bill is part of an organized merchant campaign to shift their card acceptance costs to consumers, and does not require merchants to pass on any savings to consumers if they succeed in lowering these fees.
When similar legislation was considered last Congress, it stirred considerable controversy and was only narrowly approved by a deeply divided Judiciary Committee. In addition, a wide array of organizations from non-profits to community banks and credit unions to minority small businesses voiced their opposition. The Department of Justice also expressed concern about the bill indicating that its antitrust exemptions “would appear to be the type of naked collusion that the antitrust laws condemn as per se unlawful because such conduct lacks plausible benefits to competition.”
Experience demonstrates that consumers lose when merchants no longer pay their fair share for the valuable benefits they receive from accepting payment cards. This is precisely what happened in Australia when the government reduced interchange fees. Although it cut costs for merchants, many Australian consumers now pay more for their payment cards and receive less in return as a result of the government’s intervention. Furthermore, there is no evidence that merchants reduced prices for consumers as a result of the government’s intervention.
Both merchants and consumers benefit from the ability to use and accept electronic payments, and in today’s free market system, each pays a share of the cost of the service. The benefits and the cost of card payment services are now shared between merchants and consumers but the merchants behind the Conyers bill seek to retain the benefits while shifting the costs to consumers.
Finally, MasterCard noted that any serious discussion of these issues should wait for the results of the Government Accountability Office (GAO) study ordered by Congress as part of the Credit CARD Act. Consumers stand to be severely damaged by government intervention and the findings of the GAO study may help avoid consumer harm that inevitably flows when merchants no longer pay their fair share for the benefits they receive.
On the MasterCard Worldwide website, the credit card giant has a posting and disclaimer about merchant interchange fees that is very interesting.
Interchange rates and fees are established by MasterCard and are generally paid by financial institutions called “acquirers” that provide card acceptance services to merchants. Acquirers pay these fees to card issuers. Interchange rates/fees are only one of the many cost components of the Merchant Discount Rate (MDR) that is established by acquirers and paid by merchants in exchange for card acceptance services.
Please note that MasterCard is not an issuer and has no involvement in acquirer/merchant pricing policies.
While MasterCard is not a card “issuer,” the giant credit card company is attempting to distance itself from the merchant interchange antitrust litigation by suggesting they are not involved in pricing policies. That is what this antitrust litigation is about - price-fixing. At the time the lawsuit was filed, which I am a lead plaintiff in, MasterCard was entirely owned by its member banks. While MasterCard may claim it is not involved with “pricing policies,” it was its board members (the banks) that collectively set the fees; many of those board members were also controlling Visa as well.
MasterCard’s response to Credit Card Far Fee Act is wrong. They (the credit card issuers) ALREADY are making less credit available, forcing higher rates and cutting benefits.
The Electronic Payments Coalition claims that the Credit Card Fair Fee legislation is aimed to help giant retailers. ScanMyPhotos.com is not a “giant retailer,” we are just like millions of other merchants and small businesses that are battling Visa, MasterCard and its member banks over illegal anti-competitive price-fixing of their merchant interchange fees.
WASHINGTON — NACS applauded the reintroduction of the “Credit Card Fair Fee Act,” bipartisan legislation introduced today by House Judiciary Chairman John Conyers (D-MI) and Representative Bill Shuster (R-PA) that seeks to address the more than $48 billion that Americans annually pay in credit card swipe fees.
Similar to legislation introduced last Congress by Chairman Conyers and supported by NACS, the bill, H.R. 2695, seeks to help level the playing field for retailers by giving them a seat at the negotiating table with banks to determine the fees assessed for every sale made by credit card, and ultimately reduce the costs of everyday goods for consumers.
Credit card swipe fees — called “interchange fees” by the big banks that set these rates — are a percentage of each transaction that Visa and MasterCard and their member banks collect from retailers every time a credit or debit card is used. These fees average about 2 percent in the United States, the highest rate in the industrialized world.
In 2008, credit card fees cost U.S. convenience stores $8.4 billion — compared to only $5.2 billion in store profits, according to NACS data. Almost all of these credit card fees are attributable to credit card swipe fees.
Currently, credit card swipe fees are set in secret by the banks and hidden from view. Raising these fees is how Visa and MasterCard — which together control more than 80 percent of the U.S. credit card market — encourage banks to issue more credit and debit cards.
“We are delighted that Congress is taking a closer look at these outrageous fees on the heels of its reform of the credit card industry’s abusive lending practices,” said NACS Chairman Sonja Hubbard, CEO of Texarkana, Texas-based E-Z Mart Stores. “Now it’s time to address the rest of the credit card industry’s abusive practices.”
“Right now swipe fees are fixed by the banks, hidden from the public and forced on retailers in a take-it-or-leave-it offer,” said Hubbard. “The Credit Card Fair Fee Act would allow retailers and the card associations to negotiate on equal footing, and we applaud this bipartisan effort to make it happen,” she said.
Over the last several years, the public, consumer groups, the Federal Reserve and Congress have scrutinized unfair credit card practices, policies and fees. Swipe fees have been the subject of multiple hearings in both the House and Senate under both the Republican and Democratic Congresses, and the banking industry has intensely lobbied against any reform — something it continues to do.
“It is simply outrageous that the banking industry — which received hundreds of billions of dollars in taxpayer-funded bailout money — continues to spread fear and misinformation in their lobbying efforts,” said Hubbard. “The bottom line is that unless Congress fully addresses how credit card swipe fees are determined, and why they are set in secret and hidden from consumers, the banking industry will have free reign to establish higher rates and create new hidden fees that continue to punish Americans,” she said.
Many individuals and businesses are gathering online to recommit in the repeal of the anti-marriage proposition 8 ruling in California.
If you are one of the 18,000 gay and lesbian couples who were legally married in the state, or are their friend or relative, let your Tweets send a powerful message and show your support for the freedom to marry. Following the California Supreme Court’s decision to uphold Prop. 8, which stripped same-sex couples of their right to marry, many people are taking a stand to win back marriage equality. For complete information on this important issue we recommend visiting: Equality California (@EQCA) and the Human Rights Campaign (@HRCBackStory).
WHAT TO DO: It is easy, free and just uses six characters. Beginning today, every @WayTooHightweet posting will end with “#18000″ hashtag symbol on Twitter to support marriage equality. Mitch Goldstone, editor of WayTooHigh.com and @WayTooHigh and Carl Berman are the lead plaintiffs, representing millions of merchants, in the first merchant interchange antitrust lawsuit against Visa, MasterCard and its major member banks from 2005 and are one of the 18,000 legally married gay couples in California.
Think of the millions of daily tweets, the solidarity and impact of having many messages end in “#18000.” The goal is to create a daily trending topic on Twitter by having “#18000” consistently rank and get noticed.
It will be our collective signature and allegiance to this important human rights cause and help open the hearts and minds by identifying the sweeping support for marriage equality.
Each time you tweet, please use the last six characters to show your support for marriage equality. Let others know what you are doing by retweeting (RT) this message: “We are using Twitter to take a stand and support marriage equality by ending each tweet with this hashtag: #18000″
NRF Urges Senate to Pass Amendment to Credit Card Reform Bill Making Cash Discounts Easier
WASHINGTON, May 12, 2009 – The National Retail Federation today urged the Senate to approve an amendment that would make it easier for retailers to offer discounts to customers who use cash or other low-cost forms of payment rather than credit cards that carry increasingly high processing fees.
“Retailers should be able to offer discounts to their customers in any legal way they choose without interference from the credit card companies,” NRF Senior Vice President for Government Relations Steve Pfister said. “By reinforcing retailers’ ability to offer discounts, the Durbin-Bond amendment will directly help reduce the prices that consumers pay for goods and services.”
Pfister’s comments came in a letter to members of the Senate, which is expected to vote this week on legislation that would block a number of abusive credit card industry practices such as applying interest rate increases retroactively to existing balances or “double cycle” billing, where interest charges are computed on outstanding balances from more than one billing cycle.
Senate Majority Whip Richard Durbin, D-Ill., and Senator Christopher “Kit” Bond, R-Mo., plan to offer an amendment to the legislation that would make it easier for merchants to offer a discount to customers who use low-cost forms of payment.
Current federal law allows merchants to offer a discount in such cases, but complicated credit card company rules make it extremely difficult to do so in practice. The Durbin-Bond amendment would add debit cards to cash and checks on the list of payments for which a discount can be offered, and would prohibit credit card companies from penalizing merchants for offering a discount, for the way in which they display discounts or for directing customers toward a discount payment option.
The legislation would also direct the Federal Reserve to gather and publish information on credit card interchange fees, other credit card fees and rules governing them.
“These rules are essentially hidden today,” Pfister said. “Both retailers and the public have a right to more complete information given the billions of dollars involved and the impact these fees have on the cost of everyday goods.”
The amendment is aimed at credit card interchange, a fee averaging close to 2 percent that Visa and MasterCard banks charge merchants to process the transaction each time a credit card is used to pay for a purchase. Visa and MasterCard rules effectively require the fees to be built into the price of merchandise, driving up costs for all consumers regardless of whether they pay by cash, check or plastic. The fees totaled $48 billion in 2008 and cost the average household $427, according to NRF estimates. Both numbers are three times the levels seen when NRF began tracking interchange in 2001.
The interchange fee varies from as little as about 1.5 percent to as high as about 3 percent, with “premium” cards offering rewards programs to the users carrying the highest fees. In addition to adding debit cards to the list of payments for which discounts can be offered, the Durbin-Bond amendment would allow merchants to offer discounts to customers who use low-fee credit cards rather than high-fee cards.
The National Retail Federation is the world’s largest retail trade association, with membership that comprises all retail formats and channels of distribution including department, specialty, discount, catalog, Internet, independent stores, chain restaurants, drug stores and grocery stores as well as the industry’s key trading partners of retail goods and services. NRF represents an industry with more than 1.6 million U.S. retail establishments, more than 24 million employees – about one in five American workers – and 2008 sales of $4.6 trillion. As the industry umbrella group, NRF also represents more than 100 state, national and international retail associations. www.nrf.com.
Very sad news today, as we learn of the passing of the extraordinary journalist and investigative Wall Street Journal reporter, John Wilke. Over the years, John and I exchanged comments on the banking and credit card industry. Click here for more info.
The National Retail Federation (NRF) and the Retail Industry Leaders Association (RILA) will merge into one trade association that cohesively represents millions of workers in the industry, reports the Baltimore Business Journal.
“This is an historic time for our industry. The challenges and opportunities before our members are unprecedented. Now is the right time to bring these associations together,” said RILA Chairman Robert Niblock, CEO of Lowe’s Co. Inc. and NRF Chairman Myron Ullman, CEO of J.C. Penney Co. Inc., in a joint statement.
The combined group, which is currently unnamed, will give members a singular and stronger voice on policy, communications, and public affairs issues in Washington, D.C.; access to events and conferences for members of both groups; focused educational and operational services for independent retailers; and a fully-integrated staff.
Both groups will undergo a due diligence process to complete the merger, which has already been approved by their executive committees. Both associations’ boards must recommend the merger, and both memberships must approve it. The groups expect the deal to be completed by the summer, says the Baltimore Business Journal, with further details to be nailed out in the coming months.
Roslyn, Va.-based RILA has 200 member companies — from Abercrombie & Fitch to Wal-Mart — and it represents more than $1.5 trillion in sales. It employs 30 people.
The Washington, D.C.-based NRF is the world’s largest retail trade association with about 2,500 members, including department, specialty, discount, catalog, Internet, independent stores, chain restaurants, drugstores, and grocery stores. It employs about 100 workers.
According to Canada NewsWire, MasterCard provided the following key points regarding interchange and debit and WayTooHigh.com replied below.
MASTERCARD CANADA: Canada has a well-functioning payments system that provides significant convenience and security to consumers and merchants. It has continued to operate effectively and drive commerce despite a global credit crisis. More than $240 billion in Canadian commerce is expedited on credit card systems annually.
WAYTOOHIGH: Nobody denies that payment cards are convenient and relatively secure. However, these benefits have nothing to do with interchange fees and do not confer upon issuing banks a blank check to extort supracompetitive profits from merchants and consumers through a hidden tax. Price-fixing is illegal!
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MASTERCARD CANADA: A merchant that processes a credit card transaction enjoys guaranteed payment even at a time of increasing consumer default rates.
WAYTOOHIGH: Merchants are not permitted by the Visa and MasterCard rules to separately negotiate for payment guarantee services. This should be a negotiable service subject to competitive forces. Merchants should have the choice of whether to purchase these services from the card networks, from a third party, or not at all. The card networks and issuing banks already include the risk of default in the interest rates they charge to consumers. There is no justification for forcing merchants to cover this cost.
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MASTERCARD CANADA: Merchants benefit from increased sales, improved payment efficiency, reduced cash handling, customer convenience and satisfaction, e-commerce facilitation, international purchase handling, automatic currency conversion and settlement, among other benefits.
WAYTOOHIGH: There are no studies supporting the assertion that card usage increases sales, reduces checkout time, or increases consumer satisfaction. These are simple advertising puffery. To the extent that some of these claims are accurate, they are neither an excuse to price-fix supracompetitiveinterchange fees nor a justifiable expense to force upon merchants without negotiation. Just look at the tricks MasterCard and Visa (both were controlled by thousands of the same member banks) They offer sweepstakes, but the less expensive PIN-based debit cards are ineligible. They charge merchants for the high-costing affinity (frequent flier reward) signature cards, but many consumers never cash in those rewards. And now, the credit card companies are taking back the accrued rewards if a cardholder defaults by a single day, some unscrupulous companies are even paying cardholders to close their accounts, thus also losing those rewards.
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MASTERCARD CANADA: Interchange is a fee that passes between acquirers (who handle card processing for merchants) and card issuers. Issuers receive interchange to compensate them for significant costs and risks borne in offering credit cards including interest-free periods, account management, credit losses, fraud protection and processing.
WAYTOOHIGH: Regarding the assertion that merchants don’t pay interchange, the rebuttal is that the merchant discount rate automatically includes the interchange fee. The rest is mere semantics. Also, why would they talk about benefits to merchants from interchange fees if merchants weren’t paying those fees? Remember: interchange fees were designed forty-years ago, when retailers used antiquated manual credit card imprinters (ScanMyPhotos.com used these way back in the early 1990’s. The fee was cost-based; remember those stacks of carbon-copy receipts? Write a check, which passes through the Federal Reserve network and the there is no clearing (interchange) charge. Use a Starbucks gift card, and there is no interchange fee. Use a shopping mall card, good at multiple merchant locations, and there is no interchange charge. Buy a gift card for any retailer at a supermarket and even though there is a network of payment mechanisms in place, there is no interchange fee. Use a PIN-based Debit card in Canada and there is no interchange fee. Use a credit card in Iceland and… you get the idea. As to the “issuer compensation” argument, many of those expenses should be borne by the consumer, not the merchant (e.g. free funding period). Furthermore, the merchant should not be forced to purchase these alleged services as a price-fixed bundle. These should be available separately and negotiably.
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MASTERCARD CANADA: MasterCard’s Canadian interchange rates remain well below those of other developed markets including the United States and below similar fees for American Express in Canada. A sampling of other countries with higher blended interchange rates than Canada include Argentina, Brazil, Germany, Greece, Indonesia, Japan, Philippines, Poland, Portugal, Switzerland, Turkey and Uruguay.
WAYTOOHIGH: The relevant comparison is not Canada v. Uruguay, it’s competitive v. anticompetitive. The fact that MasterCard’s supracompetitive interchange rates are not quite as inflated in other countries as they are in North America doesn’t render them legal. MasterCard and Visa boast 80% market power and are two giant cartels with, until recently, the same representatives on their board of directors. Collusion, greed, illegal price-fixing and hundreds of billions of dollars paid by consumers and merchants over the years is why this battle may be the largest antitrust case in U.S. history, and why the banks are engaged in a death-spiral battle against its two core customers – consumers and merchants.
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MASTERCARD CANADA: MasterCard receives no revenue from interchange.
WAYTOOHIGH: MasterCard remains a puppet of the issuing banks, who receive enormous amounts of revenue from interchange. How does MasterCard explain the term “Merchant Discount Rate?” So, where do their revenues come from, then?
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MASTERCARD CANADA: Consumers do not pay interchange fees nor merchant fees.
WAYTOOHIGH: As with the argument that merchants don’t pay interchange, MasterCard exalts form over substance. As a practical matter, merchants must build in their overhead costs into the costs of their products. Increasing interchange fees effectively increases the cost of goods just as would increasing the cost of the merchant’s rent or electricity. The nearly $60 billion dollars in merchant interchange fees in the U.S. last year came from somewhere! It is a hidden tax that ultimately, the consumers pay.
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MASTERCARD CANADA: Merchants who choose to accept credit cards pay to participate in exchange for the benefits received. The fee accounts for the multiple benefits received.
WAYTOOHIGH: The idea that merchants “choose” to accept credit cards is a myth. In reality, merchants must accept payment cards in order to stay in business. Furthermore, interchange is not cost-based. If it were, it would be far, far lower. Look at the European Union, where cross-border interchange is mandated to be cost based by law. For Ecommerce businesses, like ScanMyPhotos.com and millions of other online companies we are forced to accept Visa and MasterCard – they have an 80% market power over the industry. Their millions of dollars invested in TV commercials training consumers not to pay with cash is all the more reason why MasterCard and Visa are like drug dealers, they get consumers trained and then force them to use their products. Yes, force, and we can explain why.
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MASTERCARD CANADA: Merchants pay a merchant fee established by their acquirer, not MasterCard. Interchange forms a portion, but not all, of that merchant fee.
WAYTOOHIGH: Interchange accounts for the vast majority of the merchant discount fee and is non-negotiable. The merchant discount fee is always higher than the interchange fee, meaning that merchants effectively pay interchange. If the truth were otherwise, we’d have acquirer lawsuits against the networks and the issuers. Get real, it’s all about MasterCard. Until recently, MasterCard and Visa were just brands (trade associations) fully owned by the banks. Whether the fees go to the banks or the two giant credit card association, the same pockets were being enriched.
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MASTERCARD CANADA: MasterCard’s 2008 adjustment to interchange rates was the first in seven years. Some rates were reduced.
WAYTOOHIGH: Whether or not that’s true, it doesn’t change the fact that the rates are much higher than they would be in a competitive environment (assuming they’d exist at all). Some rates were 300% higher than in 1999. Without warning, millions of merchants receive a twice yearly letter explaining the new rates, just days prior to it taking effect.
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MASTERCARD CANADA: A merchant can obtain his MasterCard interchange rates via www.mastercard.ca. This information has been available for more than two years. [There is a now similar website in the U.S. with more than one-hundred pages of rate schedules].
WAYTOOHIGH: Only two years? Why was MasterCard so secretive before that? Regardless, the merchant has no way of knowing what the interchange rate will be at the time of sale and therefore cannot make an educated decision about whether to accept the card. There is no transparency, and those website rate schedules are unclear and confusing. If MasterCard was honest, they would easily post the exact interchange fee as part of every charge card receipt (right under the sales tax breakdown).
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MASTERCARD CANADA: When interchange was regulated in Australia, it led to reduced card benefits to consumers and there is no evidence that retailers passed on savings in reduced prices.
WAYTOOHIGH: To allege that a reduction in overhead costs for an entire country’s merchants would not result in lower prices is to allege a price-fixing conspiracy among all merchants. If so-called “cardholder benefits” were only available because of a price-fixing conspiracy between issuing banks, we should not lose sleep over the disappearance of those benefits when the conspiracy is busted up. The rule of law is what matters, not cardholder benefits.
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MASTERCARD CANADA: MasterCard Worldwide has a PIN-based debit payment solution – Maestro(R) – used by more than 652 million cardholders in over 100 countries.
WAYTOOHIGH: Perhaps, but that doesn’t justify the price-fixing conspiracy and it doesn’t justify forcing merchants to pay supracompetitive interchange fees. MasterCard and its issuers don’t get a blank check just because they provide some benefits. Banks would need to provide debit cards even if they didn’t get interchange fees. Otherwise, it would be like banks providing a checking account but no checks.
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MASTERCARD CANADA: MasterCard Canada is preparing to expand its global debit processing system in Canada where it would deliver compelling benefits to Canadian consumers and merchants.
WAYTOOHIGH: MasterCard is only increasing its market power so that it can continue to force supracompetitive interchange fees on merchants.
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MASTERCARD CANADA: Using Maestro, Canadian consumers could use debit all over the world.
WAYTOOHIGH: See previous two arguments.
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MASTERCARD CANADA: Accepting Maestro means Canadian merchants could accept international travelers’ debit cards.
WAYTOOHIGH: See above.
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MASTERCARD CANADA: MasterCard will provide technological advancements including greater security and fraud protections, innovations
WAYTOOHIGH: See above.
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MASTERCARD CANADA: MasterCard operates a global debit infrastructure with centralized operations that run 24/7. The system delivers significantly greater scale than Canada’s incumbent debit network. It has had zero downtime in more than seven years.
WAYTOOHIGH: See above.
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MASTERCARD CANADA: MasterCard will create competition in the Canadian debit market where it has never existed.
WAYTOOHIGH: MasterCard is not talking about competition for merchant acceptance, only “competition” for issuing banks, which has the effect of increasing interchange rates at the expense of merchants. Payment cards are a two-sided market (issuance and acceptance) and when MasterCard, Visa and the member banks talk about so-called “competition,” they’re never talking about the merchant side of the market.
According to Reuters, this is the list of credit card industry executives expected to attend the Presidential White House meeting on Thursday, April 23rd.
Larry Sharnak – American Express, Executive Vice President and General Manager, Consumer Cards
Richard Struthers – Bank of America, President, Global Card Services
Congress is trying to rein in other abusive credit card fees, but if they don’t address interchange, they’ll miss the biggest threat of allabout 5 hours agofrom HootSuite
Q: Why hasn’t MasterCard, Visa, Chase, CitiGroup, BofA, etc… not been shut down for collusion and credit card price-gouging. A: Dunnoabout 6 hours agofrom HootSuite
If mortgage rates continue to decline, interest rates being lowered, why are Visa and MasterCard’s credit card interchange fees soaring?about 7 hours agofrom HootSuite
Question for merchants: Credit card processing fees are too high because? Tweet your experience with interchange fees @wayTooHighabout 12 hours agofrom HootSuite
Visa / MasterCard’s long history of anticomptitive price-fixing corrupts smart biz thinking; the marketplace should control competition8:10 PM Apr 17thfrom HootSuite
Q: How can banks (MasterCard / Visa) cite “competitive pressures” regarding need for soaring credit card rates? They own the Monopoly board!4:31 PM Apr 17thfrom HootSuite
For balance, to represent the millions of merchants (consumers) at the White House credit card meeting consider inviting Mitch Goldstone4:03 PM Apr 17thfrom HootSuite
We will be Tweeting non-stop on planned White House meeting on Thurs w/ credit card execs and URGE INTERCHANGE DISCUSSION http://ow.ly/38Q13:59 PM Apr 17thfrom HootSuite
Peter Barnes, Senior Washington Correspondent at FOXBusiness reports on White House / credit card banking exec meeting – http://ow.ly/38Pt3:56 PM Apr 17thfrom HootSuite
4 Karey Wutkowski,Patrick Rucker at Reuters NOTE: Any White House meeting with credit card cos MUST discuss interchange = $60bln annual fee3:49 PM Apr 17thfrom HootSuite
MasterCard increased its network access and brand usage fee from 0.5 cents per transaction to 1.85 cents, a 270% increase http://ow.ly/2LYl3:35 PM Apr 17thfrom HootSuite
Other credit card fee reforms are necessary, but don’t forget about the ~$60,000,000,000 interchange tax on businesses / consumers2:25 PM Apr 17thfrom HootSuite
Did Visa and MasterCard create a non-competitive environment in which businesses cannot negotiate for lower interchange rates? #credit1:40 PM Apr 17thfrom HootSuite
RT @JeffCole53: …credit card companies are like crack dealers, they ruin people’s lives, and then want to sell them even more of the drug10:53 AM Apr 17thfrom HootSuite
Avg. American household paid $427 in credit card interchange fees last year. Total interchange fee revenues have tripled since 2001.9:35 AM Apr 17thfrom HootSuite
Anatomy of How Technology Should Reduce MasterCard and Visa’s Member Banks’ Credit Card interchange Fees – http://ow.ly/2HrO #congress #bank8:10 AM Apr 17thfrom HootSuite
Congress can’t fix the financial services industry without reforming huge, hidden credit card interchange fees. #banking #congress8:05 AM Apr 17thfrom HootSuite
Congress can’t fix the financial services industry without reforming huge, hidden Visa / MasterCard, member banks’ interchange fees7:45 AM Apr 17thfrom HootSuite
in 2008, Americans paid twice as much in interchange fees than in credit card late fees and three times ATM fees!7:30 AM Apr 17thfrom HootSuite
Citigroup revenues neraly doubled to $24.79 billion in JUST the 1st Q. How much was derived from excessive credit card interchange fees?7:19 AM Apr 17thfrom HootSuite
Merchant interchange fees cover reward points for credit cards; when banks force cardholders to close accounts, NO REFUND of paid rewards7:00 AM Apr 17thfrom HootSuite
Merchants (consumers) are paying the interchange credit card fees, which includes funding reward points, but banks keep when accounts closed6:55 AM Apr 17thfrom HootSuite
Retailers across the nation are calling for interchange independence UnfairCreditCardFees.com5:05 AM Apr 17thfrom HootSuite
innovations in electronic payments should increase effeciencies and lower fees, that’s how non-monopoly cartels work9:30 PM Apr 16thfrom HootSuite
Ecommerce companies, like ScanMyPhotos.com and millions of others are forced to accept Visa and MaterCard; they wield 80% market power.5:50 PM Apr 16thfrom HootSuite
Can’t fix the economy and help small businesses without addressing the banks anticompetitive credit card interchange fees4:52 PM Apr 16thfrom HootSuite
$2,100,000,000 Earned in JUST the 1st Q by JP Morgan Chase. How much derived from antiquated credit card interchange fees? http://ow.ly/33ha4:44 PM Apr 16thfrom HootSuite
JP Morgan Chase, named defendant in our merchant antitrust class-action lawsuit against credit card cos reports 1st Q earnings $2.1 bln4:42 PM Apr 16thfrom HootSuite
Using Twitter as forum to humanize and as advocacy channel in battle against Visa, MasterCard credit card fees #banks #credit WayTooHigh.com3:45 PM Apr 16thfrom HootSuite
Visa and MasterCard’s fees MUST be stopped. Now that the U.S. Taxpapers own banks, interchange should disappear3:40 PM Apr 16thfrom HootSuite
Visa and MasterCard, two ‘competitors’ announce price increases of nearly 300 percent at the same time in a recession? – http://ow.ly/2LYH3:35 PM Apr 16thfrom HootSuite
Little transparency for interchange fees that banks pay each other for each credit, debit card and ATM transaction made by customers.1:35 PM Apr 16thfrom HootSuite
Seeking transparancy of Visa asnd MasterCard interchange rates. There is transparacy in Europe and AUS.11:36 AM Apr 16thfrom HootSuite
Rules by Visa and MasterCard are more than 1700 PAGES. Can’t discount for cash, can’t surcharge. can’t print out on receipt the fees11:35 AM Apr 16thfrom HootSuite
Tweeting on local and national small business leaders discussing the looming threat to economy by hidden credit card fees – interchange11:35 AM Apr 16thfrom HootSuite
Fighting interchange fees as Visa and Mastercard continue to raise credit card merchant interchange fees payment expense up 800+% since 199511:32 AM Apr 16thfrom HootSuite
Seeing D.C. support. Petro industry had $3.4 bln in profits last year. $7.6 bln in credit card fees.11:31 AM Apr 16thfrom HootSuite
One PA family business saw $4.6 mln in credit card fees, $1.0 mln more than prior year. Fed Up with Visa and MasterCard11:30 AM Apr 16thfrom HootSuite
Impact of uncontrolled crdit card fees on supermarkets and Main Street is devistating. Retailers are “madder than hell” at credit card cos.11:28 AM Apr 16thfrom HootSuite
Interchange is a nationwide proble,. Supermarkets after tax profit is about 1-2%, thus LESS THAN COST FOR CREDIT CARD FEES = LOSS11:28 AM Apr 16thfrom HootSuite
PA state wide trade assn is talking. Own about 6,000 stores in PA. Over past 5 years, members said interchaneg is fastest growing TAX11:27 AM Apr 16thfrom HootSuite
POLAND ABOLISHED INTERCHANGE FEES. EU rate is about 0.30%. U.S. about 2.0% for credit card merchant interchange fees11:26 AM Apr 16thfrom HootSuite
ONLY ABOUT 13% is used to cover COST OF INTERCHANGE electronic payment fees. U.S. pays HIGHEST RATE in WORLD11:26 AM Apr 16thfrom HootSuite
WHEN YOU PAY CASH, low interchange fee card, FOOD STAMPS, CHECKS, cover high reward cards (signature affinity cards)11:25 AM Apr 16thfrom HootSuite
When you write a check. NO INTERCHANGE FEE. Mercjhant, however only gets ~98% back from credit card fees11:24 AM Apr 16thfrom HootSuite
CONSUMERS don’t know about interchange fees. About 2% per transactions. [about 100 separate rates].11:23 AM Apr 16thfrom HootSuite
FIGHT against unfair credit card fees. Seeking legislative action. Credit card interchange fees HIDDEN.11:23 AM Apr 16thfrom HootSuite
Taylor West intro: Lyle Beckwith, National Assn Convienence Stores (NACS) representing retailers nationwide11:22 AM Apr 16thfrom HootSuite
Stand by for live Tweeting from NEWS CONFERENCE [ Pennsylvania Retailers Urge Rep. Gerlach to Take Action] #Mastercard #Visa #banking11:18 AM Apr 16thfrom HootSuite
Apple is about to sell its 1 billionth iPhone app, but think of all those micro-payment credit card interchange fees on 99-cent orders!10:35 AM Apr 16thfrom HootSuite
@WayTooHigh will be Tweeting LIVE from today’s press event. #MasterCard #Visa #banking #charge #credit card #interchange #bank fees10:15 AM Apr 16thfrom HootSuite
Telephone Press Conference Calling on Rep. Gerlach to Stand with Pennsylvania Consumers and Small Businesses – Credit Card Fees9:49 AM Apr 16thfrom HootSuite
Local and national small business leaders will host a conference call with state reporters to discuss hidden credit card fees; interchange.9:47 AM Apr 16thfrom HootSuite
It’s not often that the credit card industry faces a defeat in D.C. until now, watch video http://ow.ly/2FLz #charge #banks #TARP #antitrust9:45 AM Apr 16thfrom HootSuite
Q: Why hasn’t MasterCard, Visa, Chase, CitiGroup, BofA, etc… not been shut down for collusion and credit card price-gouging. A: Dunno7:00 AM Apr 16thfrom HootSuite
RT @marktzk: USAir is unilaterally canceling my BofA Visa miles card and issuing a Barclay’s Mastercard instead. Looking for a new card now6:32 AM Apr 16thfrom HootSuite
Did you know that there are no electronic payment merchant interchange fees for check clearing?6:40 PM Apr 15thfrom HootSuite
RT @NiamhD: I really hate when you check your bank account and the back have taken notified fees that you weren’t notified about…4:50 PM Apr 15thfrom HootSuite
RT @EFFIE325: @EVERYONE I’M ANGRY AT CREDIT CARD COMPANIES…THEY ARE RUINING ARE SCORES BY REDUCING OUR LIMITS PEOPLE COMPLAIN TO CONGRESS4:27 PM Apr 15thfrom HootSuite
RT @SeanMiller: Does anyone else hate Bank of America? 8 Overdraft Fees? Now I’ve been on hold all morning. Sweet.4:26 PM Apr 15thfrom HootSuite
Question for retailers: Credit card processing fees are too high because? Tweet your experience with interchange fees @wayTooHigh4:22 PM Apr 15thfrom HootSuite
AARP Magazine: Protect Your Priceless Photos – Let a scanning company digitize your pics. It’s cheap and easy as can be – http://ow.ly/2YoL3:28 PM Apr 15thfrom HootSuite
in 2008, Americans paid twice as much in interchange fees than in credit card late fees and three times ATM fees!2:55 PM Apr 15thfrom HootSuite
Happy that credit card interchange issue is being noticed by Chris Dodd and D.C. helps establish his independence from banking industry12:08 PM Apr 15thfrom HootSuite
Did you Know: The actual cost to transact an electronic payment is a tiny fraction of the total fees collected8:40 AM Apr 15thfrom HootSuite
The credit card interchange fee = biggest tax you’ve never heard of. Nearly $2 of every $100 charged goes directly to credit card industry8:30 AM Apr 15thfrom HootSuite
Merchant interchange fees cover reward points for credit cards; when banks force cardholders to close accounts, NO REFUND of paid rewards6:50 AM Apr 15thfrom HootSuite
RT @Whynatte: The US Airways flight attendant literally spent 15 minutes trying to sell a VISA card to passengers over loudspeaker.7:37 PM Apr 14thfrom HootSuite
RT @SuziB777 So they are saying the economy is coming back please tell my bus. bank account isn’t seeing any comebacks,,,, higher more fees7:29 PM Apr 14thfrom HootSuite
RT @DebtLawyer: Credit card companies are inclined to settle with card holders who are experiencing a genuine financial hardship.6:50 PM Apr 14thfrom HootSuite
Thanks to Twitter, retailers and consumers have instant updates in the war against Credit Card Cos; Visa, MasterCard and its member banks3:42 PM Apr 14thfrom HootSuite
When Visa and MasterCard began, there wasn't Twitter to provide instant updates on their anticompetitive price-fixing.3:40 PM Apr 14thfrom HootSuite
RT @ms_elyse: just watched this documentary on Showtime called Maxed Out about credit card companies and debt. Everyone should watch it3:37 PM Apr 14thfrom HootSuite
in 2008, Americans paid twice as much in interchange fees than in credit card late fees and three times ATM fees!2:30 PM Apr 14thfrom HootSuite
The credit card interchange fee = biggest tax you've never heard of. Nearly $2 of every $100 charged goes directly to credit card industry2:30 PM Apr 14thfrom HootSuite
Merchants (consumers) are paying the interchange credit card fees, which includes funding reward points, but banks keep when accounts closed1:55 PM Apr 14thfrom HootSuite
Congress can't fix the financial services industry without reforming huge, hidden credit card interchange fees. #banking #congress8:05 AM Apr 14thfrom HootSuite
Congress can't fix the financial services industry without reforming huge, hidden Visa / MasterCard, member banks' interchange fees6:45 AM Apr 14thfrom HootSuite
DOUBLE TAXATION: MasterCard and Visa gift cards charge purchase fees ~$5.95 plus merchant pays interchange fees6:20 AM Apr 14thfrom HootSuite
Are Visa and MasterCard illegally fixing the fees charged to merchants who accept their cards? #banking #credit11:35 PM Apr 13thfrom HootSuite
Did Visa and MasterCard create a non-competitive environment in which businesses cannot negotiate for lower interchange rates? #credit9:40 PM Apr 13thfrom HootSuite
More bad news for MasterCard, Visa and the banking industry: Minnesota court ruled in favor of Al Franken in his 2008 Senate race9:20 PM Apr 13thfrom HootSuite
MasterCard increased its network access and brand usage fee from 0.5 cents per transaction to 1.85 cents, a 270% increase http://ow.ly/2LYg5:35 PM Apr 13thfrom HootSuite
Non interchange. win 1 for the entrepreneur, ScanMyPhotos.com named #16 - Web100.com Top 100 photography-themed websites http://ow.ly/2MxZ5:27 PM Apr 13thfrom HootSuite
Good bye credit card Interchange Fees!!! Court ruled in favor of Al Franken, one less (R) Senator5:12 PM Apr 13thfrom HootSuite
More bad news for MasterCard, Visa and the banking industry: Minnesota court ruled in favor of Al Franken in his 2008 Senate race5:10 PM Apr 13thfrom HootSuite
Breaking News: Franken Declared Leading Vote-Getter in Minn. Senate Race5:09 PM Apr 13thfrom HootSuite
Visa and MasterCard, two ‘competitors’ announce price increases of nearly 300 percent at the same time in a recession? - http://ow.ly/2LYx4:35 PM Apr 13thfrom HootSuite
Are Bank of America and Citicorp planning another fee hike and trying to get it done before the new legislation? Is it retroactive?4:30 PM Apr 13thfrom HootSuite
Visa, MasterCard credit card interchange fees are excessive and abusive, but their 80% market power = don't care4:05 PM Apr 13thfrom HootSuite
Visa and MasterCard's fees MUST be stopped. Now that the U.S. Taxpapers own banks, interchange should disappear3:50 PM Apr 13thfrom HootSuite
Did you know, when you use your debit Pin-based card as a credit card, your funds are removed just as fast, and retailers pay MORE3:50 PM Apr 13thfrom HootSuite
Q: Why hasn't MasterCard, Visa, Chase, CitiGroup, BofA, etc... not been shut down for collusion and credit card price-gouging. A: Dunno3:46 PM Apr 13thfrom HootSuite
Using Twitter as forum to humanize and as advocacy channel in battle against Visa, MasterCard credit card fees #banks #credit WayTooHigh.com3:31 PM Apr 13thfrom HootSuite
innovations in electronic payments should increase effeciencies and lower fees, that’s how non-monopoly cartels work3:30 PM Apr 13thfrom HootSuite
Banks are like drug dealers – they can’t resist Interchange profiteering; leading to billions in toxic creditcard debt : U.S. is bailing out2:40 PM Apr 13thfrom HootSuite
Avg. American household paid $427 in credit card interchange fees last year. Total interchange fee revenues have tripled since 2001.2:35 PM Apr 13thfrom HootSuite
Chase added a $10 monthly fee and increased the minimum payment from 2% to 5% for those who carry a large balance.2:35 PM Apr 13thfrom HootSuite
Other credit card fee reforms are necessary, but don’t forget about the ~$60,000,000,000 interchange tax on businesses / consumers2:25 PM Apr 13thfrom HootSuite
A leading argument to sustain soaring merchant interchange credit card fees is to cover the cost of affinity reward programs. The banks were passing along the frequent flyer reward costs to merchants, and thus consumers, who are the ones buying the merchandise.
Now that millions of cardholders are losing their accounts, those rewards are being terminated as well. When a cardholder is delinquent on their credit card bills by even a day, they risk losing all their accumulated reward points as well.
Well, what is it? If interchange fees are lowered, Visa and MasterCard’s argument is that consumers will have to pay higher fees. As it is, the banks are already raising rates, closing accounts and changing the terms with wanton disregard for their customers.
In baseball, it is easy to keep score – look at the scoreboard. In politics – read the polls. But, for interchange fees, run by the banking cartel, there is little notice, other than those bi-annual fee “adjustment” letters. As retailers continue battling against MasterCard and Visa – the two leading credit card associations with 80% market power and its member banks, it is also easy to keep score.
With nearly 1,300 postings on WayTooHigh.com- The Credit Card Interchange Report, we have yet to read any pro-interchange fee blogs that weren’t connected with the banking industry and their paid advocacy firms.
Well, there is always that one “pro consumer,” “pro competition” group that “enjoys the financial support of Visa,” but that really shouldn’t count. Where are the merchants championing 1.7% interchange fee rates, and challenging WayTooHigh.com?
Where are the U.S. retailers thanking Visa® and MasterCard® for charging among the highest rates in the world, while abroad, the interchange fees are 0.7%, 0.5% and even 0.0% – there are no interchange fee for debit PIN-based cards in Canada.
The reason for such silence?
Merchants understand they are being taken on a ride when cardholders present their affinity frequent flyer cards. The merchants, and thus the consumers are paying for these perks and the nearly $40 billion a year in interchange fees. Since we were the first to launch the merchant interchange litigation back in mid-2005, there have been no pro-interchange fee blogs that we are familiar with. That speaks volumes about our cause and the unfair fees.
Have you noticed the growing prominence of gift card kiosks filling up the end caps at many supermarkets and other retail locations? You can purchase gift cards for a variety of products, restaurants, attractions and unrelated shopping experiences.
Here is how gift cards work when you buy it at a supermarket or other large retailer:
You choose the value and brand, then their sales clerk rings up your order and validates the electronic payment card. Think of all the payment networks that are involved?There is an acquiring and issuing institution as the supermarket transaction is processed by a third party that pays the company issuing the card. There are added costs to print, merchandise and process the transactions. Yet, there are no added fees, unlike if you select a Visa or MasterCard branded gift card, where you pay an upfront fee of about $4.99 or higher, plus being forced to pay a monthly charge for non-use and other fees; think of Ticketmaster and all their extra charges.
The difference between the store electronic gift cards and those branded by Visa and MasterCard are they are without standard interchange fees. Those store-branded plastic gift cards are being transacted through an electronic payment network, but also without a monthly “maintenance” fee that Visa and MasterCard can separately impose.
Also absent are those mentioned fraud costs and other extra fees that Visa and MasterCard regularly present to try justifying their nearly 1.7% merchant interchange fee for transacting an electronic payment on the two leading credit card payment networks in the U.S., overseas, the interchange fee can be as low as .5% in Australia, .7% in the UK and zero in Canada for Pin-based debit card transactions.
I also don’t think regular store-branded cards charge a per transaction fee, which Visa and MasterCard can tack on of about 35-cents for each charge.
Many of the store gift cards can be used at multiple locations and even for ordering on their website for electronic payment transactions. Airline gift cards can be used at multiple airports, hotel gift cards can be used system wide at all their locations, yet they are without those interchange fees.
Micro balances on Visa and MasterCard gift cards are nearly a pure tax, as it is challenging to use those small amounts. And often merchants can’t process those small amounts. I tried it at a Chevron gas station, when I had a 35-cent balance and the card was denied. However, look at Starbucks and thousands of other merchants who will give you cash back. In California, it is a state law that when asked, stores must give shoppers cash back when the balance on the store gift card falls below ten dollars.
The moral is that retailers understand that gift cards are a benefit and provided value added sales, while the banks use credit and debit cards as a decades-long scheme to take on added fees just because they can. As more attention is being publicized on this issue, Visa and MasterCard’s monopolistic 80% market power and cartel-like control are angering many.
Although the letter was dated in mid-March, ScanMyPhotos.com, like millions of other merchants received the new rate schedules just days before the April 1st increase. As is a tradition, twice each year, we regularly receive these letters announcing the new Visa and MasterCard merchant fees.
Even as the lead plaintiff in a merchant interchange antitrust suit against Visa, MasterCard and its major (still solvent) member banks, I have no clue what the new rates are. Now, they just direct you to a website to review the merchant interchange fee rates.
VISA USA INTERCHANGE RATES (The new, April 1, 2009 rates, although in effect are unknown, as they have yet to be updated as of 7:30 pm (PDT, Wed, April 1, 2009)
WASHINGTON — New transaction fee rate increases announced by credit card companies Visa and MasterCard are slightly under 2 cents per affected transaction, yet are expected to raise more than $600 million in revenues, according to a report by DigitalTransactions.com
MasterCard will increase its “Network Access and Brand Usage Fee” April 17, from 0.5 cents per transaction to 1.85 cents—a 270 percent increase—while Visa will increase its “Acquiring Processing Fee” from 0.5 cents to 1.95 cents—a 290 percent increase, with additional fees possible, according to NACS—the Association for Convenience and Petroleum Retailing, which opposed the proposed hikes.
“This begs the question: How can two ‘competitors’ announce price increase of nearly 300 percent at the same time in a recession?” NACS Senior Vice President of Government Relations Lyle Beckwith said in a statement. “From what we’ve seen with credit card interchange fees, the answer is obviously that two competitors with excessive and abusive market power can do what they want.”
Merchant-acquiring experts expect merchants to bear the cost of these fees because acquirers will simply pass them through to clients. “The ones we’ve talked to aren’t too excited about it,” an acquiring executive, who asked for anonymity, told the Web site. “It’s one of the bigger fee hikes.”
In a statement Visa told DigitalTransactions.com: “Visa Inc. regularly reviews its pricing, as any business would, and makes adjustments where appropriate depending on such factors as the value delivered to clients and the need to be competitive. Over the years, Visa has become a symbol of international acceptance, reliability and convenience, based on its commitment to provide superior value to clients. These clients, in turn, are able to offer competitive products and services to their customers. Financial institutions set their pricing to cardholders and merchants.”
In 2007, credit card fees cost convenience stores $7.6 billion, with the largest component being credit card interchange fees, which are a fixed fee and a percentage of each transaction, according to NACS. These fees average 1.8 percent in the U.S., which has the highest interchange rate of any industrialized country.
“The credit card fees that U.S. retailers pay are outrageous,” Beckwith said. “These newly announced fee increases are beyond outrageous. At a time when small businesses are feeling the economic pain of the recession, it is unconscionable that Visa and MasterCard can give themselves their own ‘bailout’ by slapping 300 percent increases on their fees.”
A coalition of retailers today launched a campaign to lobby Congress to require credit card companies to negotiate with retailers in an effort to lower the “interchange” fee, averaging 2 percent, that retailers pay on each credit card transaction.
The Merchants Payments Coalition launched the campaign this morning during a telephone press conference with representatives of the National Retail Federation, the Food Marketing Institute, the National Grocers Association and the National Association of Convenience Stores.
According to Reuters, next week the US Senate Banking Committee will meet to discuss new credit card legislation.
Areas of focus will be on prohibiting credit card solicitation to people under 21, and the current ability to change and terminate a cardholders account for any reason and at any time.
According to Reuters, “the Government Accountability Office, a congressional audit group, to study the effects of so-called interchange fees on consumers and merchants. Interchange fees are the cost for transacting purchases using an electronic payment system operated by Visa Inc and MasterCard Inc. In the House, the Judiciary Committee has been examining the issue.”
Another reason why interchange fees don’t make “cents” for consumers, but dollars for Visa, MasterCard and its thousands of [still solvent] member banks.
Part of MasterCard, Visa and its member banks’ argument in support of merchant interchange fees is to fund their marketing rewards programs. Retailers are taken on a ride every time a cardholder receives “free” miles for electronic payment transactions. This expense should not be the burden of merchants and cardholders, but an expense covered by the electronic payment networks and its member banks.
Today, we learn that charge card companies are encouraging some cardholders to terminate their relationship. These credit card companies are providing cash incentives, but you may lose your accumulated membership reward points. Default, delay a payment, or cash out, and you risk losing all those reward benefits, even those retailers were already charged for covering these spiffs. If that is the case, shouldn’t the banks and card companies also refund the retailers for overcharging to cover these unused rewards?
Separately, as more information on Washington’s economic stimulus plan is analyzed, it is becoming clearer that entrepreneurs, which represent much of our nation’s innovations and economic strength is left out from benefiting by the cash infusions. One immediate way to jump start the economy is to force MasterCard, Visa and its member banks to terminate its merchant interchange fees. Now that taxpayers own vast equity in the banks (which own nearly half ownership in MasterCard and Visa) this is the opportunity to require the banks to act now.
This nearly $60 billion dollar expense accounts for nearly 1.7% of all sales when credit cards are used. This plan would immediately return what in many cases is the difference between profits and losses back to retailers and American consumers.
A solution to immediately create bank-funded stimulus package that instantly gets capital into the hands of small businesses and consumers – end Visa and MasterCard’s and its member banks credit card interchange fees.
WayTooHigh.com: The Credit Card Interchange Report, is co-edited by Carl Berman and Mitch Goldstone, founders of California-based 30 Minute Photos Etc., the national online boutique photo service, 30minphotos.com and its newest division, ScanMyPhotos.com. Berman and Goldstone are also the lead plaintiffs and class representatives in the multi-billion dollar antitrust class-action litigation against Visa, MasterCard and member banks. This informational web site was created to provide news and commentary updates only. None of the information posted on WayTooHigh.com is intended to constitute legal arguments; it reflects only the opinions of its co-editors and not of any other plaintiffs or other parties involved in the merchant antitrust litigation. The information is not guaranteed to be correct, complete, or current. We make no warranty, express or implied, about the accuracy or reliability of the information posted by WayTooHigh.com or at any other Web site to which this site is linked.
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