Four-million "pay-pass" cards are another four-million more reasons to end Interchange fees (Commentary: WayTooHigh.com)


Decades ago interchange fees were justified as a cost-based program where manual imprinters and clearing houses to process carbon copy receipts were used. Now with “pay-pass” and high speed communication systems, the cost to transact a charge is even less. Soon, with touchless charge devices, the cost will plunge even lower, yet merchant fees — and the best kept hidden-tax-on-consumer-secret continues to rise.

During an industry conference on Monday, MasterCard [as reported by Reuters] explained that its planned IPO would “help quell criticism from merchants and others, who charge that its current structure [which foes characterize as a cartel of competing banks setting transaction fees in concert] represents a violation of U.S. antitrust laws.”

Right they are, but it is decades to late.

Selling off part of their legal liability to the public is wrong, but at least they are acknowledging what merchants already know. The problem is that these interchange fees are not nickel and dime indiscretions.

While the banks’ illegal antitrust cartel earn billions of dollars in profits each year at the expense of shop owners and mom’s buying groceries, their credit card associations are finally being undressed.

Most recently, the card marketers launched an advanced, high-tech radio-frequency “pay-pass” chip so customers can easily transact business by waving their cards near electronic receivers. By year-end there will be four-million “pay-pass” cards saving the banks money, but not consumers because the interchange fees keep on rising.

Soon, your credit card will be part of your cell phone. This will further help lower the banks cost to transact a charge, but don’t count of MasterCard and Visa to pass along the savings. As it is, they earn as much as $1.50 everytime you fill up your car; with the speedy “pay-pass” addition, this means they get your money even faster.

(source: WayTooHigh.com)

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