"Open letter and invitation to ACEC national chairperson, Susan Molinari" (source: WayTooHigh.com)

October 31, 2005

October 30, 2005

Ms. Susan Molinari
National Chairperson
Americans for Consumer Education and Competition
, Inc.
1023 31st Street, N.W.
Washington, D.C. 20007

Dear Ms. Molinari,

I applaud the monumental attention you have articulated in urging consumers to use debit cards “as a wise budgeting tool” and to also help limit overspending.

Based on your April 29th press release where you explained that “debit cards are fast becoming the card of choice for savvy consumers,” as national chairperson of Americans for Consumer Education and Competition, your support can help advocate for an even better budgetary tool – cash.

Consumer groups across the nation are exploring a novel campaign for Friday, November 25th called “A Day Without Credit Cards, A Day With Cash.” This national campaign on America’s busiest shopping day is being considered to draw attention to the billions of dollars in hidden taxes that consumers pay each year to Visa and MasterCard in merchant interchange fees.

This campaign would be lead by many consumer groups and only be directed towards retail stores and not ecommerce businesses. More information is available on The Credit Card Interchange Report: WayTooHigh.com, which I co-edit.

In the coming days, as this campaign gains traction and media viability, your participation would especially help draw attention to the anticompetitive issues, especially as banks acquire the few remaining independent firms. It will also further your advocacy on behalf of educating consumers to better budget their spending, especially on November 25th.

Therefore, I extend this invitation for you to join “A Day Without Credit Cards, A Day With Cash.” By lending your name and support, you would be prominently listed as one of the thousands of business leaders supporting this initiative.

Thank you for your consideration.


Mitch Goldstone
Co-editor, The Credit Card Interchange Report: WayTooHigh.com
President & CEO, 30 Minute Photos Etc., 30minphotos.com


Last year’s $26 billion hidden consumer tax expected to skyrocket

October 30, 2005

If you thought $26 billion in annual merchant interchange fees was way too high, that indignity is perched on the launch pad and about to skyrocket.

In a statement today, the editors of The Credit Card Interchange Report: WayTooHigh.com warned that the lofty bank earnings are corroborating a frightening new hold up on Americans with even greater intensity.

What distinguishes this assault and economic threat on consumers and an old-fashion, 1800s-style train robbery is that few understand this prowl.

Visa and MasterCard, which are owned by the leading banks are eclipsing even the audacious oil industry’s record assault on consumers. The prevailing sentiment is now that the windfall gains from merchants credit card fees are expected to rocket upwards.

The banks $26 billion windfall will be eclipsed by new results due to higher gas prices, warned The Credit Card Interchange Report: WayTooHigh.com

Because the banks get a piece of the action from motorists credit and debit card charges — and with companies like ExxonMobil reporting sales of a billion dollars a day — the ingredients are there to break records. With unbridled access to fix the prices that retailers pay, the banks could fetch billions more.

[source: WayTooHigh.com]

Britain’s Competition Watchdog Wants to Cut Fees (The Economist)

October 28, 2005

Issuers of credit cards are unpopular everywhere these days, and Britain’s are no exception. Banks are grimly hanging on to £1.5 billion ($2.7 billion) in annual revenue that will be cut dramatically if the British consumer watchdog forces the world’s two biggest credit-card associations and their bank members to reduce controversial charges.

The so-called interchange fees account for around 15% of credit-card income in Britain, according to Mercer Oliver Wyman, a consultancy, a big whack for an industry that is struggling to keep profit margins steady.…

[source: The Economist, subscription required, click here to view article]

Guess who earned even more than oil companies?

October 28, 2005

Oil and apples – ExxonMobil uses advertisements to point the finger at bank earnings
Do you remember when you were younger and in the center of a deafening quarrel with a sibling? When caught by a parent, you would point the finger and explain how your transgression was less grievous.

But, when you have the resources of ExxonMobil and billions of dollars at your disposal, don’t just point the finger, buy full-page advertisements in papers like “The Washington Post.”

That is exactly what ExxonMobil did.

Apologetically, they prepared America for record earnings by explaining “when you compare profits per dollar of revenue across a wide range of U.S. companies you see that oil earnings are not out of step with other major industries.” The oil giant ended up announcing its daily sales were more than $1 billion a day. One-billion Dollars every single day! And even then, the company ran advertisements pointing the finger at the banks for earning even more.

The oil industry actually endeavored to justify its windfall profiteering by pointing the finger at …. the banking industry. Their “Business Week” and “Oil Daily”-provided chart explained that among the average industry earnings banks scored highest. This is no surprise when you take a look at their quarterly results and double-digit profits generated from credit card interchange fees. This $25 billion annual hidden tax on consumers is so vast that even the oil companies are looking up at them.

No surprise.

As gas prices doubled, so to have the banks’ earnings. Because they own the Visa and MasterCard charge card associations they too realized windfall profits; motorists more frequently used their credit cards and paid upwards of $1.50 per fill up just on interchange fees to the banks.

[Source: WayTooHigh.com]


October 28, 2005

Not just did WayTooHigh.com register a record number of visits on Oct 26th, but it was noticed by all the major banks. It even attracted national media inquiries as well.

From conversations with typical shoppers across the country and consumer advocacy groups, many are urging the launch of this pro-commerce, pro-consumer grassroots campaign next month.

A decision will be announced shortly about using the day after Thanksgiving to draw attention to the hidden tax on consumers from banks’ interchange fees.

“Even Washington lobbyist, Susan Molinari’s Visa USA funded organization should applaud this campaign. After all, she recently urged consumers to use debit cards as budget advice for transacting business (‘Debit Card Becoming Card of Choice for Good Reasons). If Ms. Molinari likes debit cards, surely, she will love consumers using cash,” suggested Mitch Goldstone, co-editor of The Credit Card Interchange Report: WayTooHigh.com.

See Oct. 26th “A Day Without Credit Cards – A Day With Cash” posting.

More Trouble Abroad For MasterCard (Bloomberg)

October 28, 2005

MasterCard faces fee charges – 2005-10-28 – Shanghai Daily

EUROPEAN regulators may accuse MasterCard International Inc, the world’s second-biggest credit card company, of overcharging retailers for cross-border transactions, people involved in the investigation said.

The allegations by the European Commission, the Brussels-based antitrust regulator of the European Union, follow a warning two years ago that MasterCard may be engaging in anti-competitive practices that violate EU laws.

Britain’s Office of Fair Trading said in September that a fee agreement between card issuers and banks that collect payments from stores restricted competition. MasterCard said the ruling may have a “significant adverse impact” on its business. European transactions for the New York-based company rose 14 percent to US$83.2 billion in the second quarter.

“Companies say that these rulings affect their revenues because transaction costs don’t go away and they need new ways to get their revenue back,” said Richard Rolfe, editor of the European Card Review in England, a magazine covering the credit-card industry.

MasterCard isn’t aware of any new EU accusations, said Louise Herbert, a company spokeswoman. “We’re waiting to hear more from the European Commission,” she said.

Jonathan Todd, a commission spokesman, said “the inquiry is ongoing.” At issue in the EU probe are fees that banks in the MasterCard system charge each other to process cross-border transactions, said the people, who declined to be identified.

The so-called interchange fees are passed on to retailers and represent the merchants’ largest cost in accepting MasterCard payments.

MasterCard doesn’t disclose the size of the fees, which is unfair to both the retailers and potential competitors, the EU said two years ago.

Visa, the world’s largest credit-card company, agreed in 2002 to cap and cut retailers’ fees for cross-border transactions by 2007, settling a European antitrust probe.

[Source: Shanghai Daily; Bloomberg]

"A Day Without Credit Cards – A Day With Cash" (commentary: WayTooHigh.com)

October 26, 2005

What would happen if on Friday, November 25th, consumers across America chose cash and checks to shop?

Imagine. It is the busiest shopping day of the year, Friday, November 25th and consumers used just cash and checks to shop.

WayTooHigh.com is evaluating a proposal for an exploratory launch of a national campaign next month to draw attention to the bank-owned credit card associations’ interchange fees. This idea was suggested by consumers and is independent from our role as lead plaintiffs in the credit card interchange litigation.

The genesis for creating an exploratory survey to determine the viability of this initiative began locally at 30 Minute Photos Etc. We noticed that more of our retail customers began paying with cash and writing checks; most are familiar with our role in the antitrust case. Several people asked if we could expand their individual protests on a larger scale. However, such action would have to come from consumer groups. Personally, we are against boycotts, but think this call to action has some merit.

If implemented, A Day Without Credit Cards – A Day With Cash” will draw extensive attention and engage additional conversation in the mounting battle against credit card interchange fees.

Widespread support from shoppers and consumer groups thoughout the nation would be necessary and the campaign would have to be implemented by consumers, not retailers.

Among the recommendation to us were that debit, ATM and check cards should also not be used on that day. Many merchants are unaware that when they swipe a debit card as a credit card transaction they are charged as if it was a credit card. While the consumer has the funds immediately withdrawn from their account, the retailers can pay upwards of 2.5%, rather than just a flat fee. On a $1,000 transaction, those debit cards can cost a merchant $25.00, rather than just .50 – .75 cents.

In advance of the single busiest shopping day of the year, the initiative would recommend consumers choose another form of payment. Consumers would be sending a blaring signal to Visa and MasterCard in protest against their collusive practices that force retailers to pay whatever rates the banks want to charge.

Ecommerce businesses would be exempt from “A Day Without Credit Cards – A Day With Cash.” We do not want to impact or affect any commerce, especially online businesses. Besides they are already entirely obligated to Visa and MasterCard by effectively being forced to accept those cards. Ex: One-hundred percent of all transactions through 30 Minute Photos Etc., the national online boutique photo service is credit card based; so too are most Ecommerce businesses. Whether it is 30 Minute Photos Etc., or giants like Travelocity and Amazon.com, online orders usually require credit card payments.

The objective is to educate, not impair commerce.

As background, the co-editors of WayTooHigh.com have launched a series of previous national grassroots initiatives, including:

o An event that brought 5,000 people to NYC on Veteran’s Day – two months after “9/11” to support the airlines, commerce and “The Big Apple.”

o A year later, “Fly With Courage” was created to demonstrate that flying on Sept 11, 2002 was safe and necessary to support the airline and travel industry.

o Last Summer, “Support the Games” brought business leaders to Athens to help fill the stands when few tourists wanted to risk attending the Olympics.

o In January of this year, “Operation Photo” raised used-digital cameras which were donated to families across the country through Operation HomeFront, a military family support service. Using photography, the cameras helped bridge the divide and boost morale due to the effects from Americans being deployed abroad. More background info is available on the 30 Minute Photos Etc., “In the News” website

[Ed note: 30 Minute Photos Etc. is owned by the lead plaintiff and class representative in the antitrust litigation against the credit card associations and major banks. The company’s founders, Carl Berman and Mitch Goldstone are also co-editors of “The Credit Card Interchange Report: WayTooHigh.com”]

For more info on how you can assist in this exploratory evaluation please contact: corpcommunications@30minphotos.com

[Source: WayTooHigh.com]