Appearance: Banks and Oil Companies Enjoying U.S. Energy Crisis (

July 28, 2006

$100,000,000,000 in sales by just one oil company in 90-days.

If you think that amount and a 36% quarterly rise in earning by the Exxon Mobil® energy giant is staggering, look at the banks. Charge Card holders are paying almost $2.00 for each fill-up to Visa®, MasterCard® and their member banks. Much of these unbridled interchange fees are based on a percent of each sale, which translates into unparalleled windfall profiteering.


Shouldn’t Lower Marketing Costs Reduce Interchange Fees? (

July 26, 2006

Billions of Wasted Direct Mail Litter Might End

While the credit card associations and their member banks talk up the costs behind electronic payments, we took a closer look.

According to Visa® and MasterCard®, fraud and processing costs are largely responsible for interchange fees. However, with new technologies those costs should be marginalized.

Although technology is more advanced in the United States than abroad, many other countries maintain comparatively fractional interchange rates. Some even have zero fees, such as the Canadian PIN network, even check writing has a zero interchange fee – although the processing and clearing expenses are significant.

A leading justification by the card issuers for high fees also relates to marketing expenses. Visa and MasterCard’s member banks mail out more than 5-billion direct mail solicitations each year. In prior postings, we questioned this strategy. In an attempt to limit their fraud exposure they should also reduce these solicitations to non-credit worthy cardholders and the billions of other wasted direct mail garbage that litters our landfills. This could help remedy the add costs shouldered by retailers and consumers. It also provokes more questions about collusive price-fixing by agreement.

Now they are responding.

According to The Wall Street Journal and other media sources, the ineffective junk mailings will be reduced. Card issuers will begin to use other methods to promote their products, such as through automatic teller machines, onsite at bank branches and on the Internet. Even non-traditional retail and other outlets are being used to solicit new customers.

These added cost savings might be a precursor for preparing the card issuers to finally begin slashing these unjustified interchange fees.

[Source: commentary, with background news from the WSJ]

"Credit Card Cos to Pay $336 Mln Over Currency Fees" (Reuters)

July 26, 2006

According to Reuters, MasterCard Inc. has agreed to pay $72.48 million as its share of the foreign currency conversion fee settlement.

[Source: via Reuters]

"Consumer Groups Demand Credit Card Fee Probe" (BankNet 360)

July 24, 2006

Gas Prices Hit All Time High (AP)

July 24, 2006

As we prepare for the oil companies to shock the world with another quarter of record results, remember that the credit card associations’ member banks are also involved.

Months ago, full-page advocacy advertisements in major U.S. papers downplayed the oil industry earnings. In some cases the finger of greed was directed at the banks.

ExxonMobil® in more delicate words proclaimed that the banks are even greedier* then them. They explained that on a comparable return on each dollar of sales, they lagged far behind other industries like the banking sector.

With gas prices at all time highs, the credit card associations’ member banks are sharing in this windfall profiteering by demanding record service station interchange fees for motorist fill-ups.

(*Our choice of words)

[Source: with news via AP]

"A Debit-Card Nation" (Newsweek)

July 23, 2006

Jane Bryant Quinn’s (“A Debit Card Nation” July 31, Newsweek business column) appears to have had parental research help from the credit card associations and their advocacy groups. The recommendation calls for consumers to use debit cards. But, what is not explained are the lengths the financial institutions and consumers reach to urge retailers to process the cards instead as traditional credit cards.

Click here to understand why this is such a big, multi-billion dollar issue that rakes in the fees for the card associations’ member banks.

Resource: Feb 3, 2006 posting – “‘Debit-Card Fees Mask Bank-Sponsored Scheme,’ Warns — The Credit Card Interchange Report”

[Source: with reference to Newsweek].

"Retailers Seek Fee Rules for Credit Cards" (The Washington Times)

July 22, 2006