"Australian Central Bank Revises Interchange Fees Downwards" (Finextra.com)

September 30, 2006

MasterCard Rate Increase?! (WayTooHigh.com)

September 28, 2006

Can you imagine?

MasterCard® is actually preparing another assault on merchants and consumers. According to the NACS, they will again raise merchant interchange rates in mid-October.

It seems that little has changed.

Their plan is to increase World card rates on Oct 14th and the increase is widespread. We don’t see any rates declining, but rising. Supermarkets are especially penalized. The new rates are increasing by about 4 percent at a time that our antitrust litigation should be causing pause.

The rate increases will apply to many cards, including: World Elite Standard, World Elite Key-Entered, World Elite Convenience, World Elite Supermarket, World Elite Warehouse, World Elite Public Sector, World Elite Restaurant.

[source: via NACS, WayTooHigh.com]

"Black Friday" (WayTooHigh.com)

September 27, 2006

We are wondering.

What would happen if on the day after Thanksgiving, on what is known as “Black Friday” – the busiest shopping day – when the credit card cartel is again poised to reap billions, if consumers demanded merchants process their debit cards as …. debit cards, rather than credit cards.

In drawing attention to the interchange fees, this campaign would canvas the nation with attention and raise more questions about the unbridled profiteering by Visa® and MasterCard®. Shoppers would signal they support their favorite stores. Rather than paying the banks a percent of every sale, retailers would then turn over a much smaller flat fee. The card association’s are fighting back with contest gimmicks and promotions to force consumers to have stores swipe the cards at the much more costly credit card rates.

During the next few weeks we will explore how to promote and implement this plan.

[Commentary: WayTooHigh.com]

"Payment Systems Evolution: Where To From Here" (RBA.gov)

September 27, 2006

Commentary on Technology, Fighting Mad Merchants and Real Blogs (WayTooHigh.com)

September 24, 2006


A newly invented silicon chip uses lasers, rather than wires to exponentially speed up information at a fraction of the cost. So, why is the credit card cartel initiating promotional gimmicks like caps on fill-up fees when motorists pay over $50 rather than lowering all rates due to advances in technology?

Is it greed, arrogance, or, just because they can?

Moore’s Law of cost savings and technology efficiencies is one more reason why the $30 billion dollar annual interchange windfall forced upon consumers and merchants is infuriating many.


During an address to a Las Vegas photo industry conference this week, I heard from many retailers. Their concerns on interchange were interchangeable; each had stories about the fees and were all fighting mad. In all cases, their issues paralleled other retailers I hear from. They are mad as hell and not going to take it any more. One fellow attendee from Boston even mentioned the 1970s film Network and congratulated my partner and I as the very first lead plaintiffs for not just getting passionate, but taking action. I explained how the April, 2005 Wall Street Journal column (front page Marketplace) was partly the catalyst for leading us to become the personalities behind and foundation for this global battle.

His words and personal experience have become a new center piece in our personal battle with Visa®, MasterCard® and their member banks. No other person has ever expressed their appreciation for our role in filing the very first antitrust suit quit like him. He explained that after the horrors of September 11th, hearing stories about people standing up to injustice meant the world to him. His world profoundly changed on that day; his wife was on American Airlines’ flight 11 and one of those lost on September 11th.


We learned that the new hit NBC program ‘Studio 60’ had some technology marketing that was meant to appear as if fans of the show were hosting genuine blogs. Saturday’s Los Angeles Times reported that the blog backfired because it was actually written by the network and underhandly was actually a “faux-blog.” This is one more way corporate giants are designing unlevel playing fields, although the NBC faux blog was turned off hours ago and perhaps for good..

More about this example of a phony corporate blog from a Defamer.com blog posting:

While we found Defamer doppleganger Defaker, NBC’s attempt to virally promote Studio 60 through a blog that seems to report gossip about the show’s fictional universe in the form of interminably long episode summaries, an uncomfortably accurate commentary on our own half-assed efforts in the medium, we did unexpectedly discover something on the site to occupy our time: the open comments section of their inaugural post, a weird place where messages indulging the blog’s premise (seemingly both from NBC staffers and people willing to play along with the joke), reviews of the show’s pilot episode, opinions on the site’s execution of its viral vision (verdict: try harder if you’re going to bother), and general ragging on Amanda Peet’s acting ability uncomfortably coexist. Here’s a round-up of our favorite examples from the past couple of days:

Real people, real blogs and honest narratives will always beat out giant conglomerates’ attempts to sway opinion. Just look at the credit card cartels efforts and compare it to WayTooHigh.com – The Credit Card Interchange Report. In their cases advocacy groups which enjoyed the financial support of Visa®, for instance, issued press releases and promoted the bank-owned views. Commentaries in newspapers also advocating their point of view must be measured by the people behind the curtain.

[commentary: WayTooHigh.com]

Background News Items on 30 Minute Photos Etc. (Kiosk Market Place)

September 18, 2006

Photo retailers benefit from ‘Starbucks effect’

by James Bickers, editor • 18 Sep 2006 – Kiosk Market Place

When Fred Schwartz returned from a recent 16-day trip to Italy, the retired phone-company worker had a lot of pictures to print. As usual, he took his memory cards to 30 Minute Photos Etc.in his hometown of Irvine, Calif. But this time was different: Rather than hand the cards across the counter, Fred sat down at a photo kiosk and took matters into his own hands. He got hands-on assistance from storeowner Mitch Goldstone, plus some above-and-beyond treatment.

“Halfway through, he brings me cold bottled water and a candy bar,” he said. “I’ve never been exposed to anyone helping out the customer that much, the extra step. I’m just not used to that kind of personalized service.”
30 Minute Photos is indicative of an emerging trend where photo retailers use self-service in tandem with extraordinary customer service to create an atmosphere where people want to linger. Call it the “Starbucks effect.”
“I’m using his services more and more,” Schwartz said. “It’s just so comfortable in his store.”

Catering to ‘Jennifer’

The proliferation of digital cameras has been good news and bad news for photo retailers — more people are taking more pictures, but they’re also printing them at home in large number. The Photo Marketing Association International reports that 61 percent of the digital photos printed in 2004 were done on home printers, versus 31 percent at retail. Retailers did better in 2005, but the majority of prints were still made at home.

“For the specialty photo retailer to survive, they have to clearly identify their target market and design an experience around that market,” said Chad Munce, PMA’s group executive for digital-imaging markets. “If you consider the demographic of the memory-keepers in the household that are buying photographic products and services, you will see that the Generation X mom — PMA calls her ‘Jennifer’ — is the primary target for photo kiosk services.”

Patrons use the DigiPrint Lounge at Dan’s Camera City, Allentown, Pa.At Dan’s Camera City in Allentown, Pa., the experience is clearly aimed at Jennifer. The store’s 450-square-foot “DigiPrint Lounge” features 15 kiosk stations, each featuring a custom-designed stool, purse hooks and a La-Z-Boy chair for friends and family. A children’s entertainment area is nearby, and staffers are on hand with free coffee and other drinks. The lighting in the entire area is reduced, cutting down on glare on the Lucidiom kiosks.

“Customers — especially women — seek out the lounge,” said Michael Woodland, chief executive of Dan’s. “It is relaxed, provides all they support they could wish for in terms of entertaining the kids, having a knowledgeable person at the ready, and easy-to-use systems.”

Mitch Goldstone took a similar approach to 30 Minute Photos in June, when he remodeled the store to give it more of a boutique feel. “We redesigned the entire store — it was getting old-looking,” he said. “There was a lot of clutter, and there wasn’t any of the type of merchandising and marketing that takes place in, say, a Starbucks. We wanted to create a unique destination experience, designed to make people stay and play.”

At 30 Minute Photos in Irvine, Calif., a staffer teaches a customer to use the Lucidiom “Luci” kiosk.For 30 Minute Photos, that experience includes full-spectrum lighting, a high-end air filtration system, and a refrigerator full of Voss water and Ghirardelli chocolate — complimentary for customers.

“You go into the Ritz Carlton, for example, and they’ve always got fruit available at the front desk for their customers,” he said. “That’s got a special magic to it, and we wanted that for our store.”

The magic continues when customers leave, too — Goldstone said he hands out single-serving containers of Haagen-Dazs to departing shoppers. Goldstone said he couldn’t give specific revenue figures, but did say sales had risen 60 percent since June, when the store makeover took place.

“That’s an enormous number, especially when you consider that the traditional photo industry is down about 20 percent,” he said. “We feel it’s extraordinary.”

Paying more for the experience

“Why would anyone pay a dollar for a bookmark?” Steven Spielberg once asked. “Why not use a dollar as a bookmark?”

Spielberg’s frugal viewpoint underscores an aspect of human nature that is pivotal for retailers: the emotion of buying. In any given city, you can find a cup of coffee for a dollar or less. You also can find a $4 cup of coffee in that same town, very likely on the same block.

What justifies the difference? Taste and quality are part of it, but not all. Customers pay more for a positive buying experience, and interestingly, the phenomenon is not diminished with awareness — even if you know you’re paying way too much for coffee, you’ll occasionally do it anyway, because you enjoy it.

Dr. Michael Kasavana, professor of hospitality business at Michigan State University, said this phenomenon is well documented, and can be put to good use by the photo retail industry. “There is much research to indicate that a comfortable environment encourages more effective purchase decisions, and likely more spending,” he said. “Additionally, a personal loyalty tends to be attached to the comfort station and hence a higher propensity for repeat business.”

In the case of Dan’s Camera City, higher quality prints coupled with the “lounge experience” have justified higher prices — which customers are happily paying. “We are 29 cents for a 4-by-6,” Woodland said. “That’s not a lot compared to other specialty stores, but certainly more than the local 19-cent big-box stores or the 9-cent online companies. In our case it is quality and experience. We do produce prints which are noticeably superior to these other sources, so there is a double incentive for them to choose us — allowing us to appeal to both the left and right side of their brain.”

At 30 Minute Photos, prices used to hang on the walls. After the June makeover, they are nowhere to be found on the store signage. “Price isn’t an important component any longer,” Goldstone said. “People are so dazzled with the service and quality that they don’t question the pricing.”

[source: Kiosk Market Place]

"Creative Pricing Drives Brisk Photo Kiosk Sales for a California Store" (Kiosk Market Place).

September 18, 2006