On the eve of Visa Inc’s bank bailout, we have this news: interchange rates are changing, but we have no clue what it will be until after the IPO is completed.
What other business can announce they will adjust their fees, but will not let you know its new rate schedule and how it will impact your wallet until the day it takes effect? No, not the petroleum industry. But, it does take a mirror-like cartel with unbridled market power to decree these types of changes.
Over the past years, MasterCard and Visa have both attempted to retool and convert from their bank-owned control by hiring an independent board of directors and restructuring to help respond to our antitrust assertions.
This, along with other measures were designed to soften the reality that both credit card associations run a monopolistic enterprise, where its card network fixes prices at supracompetitive levels. Even the letter we received from Chase Paymentech married MasterCard and Visa together to virtually make them indistinguishable from each other – they are so similar that the processing company didn’t need to send two separate letters, but, instead batched both announcements together as one.
It seems that all the good changes that Visa and MasterCard enacted to move forward were just window-dressing. The reality is all here in this letter.
On April 1st, the two credit card associations will press a button and unilaterally change several merchant interchange rates. As merchants, we will be kept in the dark until … April Fool’s Day!
We will not even know the new rates until we view our statement a month later, or visit the Visa and MasterCard websites, which require an advanced degree in gobbledygook to decipher.