Trucking Industry Helps Fund Visa and MasterCard’s Rewards Programs

May 15, 2008

Now that an average 18-wheeler gas fill-up costs about $1,200, next time you see a truck take notice that they are helping to fund Visa, MasterCard and its member banks cardholder reward schemes.  As trucking industry drivers use plastic to pay for topping off their tanks, about $25.00 merchant interchange fees are immediately funneled to the card associations and their member banks.  When you review technological advancementsand the laws of efficiency, just how much of that $25.00 help support the electronic payment network?  According to published reports, the cost to process an electronic transaction is about 13 percent – That means that the cost is about $3.25 from the standard 18-wheeler truck fill-up, while $21.75 (87%) helps explain why the merchant interchange fees are broken and unfair.

“House to Hold Hearings on Credit Card Interchange Fees” (via

May 14, 2008

Click here to read the May 14th article by Martin Bosworth.  Reprinted below.

Retailers, bankers gear up for discussion of ‘Fair Fee Act’

By Martin Bosworth, May 14,

The House Judiciary Committee has scheduled hearings on legislation that would rein in credit card interchange fees tomorrow. The hearing will be preceded by a frenzy of lobbying as retailers square off against the financial industry over the hidden fees that retailers pay to process credit card transactions.

The hearing will discuss the “Credit Card Fair Fee Act of 2008,”introduced in March by Judiciary Committee chairman John Conyers (D-MI). The proposed legislation would require lenders and credit card companies to negotiate with retailers on terms for interchange fees, and for the Federal Trade Commission and the Justice Department to step in and arbitrate if an agreement could not be reached.

Currently, interchange fees are set by credit card companies such as Visa and Mastercard, and the payments are often high enough to wipe out a store’s profit on any sold item, forcing them to raise prices for all customers just to recoup their losses. A coalition of retailers banded together to sue both companies and many major banks for what they claim was collusion in setting interchange fee profits

Photo store [and co-]owner Mitch Goldstone, one of the lead advocates of eliminating interchange fees, said that “We are ready to explain why interchange fees are obsolete, illegal and anti-competitive.” In a posting on his blog, WayTooHigh.Com, Goldstone said that “After years of toil, merchants and consumers are at the cusp of forcing the demise of these unbridled and unnecessary interchange fees on American’s and our neighbors around the world.”

Strange bedfellows

Both the retailer litigation and threats of proposed new regulations have conspired to bring together credit unions and national banks–traditionally old foes–to oppose the legislation. The Hill reported that both sides plan to bombard Capitol Hill with advertising urging Congress to oppose legislation restricting interchange fees.

Retailers and interchange fee opponents hope to take advantage of the zeitgeist surrounding credit card, as several members of both the House and Senate have introduced new legislation that would curb the most abusive practices of the industry, and have held multiple hearings decrying the more unscrupulous tactics of the financial industry against its customers.

Even with continuing healthy profits for both credit card companies and highly successful IPOs, both Visa and Mastercard are rumored to fear a “perfect storm” combining the elimination of the interchange fees, lower card usage and higher delinquencies due to the economic climate, and restriction of many of the fees levied on consumers.

Industry analysts have observed that one of the principal motives for both Visa and Mastercard to go public was to build up “war chests” for funds to recover losses if the interchange fee litigation should go against them–and to shift the bulk of the risk to shareholders and investors.

At $50 Billion, Is MasterCard and Visa’s Member Banks’ Cartel Nearing its End?

May 14, 2008
The total annual merchant interchange fees continue to soar and reflect a growing discontinuity with the nation’s recession and realities that technology and efficiencies should be lowering fees. Instead, according to Robin Sidel’s May 14th WSJ article [“Consumers May Pay For Credit-Card Bill“], merchant interchange fees “generated roughly $50 billion last year.”  Robin explained on the phone this afternoon that this rate was based on information from The Nelson Report,
Just how monstrously tainted are these anticompetitive charge-card fees that violate federal antitrust laws?

Look at it this way:  Visa and MasterCard’s member banks’ interchange fees last year were much greater than three-times Microsoft’s entire net income of $14.8 billion dollars last year. The total interchange fees charged to merchants and paid by consumers last year were greater than the combined net earnings of Chevron ($17.5 billion), Hewlett-Packard ($7.2), Intel ($6.2), Walt Disney ($4.6), Apple ($3.4), Lockheed Martin ($3.0) McDonald’s ($2.3), Federal Express ($2.0) and Walgreen ($2.0). [source: Forbes 400].

Want to know more about lead plaintiff  Click here and read their daily blog: Tales from the World of Photo Scanning






“Just like the British in 1773, Visa and MasterCard Won’t Negotiate. Enough is Enough (Via

May 13, 2008


[source: Unfair Credit Card]

“Old Foes Unite to Keep Charging Credit Card Fees to Merchants” (via The Hill)

May 12, 2008 – The Credit Card Interchange Report Comments:

Even financial interpreter Jim Cramer is in for a grueling week as Visa and MasterCard readies for what both companies warn might lead to their “insolvency” [according to their SEC filing statements].For an update on Thursday’s planned Capital Hill combat against the giant credit card associations and its member banks, click here to read Jessica Holzer’s May 12th The Hill column.   

You know there are splinters in Visa and MasterCard’s haywired argument when lobbyists for the banks and the credit unions join forces; while they are gasping, we are ready to further illuminate the issues. It has been more than three-years since launching the class-action complaint to arrest this $40 billion annual hidden tax on merchants and consumers.

Let us not forgot that interchange fees were designed decades ago to cover the cost of a four-party electronic payment network – back when we used manual credit card imprinters and mailed in thick bundles of carbon copy credit card receipts to clear the payments. Back then, it took days to transfer funds, today it is instant and efficient.

Today’s efficiencies have done away with the antiquated payment process, yet the fees are higher than ever. Why the disparity as interchange rates abroad are a fraction of the nearly 2.0% tax charged in the U.S.?



This is the “perfect storm.” 

We are ready to explain why interchange fees are obsolete, illegal and anti-competitive. Even the banking industry’s shareholders are in for another bombshell so audible and eclipsing that the impact from their executive’s round of previously misfortunate decisions and billions in prior writeoffs may be petite in comparison. A trial by jury allows fort trebled damages.
When was the last time you heard the U.S. Federal Reserve explain that interchange fees “dampen innovation” for check writing? Never: there are no interchange fees to clear checks. Likewise, why hasn’t the Fed explained that merchants “derive huge benefits” from accepting paper checks for payment? Again, there are no fees to clear a check and if it is so significant a cost, why hasn’t the banking industry demanded interchange fees for that payment form?
The banking lobbyists are ready and so are we, but our story is being told by regular shop owners to personalize the issue. After years of toil, merchants and consumers are at the cusp of forcing the demise of these unbridled and unnecessary interchange fees on American’s and our neighbors around the world. The American public is fed up with the banking industry’s mismanagement and audacity; the days of cartel-like price-fixing will vanish, just as did those bulky manual credit card imprinters also disappear.
“Visa’s IPOIs Worth a Close Reading” (via WSJ)

Understanding the Word “Insolvency” Is Crystal Clear

Visa Inc. Files 10-K Annual Report, Amends S-1 Registration


Want to know more about lead plaintiff  Click here and read their daily blog: Tales from the World of Photo Scanning





Visa, MasterCard: Credit Card Fair Fee Act of 2008 Hearing

May 11, 2008

The House Antitrust and Competition Policy Task Force holds a hearing on the Credit Card Fair Fee Act of 2008 to ensure competitive market-based rates and terms for merchants’ access to electronic payment systems.  Thursday 05/15/2008 – 11:00 AM; 2141 Rayburn House Office Building, Judiciary Committee Antitrust Task Force.