Did Visa and MasterCard’s Fees Contribute to Forcing Starbucks to Close Hundreds of its Coffee Shops?

Next time you queue up at Starbucks for your daily fix of java, notice how many others in line are having the barrister swipe their debit and credit card to buy a two or three-dollar cup of coffee.

Did you know that the merchant interchange fee to process these electronic payments could cost upwards of 50-cents or more? That means a quarter of the gross revenues are being paid to Visa and MasterCard and its member banks – a 25% surcharge.

How many of those customers have easy access to change or a few bills to cover their coffee? Instead, they are becoming conditioned to charge it to their card. The credit card giants will explain that the convenience of the card leads to added sales, but what about the conditioned regular consumer who just wants their daily fix of coffee and is not intent on buying an espresso machine and other costly add-on merchandise each day?

I wonder if Starbucks has already pointed a finger at the gluttonous credit card associations for participating in what seems to have assisted in their financial woes?

Visa and MasterCard Branded Gift Cards Force Unjust Penalty on Consumers

Recently, I bought a new AT&T cell phone and the plan included a $50 rebate. Rather than providing a check or instant credit to my account, the new undaunted device to pocket even more money at the expense of consumers are electronic payment gift cards.

Here is how the scheme works.

A few weeks after the purchase, you receive an official looking Vias or MasterCard branded debit card. The problem is when you try using it. It is confusing and many retailers have a hard time processing it. The worst part – there are just micro-balances remaining. Retailers are unable to process te transaction, which means that those few remaining dollar balances vent away in the barrenness of never-to-be-claimed currency.

Try for yourself.

I still have a balance on the AT&T “promotional card” but cannot find anyone who can process it. Think of the millions of other micro-balances that remain unused. And, if you are successful in locating a merchant who can accept it, there is the dreaded interchange fee which force’s retailers to pay an excess amount each time the card is used.

Technology = Savings (Except With Credit Cards)

As technology has vastly improved the efficiency and speed of many services, we’ve come to expect cost-savings as a by-product.  If something requires less time and manpower, it makes sense that it should cost the provider less to provide and, in turn, the purchaser less to purchase.

Almost 20 years ago, when digital scanning came into mass use, my company charged $5 to scan a photo.  The machines were new and expensive, the paper and other tools also costly.  Today, the infrastructure is more affordable and the process faster – so we can do more scanning, in less time, at a lower cost.  We charge less than 5 cents to scan a photo – 1 percent of the price in 1990. 

Back then, when you charged something to your credit card, the retailer paid about 2 percent of the transaction total to the credit card company.  That “interchange fee” covered the cost of processing the transaction records we merchants created by running your credit card through the imprinter (remember your messy carbon copies?).  Someone at Visa or MasterCard had to go through all those paper slips and make sure the merchant was paid and the customer was billed.  For many the price seemed fair enough, given the convenience.

Today, we slip your card through a device that records your account number electronically and, at the speed of light, sends the credit card company an electronic notice of the purchase.  Computers figure it all up, put money in our account (also electronically) and bill you.  (If you’re like many people, you pay that bill on-line, another advantage of technology.) 

That streamlining of the process must mean that the interchange fee, like the price of our photo scans, also is a tiny fraction of what it was in 1990, right?  Wrong!  It’s still about 2 percent of the total transaction. Merchants – and in turn customers – still pay the cost of manual processing in a digital world.

Higher processing fees when processing costs are headed the other way isn’t how free markets are supposed to work.  But that’s the way this system works because Visa and MasterCard – which control 80 percent of the credit card market – don’t have to negotiate the fees with merchants. Whatever Big Credit says goes.

Card users haven’t complained much because most never heard of the interchange fee.  It’s not itemized on your monthly statement – but it is embedded in everything you buy.  And we retailers see it every month in our bank records, when Visa or MasterCard keeps that 2 percent. 

Today, one study shows, transaction processing consumes only about one-eighth of the interchange fee.  The credit card companies rightly use some of the rest for high-tech security measures that protect card holders from identity theft and the card issuers themselves from customers who don’t pay. But those costs also are relatively small.

Much of the current interchange fee goes for things customers and merchants probably don’t find essential.  Visa and MasterCard spend lavishly on advertising and junk mail, enticing us to use plastic even more often (and, in turn, hand over more interchange fees!).

To cover the interchange fee, the average American family pays more than $400 annually in additional costs for goods and services.

Regulators in Europe and Australia long ago saw the unfairness of this and demanded that credit card issuers roll back interchange fees.  Today, Congress has a chance to slash the hidden tax on credit cards. 

The Credit Card Fair Fee Act is supported by a number of both Republicans and Democrats on Capitol Hill.  It would end the current practice under Visa and MasterCard, and the banks issuing their cards, dictate the interchange fee to retailers.  From now on, retailers would negotiate fees with the credit card industry (primarily via retailer associations and trade groups). 

The Credit Card Fair Fee Act won’t be enacted, however, unless the millions of Americans who use those cards demand an end to this hidden tax.  The credit card lobby in Washington is strong.  The millions who pay the tax must speak up and demand an end to the outrageously high tax on credit card purchases.

Commentary by Mitch Goldstone, president and CEO ScanMyPhotos.com and editor of WayTooHigh.com – The Credit Card Interchange Report

Now Airlines Are Being Forced to Violate Their Merchant Credit Card Rules

According to The Travel Pirates blogger, Europe’s Ryanair is violating Visa and MasterCard merchant rules by charging extra for in-flight electronic payment transactions.  Click here to read more.  Where are the bank’s advocacy groups on this issue?  I don’t seem to have noticed any news releases on this subject from the American Bankers Association or community bank associations, or even Visa and MasterCard.

According to About.com, “Easyjet adds a single 7.50€ for the transaction, Ryanair adds 2.50€ per journey per passenger. If flying alone, Easyjet’s credit card fee is higher than Ryanair’s. If flying as a group, Ryanair’s fees are higher – a family of six will pay 30€ in credit card fees.”

According to Newsweek, “Ryanair.com charges a €1.20 fee for paying by debit card (online) but more than twice that (4 euro) if you pay with a major credit card. And note, if you get to the airport and are hit with more fees, you’ll be hit with a second processing charge as you pay them. So if you have a Visa debit card, bring that with you to the airport, too! The processing charge will only be €1.50 (versus €4 for a credit card at the airport).”

Non-profits like The Red Cross are even violating merchant credit card rules.  See below repost from an earlier commentary. 

Excerpt from About.com [Credit Card Processing for Nonprofits]:

• Unfortunately for nonprofits, most of their transactions are not done face-to-face and fall into this category called “card not present” or “mail order telephone order (MOTO)” transactions. MOTO processing rates can also vary substantially based on the type of card and your organization’s processing volume – but it will typically be to 1% higher than a physically swiped transaction. (Personally, I can’t imagine someone who has stolen a credit card going online to make a fraudulent donation to their favorite nonprofit, but credit card companies don’t see it that way.)

Read the following FAQ from the American Red Cross Website:

• “Why do you require a donation amount of $5? Like any other online credit card processing system we are charged by credit card companies. We don’t want donors’ well-intended gift to be offset by processing fees.”

Interchange fees are seemingly forcing non-profits to violate their processing agreements. Like our retail and ecommerce business and millions of others, we are all precluded from requiring a minimum charge for an electronic transaction. Yes, in the American Red Cross’ own words, they require a minimum transaction of $5.00. Does this mean that Visa and MasterCard will withdraw electronic payment support and pull the plug on their network because of this violation? We think not, but it is one more lapse and glaring reason why we question interchange fees. Listed among the 270 page MasterCard Merchant Rules Manual, is this warning the merchants cannot require a minimum transaction amount. [from the MasterCard website page 2-22. “9.12.3 Minimum/Maximum Transaction Amount Prohibited. A merchant must not require, or post signs indicating that it requires, a minimum or maximum transaction amount to accept a valid MasterCard card.”]

Let’s not just pick on MasterCard. On the Visa site, they have a link and recommendations of various charities that you can make instant donation to, including the American Red Cross. But, there is no mention of the fast that a percent of each transaction is not going to the designated non-profit, but rather being paid in merchant interchange fees. See link. On page 9 of the 135 page Rules For Visa Merchants document, they too explain that “Imposing minimum or maximum purchase amounts in order to accept a Visa card transaction is a violation of the Visa rules.”

Visa and MasterCard’s Merchant Rules Are Irrelevant

“A New Business Model For Card Payments” (Via Diamond Management & Technology Consultants)

See below abstract from the Diamond Management & Technology Consultants report by Amy Dawson and Carl Hugener:

Credit and debit cards have been a major profit engine for issuing banks, but legal and possible regulatory challenges to the interchange model spell trouble for both issuing banks and the card associations that support them, MasterCard and Visa. The $150 billion card industry must recognize this threat to earnings and position itself for ongoing success.

For a well presented overview of the report, we are reprinting with permission the following blog posting by Sean Harper, co-founder of TransFS and TSS-Radio.

• Where Does Interchange Go?  The biggest component (about 80%) of the credit card processing fees that every merchant must pay is “Interchange”. Interchange is a fee collected by Visa and Mastercard and passed along to the bank which *issued* the credit card that was used for the transaction.
• A 2006 report by Diamond Consultants had some facts and figures that we found quite interesting. The report is worth checking out. It is no longer available on Diamond Consulting’s Website but it is available at the Internet Archive – A New Business Model For Card Payments. Highlights:

* “Credit and debit cards have been a major profit engine for issuing banks, but legal and possible regulatory challenges to the interchange model spell trouble for both issuing banks and the card associations that support them”

* “Card issuing banks and the card networks can’t be blamed for trying to maintain, or at least prolong, the current interchange fee model. It accounts, after all, for over $22 billion in annual fee income for Mastercard and Visa issuers and the associations”

* “Paying for issuer rewards programs consumes about 44% of interchange costs, but merchants get nothing out of these programs; they are competitive tools for issuers. Merchants likewise pay about 3% of their interchange dollars for association branding costs. Meanwhile, processing – the original reason for interchange – comprises only 13% of interchange costs.”

* “Merchants have little idea where their interchange dollars go. In addition to the 44% of interchange cost that goes toward rewards programs, our analysis shows that network branding takes 3% of the cost, and 35% goes to cover things such as cost of funds and profit margins.”

* “Merchants are especially irked because market forces as they understand them should be driving fees lower, not higher, and this is especially true for interchange. Their objections to this situation include: – card acceptance has reached a critical mass that no longer requires the same degree of brand building; – transaction volume has grown enormously and resulting economies of scale have driven down transaction processing costs; – fraud has decreased as a percentage of volume.”

* “Once transparency comes to credit card pricing models – as it ultimately does to virtually every industry and now may be beginning here with the recent decision by Mastercard to publish interchange tables – merchants will use the information to force an unbundling of interchange fee structures. The interchange structure as we know it will dissapear.”

As small business owners who have, in our previous businesses, felt significant pain from the cost of credit card processing, we at TransFS hope the above predictions occur. Our goal is to enhance tranparency in financial services by providing tools to help the consumers of financial products make better decisions and get better deals – for example, our credit card processing calculator and more detailed credit card processing report.

“Cracking Down on Hidden Fees” (via Washington Post)

A bill that would allow merchants to negotiate interchange fees directly with credit card companies cleared a hurdle this week. In a 19 to 16 vote, the House Judiciary Committee approved the Credit Card Fair Fee Act of 2008.

And what exactly are interchange fees? You may not know this but every time you use your credit card to buy something, the merchant has to pay a fee to your card company. That fee is non-negotiable. You, the consumer, end up incurring the cost of that fee because retailers include them in their prices. Supporters of the proposal say it ended up costing Americans $42 billion last year.

Click here to read the article.

[source: The Washington Post]

Merchants Are Already Lowering Their Prices In Anticipation of Interchange Fee Savings

ScanMyPhotos.com and 30 Minute Photos Etc. are not waiting for the closing bell to ring out what is a nearly $50 billion annual hidden tax on Americans.  While Visa and MasterCard and its highly paid advocacy groups suggest that merchants will simply pocket the savings, they are again wrong.

I understand why they are incorrect in suggesting that retailers will simply pocket the savings, after all, they are unfamiliar with how free markets work.  They are the ones that are anti competitive, involved with illegal price fixing and control a nearly 80% market domination on the electronic payment network; much as how the railroads operated in the 1800s, which prompted the Sherman Antitrust Act.

Today’s Credit Card Fair Fee Act is making a difference and my company has been on the front lines in this battle since we filed the first antitrust complaint for illegal price fixing against Visa, MasterCard and major banks in early 2005.

Over the years, we have asked the two giant card associations to rescind their fees on gasoline to help soften the nation’s economic energy crisis, and launched “Green Friday,” asking consumers to use cash on the Friday after Thanksgiving to help demonstrate the impact of this hidden tax.  Asking Visa and MasterCard to post the exact interchange fee for every transaction on every debit and credit card receipt would have helped promote more transparency as well.

Now, we are leading the way by lowering many of our prices in anticipation of a realized savings from potentially lower merchant interchange fees.

Note to Visa and MasterCard: The marketplace decides what people are willing to pay and competition among retailers forces us to be competitive.  Unlike with Visa and MasterCard, it is not like there are just two giant stores that control the entire merchant commerce system in the U.S – there are millions.   If one merchant pockets the savings, that opens the door for their competitor to promote that they instead are returning the savings back to the consumer.

In the case of Visa and MasterCard, they control a giant cartel – not much different from OPEC – and their monopoly disenfranchises most retailers.

An op-ed [“Don’t Pass the Credit Card Fair Fee Act”] in today’s Washington Times by Camden R. Fine, president and CEO of the Independent Community Bankers of America warns against passing the Credit Card Fair Fee Act.  In observing who he works for and represents, it is no surprise.

As a graduate from the University of Southern California I was humored that he commented on what is also our school mascot, the Trojans.   Mr. Fine, however, cautions against the Bill which he described as a Trojan horse.  He even warns that the Credit Card Fair Fee Act could “threaten a key component of our nation’s economy.”  Hardly, but it could threaten the financial institutions that he associates with.  At least he used the word “scheme” in describing the interchange fees.  After the past years of fiscal mismanagement, consumers are weary of trusting banks, but Mr. Fine suggests that the banks have “lots of experience with big retailers trying to limit competition.”  They have experience alright, but for their and Visa and MasterCard’s anti competitive and cartel-like price fixing on merchant interchange fees. 

Mr. Fine doesn’t understand that the reason why many merchants are battling the banks and Visa and MasterCard is because they are impacted by these unfair fees.  Entrepreneurs who own independent service stations are equally impacted and nearly 3,000 service stations have closed in the past year, partly due to these record and unjustified charges.

We currently have price controls that are imposed not on banks, but on merchants and consumers who are forced to pay whatever rates Visa and MasterCard dream up.  Mr. Fine’s argument is no different than the railroad robber barons’ from the 1800s when they forced their anti competitive charges on farmers; there was no competition and there is little competition today as retailers are forced to use the Visa and MasterCard payment network.

Visa and MasterCard Interchange Fee Increases Impact PIN-based Debit Cards

While Visa and MasterCard attempt to limit the outrage over their windfall profiteering at the pumps, the ineffective rate reductions on gasoline electronic payments, were just met with new rate increases for merchants. 

PIN-based debit card fees traditionally were fixed, rather than charging a percent of each transaction, as is the case with signature cards.  However, I was just informed by the electronic payment processing company, Chase Paymentech, which handles transactions for ScanMyPhotos.com and 30 Minute Photos Etc. that our rates have again changed.  Even though our nation is facing a dire recession and many businesses are forced to close, Visa and MasterCard continue with their unbridled greed at the expense of American retailers and consumers.

In response to our email to Chase Paymentech inquiring about a letter we received in May announcing that PIN pricing changes will take effect on June 1st it appeared that PIN debit transactions will no longer be a low, flat fee of 55-cents.  Now it will be a flat fee, plus a transaction fee as well.  Today, we received June 2008 statement and it appears that we are no longer paying just $0.55-cents for processing PIN based debit cards but we are now paying $0.20-cents PLUS a percent of the sale depending upon if it is an Interlink, Maestro, Pulse or Star Southeast.  The percent that is being passed through is GREATER than if we processed the transaction as a “Signature Based” transaction vs. a PIN based transaction.

See the below recent email exchanges from Chase Paymentech Solutions LLP, in their own words:

“…[S]ome of the debit network fees have changed and these changes will be passed onto you.  You have been getting the debit network fees passed onto you (part of interchange pass-thru), so this is not a change.”

“The letter that was sent out is notifying you that some of the debit network fees have changed and these changes will be passed onto you.  You have been getting the debit network fees passed onto you (part of interchange pass-thru), so this is not a change.”

“On top of the Pin-based debit network fees which are passed through, I believe the $0.55 would remain the same.”

“This is part of the pin-debit network fees passed through, as described below.  Pin-based debit is not always the lowest cost option, since it depends on your transactions amount.  If you feel you would like to do signature based transactions, then you can process these transactions either way –pin-based or signature based.”

Merchants and Consumers Welcome Judiciary Committee Passage of Bipartisan Legislation to Crack Down on Hidden and Excessive Credit Card Fees

WASHINGTON, July 17, 2008 /PRNewswire-USNewswire via COMTEX/ — Credit Card Fair Fee Act Would Mean Free Market Transparency, End Card Price Fixing

The retail community welcomed the House Judiciary Committee’s passage of the “Credit Card Fair Fee Act” of 2008 (H.R. 5546) with the support of virtually equal numbers of Republicans and Democrats.

“The days when Visa and MasterCard are able to impose exorbitant fees on consumers are numbered. Now that Congress and the public are learning how credit card fees are driving up the price of gas, food and other necessities, the big credit card companies are in for a very rough ride,” said Richard Oneslager, Chairman, National Association of Convenience Stores (NACS), a member of the Merchants Payments Coalition.

Interchange fees amount to approximately $2 of every $100 spent using credit cards. Credit card interchange fees cost Americans $42 billion last year and inflate the cost of virtually all retail goods, but especially skyrocketing food and gasoline prices. Currently, credit card interchange rates are set in secret, hidden from view, and exclude merchants from the negotiating process.

“From the cost of groceries to the cost of gasoline, working families are feeling the pain in their wallets,” said John Motley, Senior Vice President, Government and Public Affairs, the Food Marketing Institute (FMI), an MPC member. “The abuse of American consumers and businesses by credit card companies and big banks with a hidden fee that drives up the cost of every retail item needs to end.”

The Credit Card Fair Fee Act will allow merchants for the first time to be included in the negotiating process with Visa and MasterCard, separately with their banks, to come up with a voluntary agreement on interchange rates and terms.

“On behalf of our retail members and their customers, NACS applauds Chairman John Conyers and the Republicans and Democrats of the House Judiciary Committee who stood together today to pass H.R. 5546, the Credit Card Fair Fee Act,” said Oneslager. “This strong show of bipartisanship vindicates the efforts of thousands of NACS members that have taken the issue of outrageous credit card fees and practices to Congress. We look forward to similar bi-partisan support by the full House and Senate.”

The Merchants Payments Coalition (MPC), UnfairCreditCardFees.com, is a group of retailers, supermarkets, drug stores, convenience stores, fuel stations, on-line merchants and other businesses who are fighting against unfair credit card fees and fighting for a more competitive and transparent card system that works better for consumers and merchants alike. The coalition’s member associations collectively represent about 2.7 million stores with approximately 50 million employees. For further information, please visit www.unfaircreditcardfees.com.

SOURCE Merchants Payments Coalition

“House panel favors retailers in vote to cut credit card fees” (via The Hill)

The House Judiciary Committee on Wednesday voted to give retailers a rare break from antitrust laws, approving legislation to allow them to band together when bargaining over the credit card fees they pay to banks.

The 19-16 bipartisan vote handed a victory to a coalition of supermarkets, convenience stores and big box retailers that has argued that so-called interchange fees are too high.

“We are very happy with the bipartisan vote and support that we got in the Judiciary Committee today,” said Chris Tampio, the senior director for government relations at the National Association of Convenience Stores , a coalition member.

The Electronic Payments Coalition , which represents banks and credit unions that collect the interchange fees, decried the legislation as “a sweetheart deal for giant retailers.”

Click here to read more

[Source: The Hill]

Three in Four Americans Support Credit Card Fair Fee Act

via MPC news release

National Poll Finds Voters Want To Rein In Hidden Credit Card Fees That Inflate Prices; Legislation Would End Credit Card Secret Price Fixing

Washington, D.C. – July 11, 2008 – Better than three in four (77%) voters favor the “Credit Card Fair Fee Act,” bi-partisan legislation that would empower retailers to negotiate credit card fees directly with the credit card industry as a means to cut interchange fees, according to a poll released by the Merchants Payments Coalition (MPC).

According to the survey, public sentiment that something needs to be done about the credit card industry is at an all-time high. Concerns about credit card industry fees, policies, and practices touch hot buttons across party lines: identical 51% majorities of Republicans and Democrats alike say they “strongly” support passage of the Credit Card Fair Fee Act.

Consumers are three times as likely to say credit card companies don’t do business the right way compared to cable companies and six times as likely to say that when compared to phone companies. In particular, nearly two in three (65%) say credit card companies don’t share their business values.

Credit card fees known as interchange have skyrocketed on food and gasoline in recent years; they cost Americans $42 billion last year. Revenue that goes to the credit card industry on motor fuels alone has risen steeply in the last year alone, closely following the accelerating price of gasoline.

Interchange fees amount to approximately $2 of every $100 spent using credit cards. These fees inflate the cost of nearly everything consumers buy at retail whether or not they use plastic, cash, check, or food stamps. In 2008, the average American family will pay upwards of $427 in hidden credit card interchange fees.

Currently, credit card interchange rates are set in secret, hidden from view and exclude merchants from the negotiating process. Raising interchange fees is how Visa and MasterCard encourage banks to issue more credit and debit cards – as long as rising rates are kept top secret, consumers have no way of knowing the extra costs they are paying through higher prices. The Credit Card Fair Fee Act would introduce market transparency and open negotiations into the process.

About the survey

Penn, Schoen, and Berland LLC conducted telephone interviews with 605 likely voters nationally June 19, 2008 on behalf of UnfairCreditCardFees.com. The margin of error for national voters is +/- 3.98 at the 95% confidence level and larger for subgroups

Click here for the full results of the poll.

About UnfairCreditCardFees.com/Merchants Payments Coalition

The Merchants Payments Coalition (MPC), UnfairCreditCardFees.com, is a group of retailers, supermarkets, drug stores, convenience stores, fuel stations, on-line merchants and other businesses who are fighting against unfair credit card fees and fighting for a more competitive and transparent card system that works better for consumers and merchants alike. The coalition’s member associations collectively represent about 2.7 million stores with approximately 50 million employees. For further information, please visit http://www.unfaircreditcardfees.com.

House Committee Passes Interchange Bill, Doesn’t include Panel of Judges

You know a Bill is pro-consumer when the banking industry association, Visa Inc. disapproves of it.  Click here for more info on today’s ruling.

“Merchants, Unions Press Congress on Credit Card Abuses” (via Consumer Affiars.com”

Several merchants teamed up with a prominent labor union to send letters to every member of the House of Representatives today, demanding action on bills that would restrict credit card companies’ more abusive practices. The coalition wants Congress to stop what it called “the abuse of American consumers and businesses by credit card companies and big banks.”

Click here to read more.

[source: ConsumerAffairs.cvom}

“Gas stations say credit card fees are pinching meager profits” (via DallasNews.com)

The struggle with high oil prices has a new villain: credit card companies.  While many drivers have grown attached to the convenience of paying with plastic at the pump, fuel stations are increasingly rebelling against the fees they’re charged to process those transactions. Some stations are escaping them completely by offering discounts to customers who pay with cash.  “We make a little bit of money on gas, but it’s not the big source of income in our stores anymore,” said Dan Boschert, who pays about $6,000 in so-called interchange fees per month at his two Dallas Chevron stations.

Click here to read more.

[source: DallasNews.com]

Tulips, Silver, Housing Market and Oil Speculators Have Nothing on MasterCard and Visa

Gas prices might plunge to $50.00 a barrel, yet MasterCard and Visa’s nearly $50 billion hidden tax on merchants and consumers is nowhere near cracking, without intervention. 

 

If even the oil industry might face swift downward pricing pressures, why not interchange fees too?  And if it does, what happens to MasterCard and Visa’s recent plan to limit certain fees at the pump.  Will that experiment lead to an all out reevaluation and a lowering of all interchange fees to become cost-based, rather than unbridled-greed-based?

 

Some history:  In the 1600’s, speculators in the Netherlands bid up the price of tulip bulbs to a level that makes today’s housing market seizure pint-sized in comparison. Just before the crash, the enormous prices demanded for a single flower was stratospheric. It was the classic market crest before the crash.

 

The 1980s saw similar speculation in the silver commodities marketplace. The Hunt brothers tried to make a quick profit by cornering the silver market. Then it was the housing market bust in the past few years.  People were buying homes worth a fraction of its value with no money down.
  

Now, it seems more likely in my opinion, that the oil market will crash too. The following letter (see below) from the top executives at the major airlines are describing something very worrisome. Speculators are buying up oil contracts at record rates. This might lead to oil prices plunging, and soon. Imaging $50 oil sooner than $200 a barrel oil.

 

So, what does this have to do with Visa and MasterCard?  Everything.

 

Unlike, tulip bulbs, oil, silver, the housing market and other sectors that experience pricing cycles and crashes, the credit card associations are not influenced by the marketplace.  There is no supply and demand; they set the fees illegally and in violation of the Sherman Antitrust Act.  Visa, MasterCard and its member banks operate an anti-business monopoly that are void of price swings because they control the market with its vast 80% market share.  Visa and MasterCard publicly recognized that both trade associations might become “insolvent” if our litigation is successful – worth about as much as a Dutch tulip bulb in today’s marketplace. 

 

 

 

AN OPEN LETTER FROM 12 AIRLINE EXECUTIVES (July 9)

 

REPRINT: “An Open Letter To All Airline Customers”

 

Twenty years ago, 21 percent of oil contracts were purchased by speculators who trade oil on paper with no intention of ever taking delivery. Today, oil speculators purchase 66 percent of all oil futures contracts, and that reflects just the transactions that are known. Speculators buy up large amounts of oil and then sell it to each other again and again. A barrel of oil may trade 20-plus times before it is delivered and used; the price goes up with each trade and consumers pick up the final tab. Some market experts estimate that current prices reflect as much as $30 to $60 per barrel in unnecessary speculative costs.

Over seventy years ago, Congress established regulations to control excessive, largely unchecked market speculation and manipulation. However, over the past two decades, these regulatory limits have been weakened or removed. We believe that restoring and enforcing these limits, along with several other modest measures, will provide more disclosure, transparency and sound market oversight. Together, these reforms will help cool the over-heated oil market and permit the economy to prosper.

The nation needs to pull together to reform the oil markets and solve this growing problem.

We need your help. Get more information and contact Congress by visiting www.StopOilSpeculationNow.com.

MasterCard Worldwide and Visa Inc. vs. Ticketmaster

On Monday evening, I attended the Los Angeles Staples Center performance of the American Idol summer concert series.  When ordering the tickets online, I was drawn to the extensive and costly list of extra fees and charges imposed by Ticketmaster.

There was a $2.50 “delivery charge” for enabling me to download the ticket, printed on my paper and using my ink and printer. Not even a started theater ticket was necessary.

There was also a $5.10 “order processing fee, “which I was unsure what that was. Was this to cover the credit card merchant interchange fee? If so, Ticketmaster might be in violation of its electronic payment agreement, because they are precluded from charging an added fee to cover the Visa and MasterCard payments.

Then, there was a $12.95 “convenience charge.”

In total, there were $20.55 in added fees piled onto the $68.50 original ticket price, a 30% added fee.

Unlike Visa and Mastercard’s nearly 100 separate interchange fee schedules, Ticketmaster has another difference.  Consumers are not forced to buy tickets from the leading online ticketing service.  I could have chosen not to use Ticketmaster, but as an Ecommerce business owner and retailer, like millions of others, we are all forced to accept Visa and MasterCard and its 80% market power and monopoly for we will be out of business.

Even Death is Less than MasterCard and Visa Pricing Scheme

As 30 Minute Photos Etc. and ScanMyPhotos.com prepares for a major reinvention of our retail photo center (announcement on July 19th), we are explaining the changeover to our customers.

One lawyer in estate planning understood how technology and efficiencies have forever changed the business of photography and just explained that even estate planning is more efficient today.  They explained that their costs are about a third what it was just decades ago, due to word processing and other efficiencies.  Which led me to recognize one more example of why MasterCard and Visa’s pricing monopoly is a cartel that is disconnected from today’s realities.  Even estate planning costs are a third of what it once was, for ScanMyPhotos.com, it is a tiny fraction, yet for electronic payment processing, the rates are at record levels.  The business of death is even more efficient and cost effective than those credit card interchange fees.

“Gas stations offer discounts for cash instead of credit cards” (via USA Today)

Gas station owners pay processing fees for both debit card and credit card purchases. But fees for debit card transactions — especially when consumers enter a PIN for the purchase — are usually significantly lower than credit card transactions.  In Irvine, Calif., roughly 100 gas station owners and retailers rallied last week, holding signs with such messages as: “Wake Up Congress. Stop Hidden Credit Card Fees on Gas.”   “In many cases, credit card fees are one of the largest expenses businesses have,” says Mitch Goldstone, a retailer who organized the rally.

Click here to read more.

[source: USA Today, Kathy Chu reporting]

“Consumers hit by credit card fees” (Via The Austrialian Business)

“AUSTRALIAN credit card fees have surged by 170 per cent in the past five years while other household banking charges have jumped by almost 50 per cent, a new report says” Click here to read more.

[Source: The Austrialian Business]

How Visa and MasterCard Discriminate Against Millions of Merchants

As MasterCard provides an interchange fee limit of $50.00 for service station gasoline fill ups, the question is whether this is just for debit cards, or also for credit card transactions? Then, with many card limits of about $75.00, are motorist forced to resubmit their card to top off their tank and thus ring up even greater interchange fees? As for Visa, will they also be imposing an interchange fee limit on credit cards too?

While pleased to see that Visa and MasterCard are reacting to merchant revolts against the two giant card associations, it was especially consoling to notice that the Visa debit card limit was announced just hours after our planned rally against them. Nice timing, Visa!

The problem is that restructuring only a few interchange fees provokes even more questions. There are millions of retailers coerced to pay these supra competitive fees, yet the only relief now are for service stations, and for only gasoline purchases. What about our ScanMyPhotos.com and the millions of other retailers? We all want relief and if Visa and MasterCard can limit fees at the pumps, why not everywhere? The answer to this rhetorical question is that they are giant cartels that have a monology and can do whatever they want…. until now.

The interchange fee limits at the pumps do not address the issues of other skyrocketing inflationary costs on other products and services.

 

Merchants Rally Against Visa and MasterCard Fees

See below for a sample of signs that consumers, retailers and service station operators displayed during The Great American Rally Against Visa and MasterCard’s Fees on Gasoline.

For an update on how Visa and MasterCard are forcing service station operators to lose their life investment and close their doors, click here to read the Wall Street Journal, July 7th article, “Gas Stations Hit Skids: Higher Costs Close Nearly 3,000 in a Year” (subscription required). 

Excerpt: “Aziz Hassan, who owns five stations in Sherman, knows all about the profit squeeze. A truckload of gasoline costs $35,000, compared with $10,000 just a few years ago, he said. Most of his profits are going to credit-card fees, he said, which eat up about nine cents of every gallon of gasoline his customers buy with a credit card. This leaves him little to cover costs such as electricity to run the pumps.”

SAMPLE PLACARDS DISPLAYED DURING THE GREAT AMERICAN RALLY AGAINST VISA AND MASTERCARD’s FEES ON GASOLINE

 

 

TV News Coverage from Recent Credit Card Gas Rally

Click here to view the KNBC-TV July 3rd news segment on The Great American Rally Against Credit Card Fees on Gasoline.

“Credit card fees cutting into profits” (via Herald-Citizen)

Excerpt: Credit card transaction fees affect all retailers but have hit gas stations particularly hard because of low margins and the high costs of running the business.

For example, if you purchase 25 gallons of gasoline at a cost of $4 a gallon with a credit card — and if a retailer’s profit margin is 10 cents a gallon (Mid-Tenn currently has a 7-cent margin per gallon, Ramsaur said) — a total of $2.50 is made from the $100 spent. But with credit card interchange fees ranging anywhere from 2-3.9 percent — the retailer often ends up owing money and selling gas at a loss.  Read more.

[Source: Herald-Citizen]

“Rally protests gas prices, credit card fees” (via OC Metro)

Via OC Metro Magazine

Irvine business owner organizes rally to call attention to the fees credit card companies are raking in with rising gas prices.

By Olga BelogolovaPublished: July 03, 2008 04:10 PM

More than 30 people gathered at the corner of Jamboree and Barranca Avenues this morning to protest high gas prices and high credit card fees. The protest, organized by small-business owner Mitch Goldstone, took place during the morning commute.

On the cusp of Independence Day weekend, protesters gathered wearing American flags and patriotic gear.

One of them, Mary Lou Barry of Tustin, dressed in a full American-flag jacket and glistening blue hat, spoke about the gas problem. “People are just accepting it,” she says. “We have to talk about it and maybe get some attention.”

The high gas prices are not only affecting drivers, explained Mitch Goldstone, but independent business owners as well, whom, he says, “are going out of business because of Visa and MasterCard.”

Navdeep Bassi, a 7-Eleven franchise owner, is feeling the weight of these fees. “Credit card fees are killing us,” he says. “We make no profit.”

Also personally affected by the gas prices, Lauren Young came to the protest with her daughter Samaia.

Having no car, Young explains: “It’s hard to get rides because a lot of people don’t want to do it. It makes a lot harder,” Young says, “doctors appointments and everything.”

Overall, organizer Mitch Goldstone was very pleased with the turnout. “Everyone is so passionate about record gas prices,” he explained, “especially right before our holiday weekend.”

Goldstone is the president of ScanMyPhotos.com and 30 Minute Photos, Etc., which are located near the protest location as well as a nearby Chevron station.

For more information about gas prices, credit card fees and Goldstone’s efforts, go to WayTooHigh.com

[source: OC Metro Magazine]

Goldstone on KFI-AM Talk Radio

On the 4 o’clock hour on the peak pre-holiday afternoon commute, Mitch Goldstone, editor of WayTooHigh.com – The Credit Card Interchange Report was interviewed on KFI-AM Talk Radio.  According to KFI, this is one of the most popular radio stations in Los Angeles and one of the most listened-to news/talk radio stations in the country. The 50,000-watt KFI is currently owned by Clear Channel and broadcasts from Burbank.

Click here to listen (segment starts about 4-minutes into program).

“Dozens protest gas credit card costs” (via OC Register)

Via The Orange County Register

July 3rd, 2008, 1:07 pm · posted by John Gittelsohn

About three dozen demonstrators waved signs asking motorists to honk in support of what they billed as “The Great American Protest Against MasterCard and Visa Fees on Gasoline.”

The protesters complained about how credit card companies charge retailers high fees for each purchase, adding 8-10 cents to the cost of a gallon of gas — a cost that is often passed on to consumers.

“By the time we’re done paying credit card fees, there is no profit left and it’s not fair,” said Navdeep Bassi, whose family owns 15 7-Eleven stores — four that sell gas — in Orange County. “We don’t want to have to charge customers for using credit cards. But now we’re at the mercy of the credit card companies.”

Credit card companies contend they are reducing their fees in response to complaints, but they deny they are charging too much or colluding against retailers.

The protest was organized by Mitch Goldstone, owner of an Irvine photo shop and lead plaintiff in a class action law suit accusing credit card companies of violating antitrust laws by charging fees of 1.5 to 2 percent per purchase.

Register photographer Kevin Sullivan, who shot pictures of the protest, said Goldstone provided boxes of free donuts to keep the demonstrators fueled up.

“Gas station owners challenge credit card fees” (via Taking Charge Blog – CreditCards.com )

This morning, Irvine, Calif., consumers and gas station owners participated in a rally to support the Credit Card Fair Free Act. Rally coordinator Mitch Goldstone told me he was “very encouraged” by the turnout. “I planned it to occur as the nation prepares for the July 4th Independence Day holiday to draw attention to MasterCard and Visa’s most unpatriotic and un-American windfall profiteering by them and its member banks,” Goldstone says.  

“U.S. interchange rates are the highest in the industrialized world. On the eve of the most patriotic day of the year, we really need to ask why we are paying more than Australia (0.5 percent) and in the U.K. (0.7 percent), or nearly anywhere else,” he says. Goldstone is editor of the blog WayTooHigh.com and president and CEO of ScanMyPhotos.com and 30 Minute Photos Etc.

“The rally was a turning point in my legal battle against Visa and MasterCard because it just became very public; until now, consumers didn’t seem to understand that MasterCard and Visa take in for its member banks nearly $1 billion every week in this hidden tax,” Goldstone says. 

Click here to read more

Review: Great American Rally to Stop Skyrocketing Visa and MasterCard Fees on Gasoline

Thanks to everyone who participated in this major rally that is garnering national attention.It was encouraging that the event sparked such interest from the media and consumers. Carl and I have been battling Visa and MasterCard and its member banks since 2005, and today, the story is really gaining momentum as we represent nearly every merchant in the nation.

The inflated price for gas at the pumps caused by Visa and MasterCard’s fees is staggering. They denounce the merchants (their customers), their member banks and even criticize the payment processors, almost everyone but themselves. Then again, they are a close family. Chase Paymentech, which is the company we use to clear our electronic payments is owned by JP Morgan Chase – one of the named defendants in our litigation. Small world.

Today’s event was specifically planned as our nation prepares for the July 4thIndependence Day holiday

I want to draw attention to MasterCard Worldwide and Visa Inc’s most unpatriotic and un-American windfall profiteering by them and its member banks. U.S. interchange rates are the highest in the industrialized world. On the eve of the most patriotic day of the year, we really need to ask why we are paying more than Australia (.5%), the U.K. (.7%), or nearly anywhere else.I viewed the rally as a turning point in the legal battle against Visa and MasterCard because it just became very public; until now consumers did not seem to understand that MasterCard and Visa take in for its member banks nearly $1 billion dollar every week in this hidden tax.

One of the service station operators attending the rally explained that they net about $60 a day from all the pump fill-ups. Just $60, so you can see how impactful the interchange fees is, especially as gas prices have risen 100% in the past year; so too have many of the Visa and MasterCard credit card interchange fees.

NBC New profiled us today and during the segment, motorists commented that they would start using cash, but most seemed to redirect their frustrations towards Visa and MasterCard. None even knew of the Visa and MasterCard interchange fees – a nearly $50 billion hidden tax on all of us.Photos from the rally

Click here to view rally photos

 

 

WayTooHigh.com Great American Rally to Stop Skyrocketing Credit Card Fees on Gasoline

 

“Gas protest to blame role of credit cards” (via OC Register)

Visa and MasterCard fees drive up the price by up to a dime a gallon, a man leading an Irvine rally says.

By JOHN GITTELSOHN THE ORANGE COUNTY REGISTER

    It’s hard to argue that soaring crude oil costs are driving up the price of a gallon of gas.

    But Mitch Goldstone, an Irvine businessman, says credit card companies are making visits to the pump even more painful, adding 8 to 10 pennies to the price of each gallon of gas.

    “A bunch of people are angry at gas prices, but consumers don’t know that credit card fees exist,” Goldstone said.

    Goldstone plans what he calls “The Great American Protest Against Master-Card and Visa Fees on Gasoline.”

    He hopes to be joined by hundreds of demonstrators, including some gas station owners, at the protest at 7:30 a.m. today at the Chevron station at Jamboree Road and Barranca Parkway in Irvine.

    Visa Inc. announced June 26 that it was taking steps to address these types of complaints by capping debit card transactions at the pump at 95 cents per purchase, effective July 18. The San Francisco-based company also said it will reduce the fees it charges fuel stations for transactions on its credit cards, called the interchange rate.

    “Even though Visa’s interchange rates on fuel transactions are already among the lowest in our system, the run-up in fuel prices to today’s unprecedented levels requires an exceptional response,” said Bill Sheedy, global head of corporate strategy and business development for Visa.

    In response to questions from The Orange County Register on Wednesday, Visa said it was not ultimately responsible for the cost of its services impacting prices at the pump.

    “It’s important to note that retailers, such as gas stations, pay what is called a merchant discount, which is their cost of accepting card payments from their customers,” a company statement said. “They pay this amount to their own financial institution, known as a merchant bank or merchant acquirer. Large oil companies often negotiate their merchant discount rate with their financial institution directly and then impose those rates on their franchised stations. In many cases, rates given to stations are marked up by the oil companies. These rates are never set by Visa.”

    It’s no secret that some of the cheapest gas in California is sold by Arco. Two reasons: Arco stations do not accept credit cards, and they often charge customers an extra fee for using a debit card to fill up. What’s less well-known is the amount credit card companies charge to retailers –not just gas station owners, but any company that uses a credit card for a transaction

    “Now, a lot more people are being forced to use credit cards because they don’t carry $100 in cash to fill up,” Goldstone said.

    Essentially, Goldstone says there’s a compound interest problem.

    Credit card companies make retailers pay an interchange fee each time a customer buys something with their cards. The fee is based on the size of the purchase. So as a gallon of gasoline soared an average $1.50 – almost 50 percent – in the past 12 months, the credit card companies have increased their fee collections almost 50 percent without lifting a finger.

    In fact, Goldstone says, credit card companies are doing less work for each transaction because the technology has improved so much.

    “It used to be that we’d make carbon copies of receipts and mail them to Florida,” he said.

    Goldstone, owner of an Irvine photo shop, is lead plaintiff in a class action lawsuit filed by thousands of merchants alleging that Visa, MasterCard, several banks and credit card companies violate anti-trust laws.

    The plaintiffs’ attorney, Craig Wildfang of Minneapolis, said the soonest the case could come to trial is late 2009.

Fact Sheet: Do You Know How Interchange Fees Harm Service Stations and all Merchants?

Visa and MasterCard credit card fees inflate the price of gas by charging consumers and merchants hidden credit card fees that total 8-10 cents a gallon that inflate already skyrocketing gasoline prices. Credit card fees now tally up to $2.00 or more per fill up for many drivers.

 

Service stations owners and consumers are paying record credit card fees

as Visa, MasterCard, and their member banks reap the windfall from the 100% increase in the price of gasoline since 2007.About two dollars of every $100 the consumer spends in stores or buying gasoline goes directly to the credit card industry in the form of the interchange fee, the biggest credit card fee you’’ve never heard of. Americans pay three times as much in interchange fees as Europeans.

Interchange started as a fee to pay for credit card processing more than 50 years ago when everything was done by hand. Now computers do all the work, but the fees have skyrocketed in recent years.

American businesses and consumers paid $42 billion in interchange fees in 2007 alone.

The price of gas is the BIGGEST issue in the country, bigger than the ““economy”” according to one survey (Yahoo). Two-thirds consider gas prices an extremely important issue, edging the economy and outpacing health care and Iraq as the country’s most distressing problem. In November, when gas cost about $1 a gallon less than today, just under half rated it extremely 

important.

 

With $4-plus gasoline, the credit card industry typically takes in 8-10 cents per gallon in interchange fees, far more than the service station owner if he or she is making any money at all. (Many service station owners are currently losing money on every gallon they sell.)

 

Except for OPEC, nobody makes more money from skyrocketing gasoline prices than Visa & MC.

  Interchange fees are set in secret by the credit card industry. The Credit Card Fair Fee Act (HR 5546,S 3086) is a solution that would create a competitive market outcome and bring transparency to the broken credit card market by allowing merchants a seat at the negotiating table.

Visa’s announcement on June 26th that it will restructure some interchange fees on gas purchases is their first public acknowledgment that the 100% increase in gasoline prices combined with the 100% windfall they have enjoyed from higher credit card revenues in the last year is a major problem for American consumers. However, Visa’s latest actions will make things worse for most people by raising –– not lowering –– credit card interchange fees on the average gasoline transaction. It will mean higher credit card fees for the average gas station. And Visa’s actions do not address the issue of skyrocketing food costs as well as gasoline.

Interchange fees hit consumers coming and going. For example, when truckers fill their tanks to get the goods we buy to market, the interchange fees charged can be as much as $20-25 for a single fill-up. Trucking costs, in turn, increase the costs of all the goods those trucks deliver. So, not only do the credit card companies increase costs on a gallon of milk when a consumer buys it with a credit card at the grocery store, credit card interchange also pumps up the price of that gallon of milk through the trucker’s fuel costs. This ripple effect hurts consumers and businesses in ways they do not realize — and never see coming.

It’’s time to……
-Wake up Congress to stop hidden credit card

   fees on gas

-Put the brake on hidden credit card fees on gas

-Fight the fees that fuel rising gasoline prices

-Take action that stops gas stations from closing

   because of unfair credit card fees

 

“Gas stations charge extra for credit” (Via Florida Today)

Facing fees from Visa and others that erode already small profits on gas sales, some stations have started charging customers extra for using credit cards.  Station operators say credit card companies charge them fees — often 2 percent to 4 percent of a sale — when customers buy gas with credit cards. Those “interchange” fees either cut into their few-cents-per gallon profit or force them to raise their prices, potentially costing themselves customers.  So they are trying to give consumers an incentive to pay with cash.   A few stations around the nation have even stopped accepting credit cards for gas purchases.  Click here to read more.

[Source: Florida Today].

“Credit card costs are driving up the price of gas” (via OC Register)

Reprinted from The Orange County Register “Gas Pains” blog, July 2, 2008 [posted by John Gittelsohn].

It’s hard to argue that soaring crude oil costs are driving up the price of a gallon of gas.

But Mitch Goldstone, an Irvine businessman, says credit card companies are making visits to the pump even more painful — adding 8 to 10 pennies to the price of each gallon of gas.

“A bunch of people are angry at gas prices, but consumers don’t know that credit card fees exist,” Goldstone said.

Goldstone plans what he calls “The Great American Protest Against MasterCard and Visa Fees on Gasoline.” He expects to be joined by hundreds of demonstrators, including some gas station owners at the protest Thursday at 7:30 a.m. at the Chevron gas station at the corner of Jamboree Road and Barranca Parkway in Irvine.

Visa Inc. announced June 26 that it was taking steps to address these types of complaints by capping debit card transactions at the pump at 95 cents per purchase — effective July 18. The San Francisco-based company also said it will reduce the fees it charges fuel stations for transactions on its credit cards, called the “interchange rate.”

“Even though Visa’s interchange rates on fuel transactions are already among the lowest in our system, the run-up in fuel prices to today’s unprecedented levels requires an exceptional response,” said Bill Sheedy, global head of corporate strategy and business development for Visa Inc.

In response to questions from the Register on Wednesday, Visa asserted that it was not ultimately responsible for the cost of its services impacting prices at the pump:

“It’s important to note that retailers, such as gas stations, pay what is called a Merchant Discount, which is their cost of accepting card payments from their customers.  They pay this amount to their own financial institution, known as a merchant bank or merchant acquirer.  Large oil companies often negotiate their merchant discount rate with their financial institution directly and then impose those rates on their franchised stations.  In many cases, rates given to stations are marked up by the oil companies.  These rates are never set by Visa.” 

It’s no secret that some of the cheapest gas in California is sold by ARCO. One reason: ARCO stations do not accept credit cards — and they often charge customers an extra fee for using a debit card to fill up.What’s less well know is how much credit card companies charge to retailers — not just gas station owners, but any company that uses a credit card for a transaction

“Now, a lot more people are being forced to use credit cards because they don’t carry $100 in cash to fill up,” he said.

Essentially, Goldstone says there’s a compound interest problem here.

Credit card companies make retailers pay an interchange fee each time a customer buys something with their card. The fee is based on the size of the purchase. So as a gallon of gasoline soared an average $1.50 — almost 50 percent — in the past 12 months, the credit card companies have increased their fee collections almost 50 percent, without lifting a finger.

In fact, Goldstone argues, credit card companies are doing less work for each transaction, because the technology has improved so much.

“It used to be that we’d make carbon copies of receipts and mail them to Florida,” he said.

Here’s what Visa said in its June 26 announcement:

As an example, under the new rates, if a motorist uses a Visa Signature credit card to fill a 15-gallon tank at $4 a gallon – or $60 total – the acquiring institution generally would pay $0.94 in interchange fees, a savings of 14 percent over current rates. Using a debit card, that same transaction could be cleared within hours, quickly removing the $60 hold that is often placed on a consumer’s funds for one or two days in the current system. For higher transaction amounts, these interchange adjustments have an even greater impact. For a $120 consumer transaction, the level of interchange for the same Visa Signature transaction would be $1.63, for a 43 percent savings. With the cap on Visa Check Card interchange, an acquirer would see a reduction of 59 percent on fuel transactions.

Goldstone, owner of an Irvine photo shop [30 Minute Photos Etc. and ScanMyPhotos.com], is lead plaintiff in a class action lawsuit filed by thousands of merchants alleging that Visa, MasterCard, several banks and credit card companies are violating anti-trust laws. The plaintiffs’ attorney, Craig Wildfang of Minneapolis, said the soonest the case could come to trial is late 2009.

To see a copy of the complaint, filed in U.S. District Court in New York, CLICK HERE.

To see more about how Visa Inc. is offering to help gas consumers, CLICK HERE.

“Gasoline surcharge protest planned for Thursday in Irvine” (Via OC Register)

Reposted from Irvine Retail Blog, OC Register, By Don Dennis

Irvine business owner Mitch Goldstone is mustering the home guard not only against Big Oil; he’s got Visa and MasterCard in his sights, too, over the cost of fuel. Goldstone has put out a call to all motorists who are “steaming mad” about prices at the pumps to join his All American Rally. The rally is scheduled for Thursday, the day before Independence Day, from 8 to 10 a.m. next to the Chevron station at the corner of Barranca Parkway and Jamboree Road.

“Visa, MasterCard and thousands of its member banks are making windfall profits every time you fill up and pay with a charge card,” says Goldstone. Goldstone says he and his partner, Carl Berman, are the lead plaintiffs in a multi-billion-dollar litigation against the two credit card associations and member banks over “anticompetitive price-fixing practices.”

“Except for OPEC, has anyone enjoyed a greater windfall from $4-plus gasoline than the credit card industry?” asks Mark. To learn more about Thursday’s rally, call Goldstone at his business, ScanMyPhotos.com, 949-474-7654.

“Gasoline Marketers Underwhelmed by New Visa Interchange Rates” (Via Digital Transactions)

…[F]uel sellers are underwhelmed by the moves. “It looks like it’s more smoke and mirrors,” says a spokesman for the National Association of Convenience Stores, a vocal critic of interchange that represents 2,200 retailers. “There are so many qualifiers. There are some transactions where it makes things worse by swapping a lower percentage for a higher fixed fee.”

Click here to read more.

Rally to Stop Skyrocketing MasterCard and Visa Fees on Gasoline

Click here for Media Advisory

NEWS RELEASE

Consumers and Merchants Tell Congress to Support the Credit Card Fair Fee Act

IRVINE, Calif.–(BUSINESS WIRE) Consumers and merchants alike will rally in Irvine on July 3^rd, Thursday morning at 7:30 – 9:00 am at the Chevron station at Jamboree and Barranca Parkway to call for independence from Visa and MasterCard’s hidden credit card fees that add another 8-10 cents a gallon on top of already skyrocketing gasoline prices.

Consumers and merchants will also be rallying in favor of the Credit Card Fair Fee Act which would end price-fixing by the credit card industry and help cut interchange fees. This bill would allow retailers to have a seat at the table to negotiate with the credit card industry for the terms and rates of the fees.

“Service station owners and consumers are paying record credit card fees as Visa, MasterCard, and their member banks reap the windfall from the 100% increase in the price of gasoline since 2007,” said Mitch Goldstone, event organizer and editor of WayTooHigh.com – The Credit Card Interchange Report. Goldstone is also president and CEO of 30 Minute Photos Etc. and ScanMyPhotos.com.

With $4-plus gasoline, gas customers typically shell out $2 or more to the credit card industry every time they fill up. Goldstone said, “Except for OPEC, nobody makes more money from skyrocketing gasoline prices on American consumers than Visa and MasterCard member banks – over $10 billion this year alone if gas prices stay above $4.”

“About two dollars of every $100 consumers spend in stores or buying gasoline goes directly to the credit card industry in the form of the interchange fee, the biggest credit card fee you’ve never heard of. Interchange has skyrocketed in recent years. Interchange is a hidden fee; the rates are set in secret by the credit card industry,” said Goldstone.

American businesses and consumers paid $42 billion in total interchange fees just in 2007 on all goods and services, far more than they paid in late fees, over-the-limit fees, annual fees, universal default, double cycle billing, exchange fees, and inactivity fees combined. Consumers not only pay more than they should through unfair fees but also through inflated retail prices, especially on gasoline.

The credit card industry has come under increased scrutiny from the public, consumer groups, the Federal Reserve, and Congress in the past three years for their unfair credit card practices, policies and fees. Interchange fees have been the subject of hearings three times in recent years under both the Republican and Democratic Congresses. Large number of Democrats and Republicans favor the Credit Card Fair Fee Act; it has bi-partisan support in both chambers of Congress.

 

 

RALLY ’ROUND THE PUMP (Via Irvine World News)

From The Irvine World News, July 1: 

Irvine business owner Mitch Goldstone is mustering the home guard not only against Big Oil; he’s got Visa and MasterCard in his sights, too, over the cost of fuel. Goldstone has put out a call to all motorists who are “steaming mad” about prices at the pumps to join his All American Rally. The rally is scheduled for Thursday, the day before the Fourth, from 8 to 10 a.m. next to the Chevron station at the corner of Barranca Parkway and Jamboree Road.
    “Visa, MasterCard and thousands of its member banks are making windfall profits every time you fill up and pay with a charge card,” says Goldstone. Goldstone says he and his partner, Carl Berman, are the lead plaintiffs in a multibillion-dollar litigation against the two credit card associations and member banks over “anticompetitive price-fixing practices.”
    “Except for OPEC, has anyone enjoyed a greater windfall from $4-plus gasoline than the credit card industry?” asks Goldstone. To learn more about Thursday’s rally, call Goldstone at his business, ScanMyPhotos.com, 949-474-7654.
– Don Dennis

Click here for more.

“Old-time protest of high fuel prices might be a gas” (via LA Times)

Excerpt from July 1 Los Angeles Times

Some people just sit around and complain about a problem (Note to self: Look in the mirror), and other people actually try to make things happen….  Small-business owner Mitch Goldstone is, however, and he’s organizing a shindig Thursday at the ungodly hour of 7:30 a.m. that he hopes will get people steamed over gas prices. He thinks it’ll be the protest that gets the country up in arms, but I have my doubts: The occasional talk of “no-drive” days around the country doesn’t seem to go anywhere….  Even the Goldstone “protest” is taking a slight turn. Its main pitch is that credit card companies are taking advantage of the high gas prices through additional fees they’re getting from merchants who handle charge.

Click here to read the entire LA Times’ Dana Parsons column 

*** For complete information on The Great American Rally Against Skyrocketing Credit Card Fees on Gasoline, click here.