Encouraging Cardholders to Leave Should Result in Interchange Fee Refunds

February 24, 2009

Another reason why interchange fees don’t make “cents” for consumers, but dollars for Visa, MasterCard and its thousands of [still solvent] member banks.

Part of MasterCard, Visa and its member banks’ argument in support of merchant interchange fees is to fund their marketing rewards programs.  Retailers are taken on a ride every time a cardholder receives “free” miles for electronic payment transactions.   This expense should not be the burden of merchants and cardholders, but an expense covered by the electronic payment networks and its member banks.

Today, we learn that charge card companies are encouraging some cardholders to terminate their relationship.  These credit card companies are providing cash incentives, but you may lose your accumulated membership reward points.  Default, delay a payment, or cash out, and you risk losing all those reward benefits, even those retailers were already charged for covering these spiffs.  If that is the case, shouldn’t the banks and card companies also refund the retailers for overcharging to cover these unused rewards?

Separately, as more information on Washington’s economic stimulus plan is analyzed, it is becoming clearer that entrepreneurs, which represent much of our nation’s innovations and economic strength is left out from benefiting by the cash infusions. One immediate way to jump start the economy is to force MasterCard, Visa and its member banks to terminate its merchant interchange fees.  Now that taxpayers own vast equity in the banks (which own nearly half ownership in MasterCard and Visa) this is the opportunity to require the banks to act now. 

This nearly $60 billion dollar expense accounts for nearly 1.7% of all sales when credit cards are used.  This plan would immediately return what in many cases is the difference between profits and losses back to retailers and American consumers.

How Visa and MasterCard Can Help Stimulate the Economy

February 20, 2009

A solution to immediately create bank-funded stimulus package that instantly gets capital into the hands of small businesses and consumers – end Visa and MasterCard’s and its member banks credit card interchange fees.

Now that we own the banks, end merchant credit card interchange fees

February 19, 2009

During this unprecedented global financial meltdown , the United States and its citizens now own a sizable  share of major financial institutions.  The question is, why aren’t we demanding that our ownership stake in the banks force them to eliminate those unfair and anticompetitive merchant interchange fees?

To help win over credibility among merchants and consumers, the banks, along with MasterCard and Visa should be forced to move forward and reevaluate their long standing unbridled market power – every time a consumer uses an electronic payment credit or debit card.  We own the banks and we should be running them too.   

The crippled banking institution has achieved what MasterCard and Visa warned (about themselves) in their SEC IPO filings – they are becoming insolvent. The nearly $60 billion in annual merchant interchange fees and Visa and MasterCard’s merchant discount money grab must end and now is the time.

Think of what these billions in erroneous fees could do if put back in the hands of retailers and consumers, rather than funneled to Visa, MasterCard and its mismanaged member banks? 

The banks are failing us.  The government bailout proceeds are being blanketed to many far reaching overflowing pockets, like the scores of law firms that are battling millions of retailers over the merchant interchange fee antitrust litigation. It has now been about four years since launching the class-action antitrust litigation; millions of dollars have been spent to defend this unfair fee on Americans, but now that we are paying the bank’s legal fees and effectively suing ourselves, it’s time to draw more attention to and ask more questions.

[The U.S. government injected 45 billion taxpayer dollars into Bank of America and Citigroup, two of the named defendants in the merchant interchange litigation.  And, more than $400 billion to cover the banks’ losses – $60 billion would go a long way to cover these fees].

Nationalized Banks Shouldn’t Be Taking Junkets to Vegas

February 11, 2009

Calling it like it is, the banks should be Twittering and emailing their employees, rather than treating them to junkets to Las Vegas.

Today’s Las Vegas Review-Journal has an article [Obama draws ire over Vegas junket criticism, Feb 11by reporter Benjamin Spillman that quotes Phil Cooper, CEO of Encore Productions, Chuck Bowling, executive vice president at Mandalay Bay, Las Vegas Mayor Oscar Goodman, Andrew Pascal, president of Wynn Las Vegas and Mitch Goldstone, president and CEO of ScanMyPhotos.com.


Mitch Goldstone of the firm ScanMyPhotos agrees.  Goldstone annually holds several business events in Las Vegas and says he gets great deals for his Irvine, Calif.-based company.  “It is a brilliant location,” Goldstone said.   But he added his remarks don’t apply to bailout-taking banks.  “The only ones who should not be in Las Vegas are those with taxpayer dollars” he said. “They should not be anywhere.”   The decision to move the Goldman Sachs event from Las Vegas to San Francisco is even more laughable than just holding it at the original destination.  “They should be Twittering and e-mailing and using the Internet and not going to San Francisco,” Goldstone said.

Big Day For Wells Fargo

February 9, 2009

Lots of  WayTooHigh.com readers today and many from Wells Fargo too. Did they surf our site on their own time, or bill American taxpayers to read about their egregious New York Times ad campaign?  Whoever I discussed the ad with equally asked the same question: why didn’t Wells Fargo’s CEO John Stumpf just sent an email or Twitter his staff to let them know just how much he values his “team.”

Wells Fargo CEO, John Stumpf Still Wasting Taxpayer Dollars

February 8, 2009

Over a span of four years, WayTooHigh.com has regularly been read and analysed by the credit card giants, its member banks, teams of legal council, and many others around the world.  This message should therefore get noticed.  It is one more review of the banks’ brazen market power and disconnect from its customers.

Today, Wells Fargo CEO, John Stumpf, invested a significant sum to buy a full page advertisement in the national edition of The New York Times.

How much did that cost?

Nice message, Mr. Stumpf, if you were paying for it, but, I paid for it!  Along with millions of other U.S. taxpayers, through the U.S. Treasury Capital Purchase Program, we covered your message that Wells Fargo employees are deserving of praise and recognition. 

Couldn’t you just have sent them an email or Twitter them?

It might have actually been less money to just send your “hardworking employees” to The Wynn Resort in Las Vegas [ “Wells Fargo Wants to Party, but Maybe Not,” NYT, Feb 3],  rather than paying for this ad. After all, the global economic catastrophe that you are partly to blame for, has one benefit, super cheap Vegas hotel rooms.  You could have sent about 300 employees to the Wynn Resort for two nights for what you (I) paid for this advertisement. Last month for CES, I stayed at The Encore – Wynn property in Las Vegas – for $169 a night, thanks partly to the banking industry’s mismanagement and destruction of our economy.  

You’ve come a long way from just being accused of illegally fixing the prices for the antiquated and nearly $60 billion annual merchant interchange fee gimmick of which Wells Fargo is a member bank and named defendant.