States join the fight against proposed limits to credit card fees

State governments have become an unlikely ally of the banking industry in a fight against putting limits on the fees that credit and debit card issuers can charge to retailers.

via States join the fight against proposed limits to credit card fees.

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Overview: Senate passes financial reforms, final bill expected in July

On its way to being approved, the Senate’s bill saw a number of attempts at amendment. Illinois Democrat Dick Durbin suggested a provision that would allow merchants to set minimums when it comes to credit and debit card transactions.

Doing so would help retailers losing money on smaller transactions because of the interchange fees they have to pay to card networks like Visa and MasterCard. Durbin’s measure was added to the final bill that passed the Senate.

via Overview: Senate passes financial reforms, final bill expected in July.

Retailer weighs in on financial reform in Washington | Photo Marketing Assn

ATM Marketplace reports Mitch Goldstone of ScanMyPhotos.com, Irvine, Calif., recently took his ongoing battle against fees imposed by credit card companies to Capitol Hill as the Senate debated financial reform legislation. Goldstone is working to educate consumers, congressional leaders and the media about the difference between credit/debit card interchange fees and ATM surcharge fees, and the possible impact of various amendments attached to the sweeping financial reform bill.

via Retailer weighs in on financial reform in Washington :.

Sunday Morning: Ben Stein’s Take on Financial Reform –

Sunday Morning: Ben Stein’s Take on Financial Reform – Watch Online – Clicker.com.

Fredericksburg.com – Lawmakers want to set limits

People these days may use debit cards for purchases as small as a dollar, but retailers still pay a fee for those purchases, and they say it eats into their profit margins.

Retailers say the swipe fees are too high, especially for debit cards, which retailers say formerly passed at face value, like paper checks. Charging fees for such cards is a way to “circumvent the system and are reducing the face value of debit card transactions,” according to the National Retail Federation.

via Fredericksburg.com – Lawmakers want to set limits.

Retailers defeat banks in debit/credit card fee fight – bizjournals:

Retailers didn’t get everything they wanted — limits on credit card interchange fees will have to wait for future legislation. But they’re thrilled they won a partial victory in a lobbying battle that has been going on for years.

via Retailers defeat banks in debit/credit card fee fight – bizjournals:.

Rep. Welch urges support of Durbin amendment (Video)

YouTube – Rep. Welch urges support of Durbin amendment.

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YouTube – Hate your Credit Card Bills? MAXED OUT – NOW ON DVD

YouTube – Hate your Credit Card Bills? MAXED OUT – NOW ON DVD.

Follow the conversation on Twitter – http://www.Twitter.com/WayTooHigh

YouTube – FRONTLINE | “The Card Game” | PBS

YouTube – FRONTLINE | “The Card Game” | PBS.

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YouTube – FRONTLINE “The Card Game” | Excerpt 1: Disclosure | PBS

YouTube – FRONTLINE “The Card Game” | Excerpt 1: Disclosure | PBS.

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YouTube – Credit Card Gas Fee Rally

YouTube – Credit Card Gas Fee Rally.

[Repost]

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YouTube – Debit Card Dangers

YouTube – Debit Card Dangers.

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YouTube – Small Business community applauds finalized Debit/Credit Card Code of Conduct

YouTube – Small Business community applauds finalized Debit/Credit Card Code of Conduct.

YouTube – Bipartisan coalition calls on House leadership to support cracking down on credit card swipe fees

via YouTube – Bipartisan coalition calls on House leadership to support cracking down on credit card swipe fees.

Credit Card Fees 5 Evil Things Your Credit Card Company Has Planned For You

MasterCard’s Banga Goes From Cheerleader to Protector – WSJ.com

The financial-overhaul bill approved by the Senate earlier this month includes provisions that could encourage consumers to use cash and checks over electronic payments. If the legislation is signed into law, it also could drain billions of dollars in annual revenue from the banks that issue cards branded with the MasterCard logo.

Incoming MasterCard CEO Ajay BangaThe legislative tussle has thrown the 50-year-old Mr. Banga into a thorny debate just as he is preparing to succeed the retiring Robert Selander, who has been CEO of MasterCard since 1997.

via MasterCard’s Banga Goes From Cheerleader to Protector – WSJ.com.

Editorial – Will That Be Cash? Or Big Bank Fees? – NYTimes.com

Small retailers have complained for decades about the seemingly arbitrary fees that they are required to pay Visa and MasterCard for processing debit transactions. The Senate finally responded earlier this month when it added price controls on the controversial fees to its financial reform bill.

via Editorial – Will That Be Cash? Or Big Bank Fees? – NYTimes.com.

The Economics and Regulation of Payment Card Interchange Fees

This event is co-hosted by the The International Center for Law and Economics and the Mercatus Center at George Mason University.

This conference will bring together legal and economic experts—authors and interpreters of this literature—with the policy community to distill the academic literature and to discuss the implications of this literature for the ongoing legislative and policy debates surrounding the regulation of interchange fees and credit card markets more broadly.

Payment cards are widely used by consumers today, accounting for nearly a third of all consumer transactions in the US.  The payment systems that facilitate these transactions are complex, comprised of millions of consumers, thousands of banks, millions of merchants and a host of intermediary entities that facilitate the processing of card payments.  Without a penny in her pocket, a consumer today can walk into almost any store, hotel, or restaurant in the world and walk out with goods or services.  A consumer can buy a car with a credit card; without one, she might not even be able to rent a car.

At the heart of the system is a controversial fee—the interchange fee—usually charged by a consumer’s bank to a merchant’s bank in order to facilitate a payment card transaction.  Defenders of the fee argue that it plays a critical role in allowing card issuers to persuade individuals to carry the card brand and merchants to accept it.  Without the interchange fee, the evolution from a paper-based payments system to a more efficient electronic system—particularly one incorporating not only a payment function but also a credit function—would be dramatically impaired and both consumer and merchant benefits would be largely undermined.

But merchants claim that the fee, even if necessary, is excessive, totaling billions of dollars a year more than the direct administrative costs of operating payment card systems—the only costs these merchants believe they should bear.  Based on these claims, some merchants have supported the regulation of interchange fees, at both the federal and state levels, and have engaged in a pervasive and heated campaign to build public and political support behind their efforts.

This conference schedule will include a lively, moderated discussion of the central issues in the debate and how they will—and should—play out on the political stage.  And, we will also host a session by noted economic and legal experts, discussing the policy relevance today of some of the classic literature informing the current debate.  Our day concludes with lunch and a keynote presentation from Todd Zywicki of George Mason University Law School on “The Economics of Payment Card Interchange Fees and the Limits of Regulation.”

Conference Speakers include:

Thomas Brown, O’Melveny & Myers LLP
Sujit Chakravorti, Federal Reserve Bank of Chicago
Thomas Durkin, Former Senior Economist, Federal Reserve Board
Mike Konczal, Roosevelt Institute
Geoffrey Manne, International Center for Law and Economics
Megan McArdle, Atlantic Monthly
Tim Muris, former Chairman, Federal Trade Commission
Felix Salmon, Reuters
Steven Semeraro, Thomas Jefferson University
Fred Smith, Competitive Enterprise Institute
Joshua Wright, George Mason University Law School

To register for this conference, please register below or contact Megan Gandee at mmahan@gmu.edu or by phone at 703.993.4967.

The Economics and Regulation of Payment Card Interchange Fees | Mercatus.

Now Visa and MasterCard Are Concerned About Consumer Card SwipeFees?

{via NCASOnline]

WASHINGTON – Visa, MasterCard and its member banks have created a new Web site to bring down Senator Durbin’s swipe fees amendment, while villainizing retailers in the process: Consumers Against Retail Discrimination (CARD Alliance).

Mike Konczal, a fellow at the Roosevelt Institute, points to the “sincerity” of this new alliance in a Washington Post blog: “You have to suddenly believe that all these firms are suddenly very concerned about consumers paying fees. Did you catch that? Visa and the major banks are worried that you may have to pay a fee!”

Konczal continues pointing out the problem with the coalition’s argument, which claims that “If interchange revenue were artificially limited by the government, the millions of consumers who use small financial institutions would be forced to turn to large, national banks for their debit cards — further consolidating the financial system.”

However, as the Durbin language states, the amendment exempts small financial institutions with less than
$10 billion from the reasonable debit fee requirement. “But read that again,” writes Konczal. “Citi, JP Morgan, and Bank of America are terrified about financial sector consolidation. Where were you guys on the SAFE Banking Act debate?!?”

Durbin even clarifies this point in a letter he sent to the Independent Community Bankers of America and the Credit Union National Association:

“I will tell you what I have told small banks and credit unions in my home state of Illinois — that my amendment does not disadvantage small banks and credit unions, and in fact goes to great lengths to protect their ability to successfully compete with big banks in offering payment cards to consumers. I urge you to accurately represent to your members what my amendment does, and to clarify any misimpressions of what it does not do. ”

The coalition also expresses concern about setting payment minimums for debit card users, which many consumers probably don’t even realize is a “no-no” according to a retailer’s operating rules. “Part of this law gives them [retailers] a legal option in setting a minimum. Many places have off the books minimums that you’ve probably already seen — hopefully that quote above gives you a sense why,” writes Konczal.”

And “that quote above” comes from Jinger Duryea, president of C.N. Brown Company, the Big Apple Food Stores, in Maine:

“Credit cards are the lifeline of my business as customers use plastic for everything from; a cup of coffee, to a pack of gum, to a tank of gasoline. Credit cards and debit cards are easy to use, but what customers don’t know is that every time they use a credit card, I pay a fee. For example, a customer purchases a local newspaper (75 cents retail), my profit is 9 cents. If the customer is using a debit card I would pay 25 cents for the transaction fee plus .08% interchange fee. If the customer puts down a Visa credit card the transaction fee would be 19 cents plus 1.68% interchange fee. Regardless of the payment option I lose money on the sale.”

“[G]iving businesses choices over their payment mechanism is the whole point of this amendment. A little bit of price transparency, competition between paying options and a little bit of actual decision-making by someone other than a duopoly can do wonders in creating an actual market mechanism,” notes Konczal, advising Washington Post readers to “Make sure you know the facts of this very market-friendly way of trying to regulate this duopoly before you make a judgment on whether or not to support it.”

CARD Coalition Gets “Warm” Welcome.

Lawmakers Back Crackdown On Card Swipe Fees – Law360

Law360, New York (May 27, 2010) — A bipartisan coalition of six U.S. House of Representatives lawmakers are calling on congressional negotiators to preserve an amendment to financial regulatory reform legislation that would put new limits on major credit card networks’ interchange swipe fees, the subject of several antitrust inquiries.

via Lawmakers Back Crackdown On Card Swipe Fees – Law360.

UPDATE 1-Senator blasts Visa, MasterCard on antitrust fears | Reuters

CHARLOTTE, N.C., May 27 (Reuters) – The author of a U.S. Senate proposal to limit debit card network fees said “serious antitrust concerns” could be raised if Visa Inc (V.N) and MasterCard (MA.N) Inc punish small banks that use their payment networks.

via UPDATE 1-Senator blasts Visa, MasterCard on antitrust fears | Reuters.

Senator Durbin to Visa and MasterCard: Stop Threatening Small Banks

DURBIN TO VISA AND MASTERCARD: STOP THREATENING SMALL BANKS

[WASHINGTON, D.C.] – In a strongly worded letter to the CEOs of Visa and MasterCard, Assistant Senate Majority Leader Dick Durbin (D-IL) told the credit card giants to stop threatening small banks with interchange fee changes and to commit not to take any steps that would purposefully disadvantage small card issuers. Visa and MasterCard began making these threats after Durbin successfully added a bipartisan amendment to the Wall Street reform bill to help reduce the interchange fees that small businesses pay on every credit and debit card sale.

“It appears that in an effort to frighten small banks and credit unions into opposing the amendment, your companies are threatening to make changes to your small bank interchange fee rates and to your network operating rules. These changes, which are not in any way required by the amendment, are unnecessary and would disadvantage small card-issuing institutions … The simple fact is that small banks would not be harmed or punished under the amendment unless your companies decide to harm or punish them.

Further, I warn you that if your companies coordinate with each other or with your largest member banks to make changes to your fees and rules, it would raise serious concerns that you are engaging in an unlawful restraint of trade.

I urge you to commit that if this amendment becomes law, you will not take purposefully steps to disadvantage small issuers,” Durbin wrote.

Both Visa and MasterCard have repeatedly and incorrectly claimed that the Durbin amendment would harm community banks and credit unions. In fact, the amendment goes to great lengths to protect the rights of small financial institutions, exempting all but the largest 1% of banks and credit unions from the amendment’s debit fee regulations.

An estimated $48 billion in swipe fees were charged by credit and debit card networks in 2008 – this money came out of the bottom line of small businesses and merchants across America, and 80 percent of this money went to just ten large banks.

A copy of today’s letter is pasted below and attached.

May 27, 2010
Joseph Saunders
Chairman and Chief Executive Officer
Visa Inc.
P.O. Box 8999
San Francisco, CA 94128-8999

Robert Selander
Chief Executive Officer
MasterCard Worldwide
2000 Purchase St.
Purchase, NY 10577-2509

Dear Mr. Saunders and Mr. Selander:

I write in regard to the unfortunate coordinated campaign your companies have launched distorting the impact of my recently-passed interchange amendment on small banks and credit unions.

It appears that, in an effort to frighten small banks and credit unions into opposing the amendment, your companies are threatening to make changes to your small bank interchange fee rates and to your network operating rules.  These changes, which are not in any way required by the amendment, are unnecessary and would disadvantage small card-issuing institutions.

I ask you each to state unequivocally that you are neither threatening nor planning to take steps that would purposefully disadvantage small institutions, should the amendment become law.   Further, I warn you that if your companies coordinate with each other or collude with your largest member banks to make changes to your fees and rules, it would raise serious concerns that you are engaging in an unlawful restraint of trade.

The amendment I offered, which was passed by the Senate in a bipartisan vote of 64-33, would establish a reasonable interchange fee standard for transactions involving debit cards issued by banks with assets of over $10 billion.  The amendment would also prevent your companies from punishing merchants who provide discounts to customers for use of a particular card network (e.g., Visa vs. MasterCard) or a particular form of payment (e.g., cash vs. debit card vs. credit card), or who set minimum or maximum dollar thresholds for use of a credit card.

This language was carefully drafted in order to avoid creating any disadvantage for small banks and credit unions, and I went to great lengths to protect the ability of these small institutions to successfully compete with big banks in offering payment cards to consumers.

As you know, the amendment does not in any way require changes to the interchange fee rates that your companies have established for small banks and credit unions. In fact, 99% of all U.S. financial institutions are exempted from the amendment’s debit fee regulations.

Nor does the provision in any way permit merchants to discriminate against cards issued by small issuers.  It does not touch your current network operating rules that require that cards be honored in the same way regardless of the identity of the bank that issued the card.

The only way that small banks or credit unions could experience interchange rate reductions or be discriminated against is if your companies decide to cut small bank interchange rates and rescind your operating rules that currently prohibit discrimination between card-issuing banks.  Sadly, it appears from your companies’ public statements and other communications that you are contemplating just such steps.

In a May 20 statement, Visa charged that the amendment “could especially harm community banks and credit unions that depend on interchange to offer competitive banking services to firefighters, police officers, teachers, veterans, congressional staffers and other customers.”  Also in a May 20 statement, MasterCard said the amendment will “punish banks on Main Street because the ‘carve-out’ for banks with assets below $10 billion is a sham.”  The simple fact is, however, that small banks would not be harmed or punished under the amendment unless your companies decide to harm or punish them.

If your companies were to coordinate such punitive actions in the same way that you appear to have coordinated your messaging tactics, serious concerns would be raised that you are engaging in an unlawful restraint of trade.  Further, I would caution you not to collude with your largest member banks to change your fees and rules in an effort to protect the big banks against competition from smaller card-issuing banks.  Such steps would also raise serious antitrust concerns.

I know that your companies strongly oppose the amendment that was adopted by the Senate, and I am not surprised by your opposition.  The provision would correct anti-competitive aspects of a system that has brought enormous revenue to your companies and to the largest banks at the expense of America’s small businesses and consumers.  Nevertheless, I urge you to commit that if this amendment becomes law, you will not take steps to purposefully disadvantage small issuers.  By making such a commitment, you will provide much-needed reassurance that you are not attempting to protect the biggest banks you serve by threatening the smallest.

Please respond in writing to this letter by June 14.  I look forward to receiving your responses.

Sincerely,
Richard J. Durbin
United States Senator

cc:       The Credit Union National Association
The Independent Community Bankers of America
The National Association of Federal Credit Unions
The American Bankers Association
The Financial Services Roundtable
The Community Bankers Association of Illinois
The Illinois Bankers Association
The Illinois Credit Union League

Source: durbin.senate.gov

Mr. Goldstone goes to Washington … and Tweets | ATM Marketplace

Armed with a 1980s credit card imprinter, a Twitter account and a blog, retailer Mitch Goldstone is waging war on interchange fees. He’s a small business owner, equipped with an old machine and new social media tools, trying to tackle the giant credit card industry.

Last week, Goldstone was on Capitol Hill as sparks flew on the Senate floor in the debate over financial reform legislation. His goal: to help educate consumers, Congressional leaders and the media about the difference between credit/debit card interchange fees and ATM surcharge fees, and the possible impact of various amendments attached to the sweeping financial reform bill.

“I took the old imprinter with me as a visual prop so that I could easily explain exactly what interchange fees are,” said Goldstone, CEO of ScanMyPhotos.com, a California-based online retailer. “Interchange fees and ATM surcharges are entirely different, but they’re both very complicated topics. One U.S. Senator even admitted that he had no idea what ATM fees are because he has never used an ATM.”

Click here to read full story

via Transaction Processing | Mr. Goldstone goes to Washington … and Tweets | ATM Marketplace.

Reach Mitch Goldstone and Follow the Conversation

http://www.twitter.com.waytoohigh

http://www.scanmyphotos.com

Analysis of FinReg Fight – Time for C-SPAN and More Calls

Analysis of FinReg Fight – Time for C-SPAN and More Calls.

Durbin Urges Senate Conferees To Support Swipe Fees Amendment

WASHINGTON – Senator Richard Durbin (D-IL) sent a letter yesterday to Senate conferees for the Wall Street reform bill, also known as the financial reform bill, urging members to include his amendment that reduces interchange fees. Durbin’s amendment passed the Senate 64-33 on May 13 and provides swipe fee relief.

“My amendment would help reform a card industry that has been constructed by Visa and MasterCard to produce large benefits for the biggest banks at the expense of Main Street businesses and consumers,” Durbin wrote.

“The amendment has been carefully crafted to address anti-competitive elements in the interchange fee system while preserving the ability of small banks and credit unions to compete with big banks in issuing cards. This amendment clarifies what was already true: the Wall Street reform bill is good for small businesses and good for consumers. I urge you to retain this amendment in the conference report,” Durbin said.

In addition to the swipe fees appeal, Durbin also asked the Senate conferees to include in its conference report a “consumer financial watchdog” that would assist families and small businesses as they select mortgages, credit cards and other loans.

Also, check out a video of Rep. Peter Welch (I-VT) at a press conference on March 25, as a bipartisan coalition of lawmakers called on House negotiators to retain Durbin’s amendment that legislation cracking down on credit card swipe fees.

“Small businesses around the country are struggling to stay in business as they bear the brunt of the credit card industry’s out-of-control swipe fees. These cash register rip-offs prevent small businesses from growing and creating jobs, and consumers end up paying the price,” Welch said. “This practical, bipartisan proposal will bolster small businesses by cracking down on the worst abuses perpetuated by the credit card industry.”

via Durbin Urges Senate Conferees To Support Swipe Fees Amendment.

Why Card Companies Want You To Pay With Credit, Not Debit | MyBankTracker.com

According to the February 2010 Nilson Report, the number of debit and prepaid card transactions in the U.S. for 2009 totaled 36.2 billion for Visa and MasterCard. At approximately ten cents per transaction, banks and the two credit processing companies took in approximately $3.62 billion.

via Why Card Companies Want You To Pay With Credit, Not Debit | MyBankTracker.com.

Banks, credit unions face tough fight on swipe fees – TheHill.com

Banks and credit unions face an uphill battle to defeat legislation that would limit debit card fees paid by merchants.

via Banks, credit unions face tough fight on swipe fees – TheHill.com.

MasterCard Wants Programmers to Use Its Payment Technology – Bits Blog – NYTimes.com

There has been a lot of talk about digital forms of payment replacing cash and even credit cards. But MasterCard intends to stay in the middle of the technological innovation.

via MasterCard Wants Programmers to Use Its Payment Technology – Bits Blog – NYTimes.com.

Ezra Klein – Large banking interests create a Web page against interchange finreg

You want to know how I can tell that the interchange reform in the Senate bill was a surprise story? Because the last-minute lobbying campaign against it is so obviously a thrown-together, half-baked effort by the biggest banks.

via Ezra Klein – Large banking interests create a Web page against interchange finreg.

Victors in Senate Interchange Skirmish Take Battle to the House | Digital Transactions

(May 25, 2010) Fresh from their Senate victory last week, proponents of interchange regulation on Tuesday urged U.S. House of Representatives leaders to adopt the so-called Durbin amendment that could limit debit card interchange and overturn some bank card network rules in order to make it easier for merchants to discount for other payment types and set minimum transaction amounts for credit card transactions.

via News.

News

(May 25, 2010) Fresh from their Senate victory last week, proponents of interchange regulation on Tuesday urged U.S. House of Representatives leaders to adopt the so-called Durbin amendment that could limit debit card interchange and overturn some bank card network rules in order to make it easier for merchants to discount for other payment types and set minimum transaction amounts for credit card transactions.

via News.

Merchants On Verge Of Big Win In Debit And Credit Card Fee War– Antitrust Today

Merchants have lobbied Congress to limit or eliminate interchange fees for years. And a federal merchants’ putative class action in New York claims that Visa’s and MasterCard’s interchange fees result from price-fixing in violation of Section One of the Sherman Act. According to the plaintiffs, Visa and MasterCard set their interchange rates through collusion with their member banks, which compete with each other: that is, price-fixing by competitors with the networks as facilitators.

via Merchants On Verge Of Big Win In Debit And Credit Card Fee War– Antitrust Today.

Stores’ hope of reduced debit card fees backed by Senate – St. Petersburg Times

Retailers’ crusade against $48 billion in hidden bank fees they pay for credit and debit card transactions has won a spot in the federal financial reform bill.

via Stores’ hope of reduced debit card fees backed by Senate – St. Petersburg Times.

Pelosi Urged to Ensure Passage of Senate Debit-Card Fee Limits – BusinessWeek

May 25 (Bloomberg) — The U.S. House of Representatives should support a Senate amendment to the financial overhaul bill that limits “swipe” fees charged to merchants who accept debit cards, three congressmen told Speaker Nancy Pelosi.

via Pelosi Urged to Ensure Passage of Senate Debit-Card Fee Limits – BusinessWeek.

How the Finance Bill Affects Consumers – DealBook Blog – NYTimes.com

For consumers trying to figure out what the financial overhaul bill means for them, the legislation the Senate passed Thursday offers some tantalizing possibilities, Ron Lieber writes in The New York Times.

via How the Finance Bill Affects Consumers – DealBook Blog – NYTimes.com.

MasterCard Launching New Open API Developer Portal – MarketWatch

[via MasterCard Worldwide corporate press release]

PURCHASE, N.Y., May 25, 2010 (BUSINESS WIRE) — MasterCard Worldwide announced that later this year it will release Open Application Programming Interfaces (Open APIs) for third–party and independent software developers around the world. By opening up previously proprietary payments and data services, developers will be able to create a new wave of e-commerce and mobile payment applications.

The new Open API program is the first initiative from the newly created MasterCard Labs. A new developer portal will also be launched to enable developers to easily sign up for access to all of the Open APIs that MasterCard makes available will also be launched.

Through the portal, MasterCard will provide developers with technical documentation, software development kits (SDKs), sample source code, reference guides, and “virtual sandboxes” for testing new and innovative applications. A developer forum designed to spur collaboration between MasterCard engineers and developers will also be an integral component of the new portal.

“We are excited about tapping into the ingenuity of software developers around the globe to help create the next generation of game-changing payment applications,” said Josh Peirez, Chief Innovation Officer, MasterCard Worldwide. “We feel this will unleash innovation within our industry especially in the burgeoning areas of e-commerce and mobile payments.”

In addition to payments, MasterCard has identified approximately 20 platforms and services that it plans to open up to developers via the portal. These platforms and services provide additional functionality and enhancements to MasterCard’s payment capabilities. The Open APIs will further enhance the development of new applications and systems beyond those currently available, including CRMs, ERPs, online games, merchant e-commerce web sites, eWallets, mobile applications, and payroll systems.

MasterCard payment and data services also could be integrated with other data sources and functions to create “mashups” — new applications that are a result of combining multiple data sources.

“Over the past few years, we have used some of our Open APIs internally to create groundbreaking new iPhone applications, such as MasterCard ATM Hunter and MasterCard Easy Savings,” said Garry Lyons, Group Executive, Research and Development, MasterCard Worldwide. “Opening these and other APIs to the global development community developers will provide developers the opportunity to leverage MasterCard’s leading payment platforms and come up with new ideas that may not have been previously considered or thought possible.”

“In addition, our new Open API program and developer portal will strengthen MasterCard’s position as an industry leader in innovation and give us an even greater competitive advantage as the payments industry continues to evolve,” said Lyons.

Interested developers should contact MasterCard at api@mastercard.com in order to learn more on how to participate in the program. By virtue of the guidelines applicable to the program, all developers will be approved and registered by MasterCard to ensure that MasterCard payment and data services continue to be used appropriately and productively.

About MasterCard Worldwide

MasterCard Worldwide advances global commerce by providing a critical economic link among financial institutions, businesses, cardholders and merchants worldwide. As a franchisor, processor and advisor, MasterCard develops and markets payment solutions, processes over 22 billion transactions each year, and provides industry-leading analysis and consulting services to financial-institution customers and merchants. Powered by the MasterCard Worldwide Network and through its family of brands, including MasterCard(R), Maestro(R) and Cirrus(R), MasterCard serves consumers and businesses in more than 210 countries and territories. For more information, go to www.mastercard.com. Follow us on Twitter: @mastercardnews.

SOURCE: MasterCard Worldwide

MasterCard to Unleash Payment Innovation by Launching New Open API Developer Portal – MarketWatch.

Brown Limits Debit Card Fee in Reform Bill

“These fees are far higher than the actual cost of the of processing those transactions, which means small business always gets shortchanged when they accept a debit card,” he said. “It also means customers pay more at the store and more at the pump or wherever they are, whether they pay with cash or with plastic, without even being aware that method of payment determines fee rates.”

via Brown Limits Debit Card Fee in Reform Bill.

Fitch Expects Proposed Interchange Regulation to Be Neutral to First Data | Business Wire

NEW YORK–(BUSINESS WIRE)–Fitch Ratings expects that proposed limits on debit card interchange fees, as contained in a Senate Amendment passed May 13, should be neutral to First Data Corp.’s (FDC) expected financial performance going forward. The proposed regulation, if passed into law, would limit Visa and Mastercard’s ability to determine interchange fees for all card issuers with assets over $10 billion (which the senate estimates at 1% of total card issuers). Instead, interchange fees will be determined by each bank with maximum limits set by the Federal Reserve. The amendment is intended only for debit cards and does not include credit cards.

via Fitch Expects Proposed Interchange Regulation to Be Neutral to First Data | Business Wire.

Daily Herald | Credit card fees hurt small businesses

Senator Dick Durbin went to bat for Illinois consumers and small businesses in a big way and should be commended for driving the successful inclusion of an amendment as a part of comprehensive financial reform to limit the fees merchants pay in order to accept major credit cards. Outrageous fee increases hurt struggling Main Street businesses and prevent job growth.

via Daily Herald | Credit card fees hurt small businesses.

Follow along on Twitter – http://www.Twitter.com/WayTooHigh

Retailers beat banks in debit fee fight – The Business Journal of the Greater Triad Area

Financial regulatory reform may give retailers a long-awaited victory over banks in the battle over fees charged to merchants on credit and debit card transactions.

via Retailers beat banks in debit fee fight – The Business Journal of the Greater Triad Area.

Pro-Con | Can the Senate finance bill curb Wall Street? – KansasCity.com

In a sign of just how important politics can be to the legislative process, the bill has, over the course of the month-long floor fight, become stronger overall. So toxic are the optics of siding with Wall Street, that a number of popular amendments were adopted.

via Pro-Con | Can the Senate finance bill curb Wall Street? – KansasCity.com.

HEARD ON THE STREET: Reading the Tea Leaves on Financial Overhaul – WSJ.com

There is also uncertainty, for example, as to whether an amendment pushed by Senator Richard Durbin on credit-card interchange fees was intended to also extend regulatory oversight to other card fees. A spokesman for the senator said that wasn’t his intention. But if that isn’t spelled out, investors will be concerned about the potential impact on card processors like Visa and MasterCard and card issuers like American Express.

via HEARD ON THE STREET: Reading the Tea Leaves on Financial Overhaul – WSJ.com.

Will the price of a swipe drop? • Business (www.HometownAnnapolis.com – The Capital)

“In terms of cost, we are sort of prisoners to the credit-card companies,” he said. “All costs of business are reflected in the cost of merchandise. The customer ends up paying for it, even though most of them don’t even know it or see it.”

Debit cards are a particular concern.

“A debit charge is not like a credit card,” he said. “It’s a plastic check, the money is in your account, there’s no risk of fraud. And yet they have these very large fees on it that retailers just thought were excessive.”

via Will the price of a swipe drop? • Business (www.HometownAnnapolis.com – The Capital).

U.S. Banks Post Profit, but Woes Persist – WSJ.com

WASHINGTON—A total of 775 banks, or one-tenth of all U.S. banks, were on the Federal Deposit Insurance Corp.’s list of “problem” institutions in the first quarter, as bad loans in the commercial real-estate market weighed on bank balance sheets.

via U.S. Banks Post Profit, but Woes Persist – WSJ.com.

VISA’s Lobbying Effort to Stop Financial Reform Hits a New Low — WASHINGTON , May 21 /PRNewswire-USNewswire/ —

VISA using children, firefighters and seniors to justify fleecing small employers and consumers

WASHINGTON , May 21 /PRNewswire-USNewswire/ — Dennis Lane, single store 7-Eleven Franchise owner and national spokesman for the campaign to Reform Swipe Fees NOW!, released the following statement regarding VISA’s response to the U.S. Senate’s passage of sweeping financial regulatory reform.

“The credit card industry has officially hit a new low in their campaign to block financial reform.  To justify fleecing small business owners like me, they are now hiding behind seniors, veterans, firefighters and even children to justify their business practices.  Their unprecedented multi-million dollar lobbying having failed, they have now resorted to using human shields in a last-ditch effort to scuttle reform that will benefit millions of small businesses and their customers.”

From VISA’s statement upon passage of the Senate financial reform bill (S. 3217)

• “Those who rely on prepaid cards for government disbursement, such as child support, could be particularly hard hit.”
• “…could especially harm community banks and credit unions that depend on interchange to offer competitive banking services to firefighters, police officers, teachers, veterans, congressional staffers and other customers.
• “This could be especially devastating for those on a fixed income who rely on prepaid cards for government disbursements such as social security.”

“Each of these suggestions is ridiculous, and VISA knows it. Rather than hurt workers and families, swipe fee reform will help small businesses grow, improve wages and benefits, and lower prices for consumers.  But with its lobbying efforts failed, it’s become increasingly clear that the card industry is willing to say just about anything to protect the billions they are making exploiting small business.

“We need Congress to finish what it has started. For reform to be complete, it must include interchange reform.  For our economy to grow again, we cannot allow VISA and the nation’s largest financial institutions to continue siphoning away billions each year from hardworking small business owners.”

About Reform Swipe Fees NOW: Reform Swipe Fees NOW is a project by the Retail Industry Leaders Association (RILA).  The project unites U.S. business owners, small and large, in a campaign for fair credit card swipe fees.

SOURCE Reform Swipe Fees NOW

VISA’s Lobbying Effort to Stop Financial Reform Hits a New Low — WASHINGTON , May 21 /PRNewswire-USNewswire/ —.

U.S. Senate Passes Commonsense Swipe Fee Reform to Aid Small Business and Consumers

Main Street merchants applaud Senate for taking immediate action to help retailers

and their customers across the nation

WASHINGTON— The Merchants Payments Coalition, representing 2.7 million U.S. businesses, released the

following statement after the U.S. Senate voted to include commonsense swipe fee reform in the Restoring

American Financial Stability Act of 2010 through an amendment introduced by Sen. Richard Durbin. Specifically,

the measure will ensure the debit card transactions are reasonable and proportional to the cost of processing the

transaction:

“Tonight, the Senate stood up to the credit card companies and big banks and stood strong for Main Street

businesses and our customers. Swipe fees have spiraled out of control in recent years, and this amendment is

necessary to rein in these excessive fees and ensure that Main Street receives a fair shake. These fees are harmful

across the board – from large businesses to small retailers to American consumers.”

“Because of Sen. Durbin’s amendment and his efforts to push this measure through the Senate, business owners

and their customers are one step closer to real, tangible reform. This amendment will enhance transparency and

help protect businesses and their customers alike from these unfair, hidden fees.”

“Now that the Senate has acted in such a strong and unambiguous way, business owners across the country hope

that Congress will continue moving forward with this measure to bring fairness to credit and debit card swipe fees

– and that it eventually reaches President Obama’s desk to become law.”

###

The Merchants Payments Coalition 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 more information about credit card swipe fees, please visit http://www.UnfairCreditCardFees.com.

[via MPC Press Release]

Video: President Obama Hails Wall Street Reform S.3217

Video: President Obama Hails Wall Street Reform

Follow the conversation http://www.WayTooHigh.com

http://www.twitter.com/WayTooHigh

Senate Stands Up for American Families and Small Businesses – Financial Reform Bill

WASHINGTON, May 21 /PRNewswire-USNewswire/ — The following is a statement from Michael Calhoun, President of Center for Responsible Lending:

“The economic crisis in our country has been deep and its impact devastating.  Today, the U.S. Senate responded boldly by passing the Restoring American Financial Stability Act of 2010 (S.3217), which protects families and small businesses from unfair financial practices and guards against  regulatory lapses like those that led to the largest taxpayer-funded bailout in U.S. history.

“Before the President can sign final legislation into law, the Senate must now reconcile its bill with similar legislation the House passed in December. We look forward to working with members of both chambers as they do that.

“But concerns remain. In this final stretch we hope lawmakers will resist Wall Street’s efforts to water down the bills’ strong provisions. First among these is the creation of a strong consumer financial protection agency with power to establish common-sense lending rules. Additionally, we urge Congress to ensure these rules are applied to all lenders – including auto dealers – and to resist attempts to give firms ‘veto power’ over proposed rules before a full public debate.

“As a result of the economic meltdown, millions of Americans have lost a great deal, including their jobs, their homes, their savings, and their confidence in our financial system. The reforms proposed by Congress will go far to helping restore trust. We call on them to act without delay.”

About the Center for Responsible Lending

The Center for Responsible Lending is a nonprofit, nonpartisan research and policy organization dedicated to protecting homeownership and family wealth by working to eliminate abusive financial practices. CRL is affiliated with Self-Help, one of the nation’s largest community development financial institutions.

SOURCE Center for Responsible Lending

Senate Stands Up for American Families and Small Businesses with Historic Financial Reform Bill — WASHINGTON, May 21 /PRNewswire-USNewswire/ —.

Visa Inc. Statement: Senate Passage of S. 3217 – (via Corp Press Release)

Visa Inc. Statement: Senate Passage of S. 3217 – VISA Inc. Corporate Press Release)

SAN FRANCISCO, May 20, 2010 (BUSINESS WIRE) — The following is a statement from Visa Inc. in response to Senate passage of S. 3217:

“We are disappointed that legislation intended to make our financial system safer and fairer for consumers includes an irresponsible and anti-consumer amendment offered by Senator Durbin. Adopted with no debate or review of facts, the amendment allows retailers’ to shift their cost for accepting debit cards onto the backs of consumers while they continue to receive the value of electronic payments — including faster check-outs, ticket lift and guaranteed payment.

“Written and backed by lobbyists representing the nation’s largest retailers, the Durbin amendment could significantly harm consumers. Consumers could have less choice, higher costs and could experience an increase in costs for checking accounts and online banking fees and reduced debit card benefits like fraud protection and rewards. Those who rely on prepaid cards for government disbursement, such as child support, could be particularly hard hit.

“For financial institutions, this amendment could force them to reduce or eliminate valuable debit and checking account services and could especially harm community banks and credit unions that depend on interchange to offer competitive banking services to firefighters, police officers, teachers, veterans, congressional staffers and other customers.

“The Durbin amendment also gives retailers the power to set arbitrary, minimum purchase requirements for consumers choosing to pay with plastic. This means that customers who want to buy a gallon of milk or loaf of bread could be forced to buy more unnecessarily if they use electronic payments at the register. This could be especially devastating for those on a fixed income who rely on prepaid cards for government disbursements such as social security.

“The Durbin amendment is not germane to the overall Financial Reform bill legislation. We hope Congress sees the amendment for what it is — an attempt by retailers to increase their profits at the expense of consumers.”

SOURCE: Visa Inc. via Businesswire

For Visa Inc. 
Steve Burke, 703-683-5004, ext. 108 
sburke@crcpublicrelations.com

Visa, MasterCard growth may outweigh regulations | Reuters

Visa, MasterCard growth may outweigh regulations | Reuters.

Visa Funded Tool “Americans for Consumer Education and Competition” Issues Statement on Financial Reform

Banking Industry Says: Tell Congress to Eliminate ‘Anti-Consumer Amendment”

The below is reprinted word-for-word by the naming industry tool, ACEC. I disagree with every element, except their right to have an opinion. What does it take to become a ACEC member? Just enter your email on their Web site.  Americans for Consumer Education and Competition is a “consumer education group”  that has the financial support of Visa Inc., and working partnerships with national organizations that share ACEC’s goal to establish an educational environment in America where financial literacy is promoted and improved among our young people. In addition, ACEC serves as a tool for the banking industry.

————————–

Dear ACEC Member,

Your consumer rights are under attack, once again, as powerful Washington, D.C. lobbyists representing large retailers are back to their old tricks – trying to get Congress to make you foot the bill for retailers’ business costs.
As you know, members of Congress and Senators are currently working on a Financial Reform Bill that is designed to address the problems that led to the financial crisis. ACEC supports the legislation’s overall objective of bringing increased transparency and fairness to the system for consumers.
Unfortunately, Senator Richard Durbin of Illinois, through political maneuvering, was able to slip in an unrelated anti-consumer amendment to the bill that has nothing to do with its underlying objective. Unbeknownst to most Senators, the Senate simply adopted the language of the mega-retailers with little debate or consideration of the facts. The Durbin provision would effectively allow retailers to reach into your wallet to decide which payment product you can use in the store checkout line. It would also force you to pay more for goods and services by allowing retailers to set minimum dollar purchase requirements for consumers who choose to use their debit or credit card at the point of sale.
Can you imagine the personal financial harm this will cause, in addition to embarrassment and confusion, if you are told you have to spend a minimum of $10 when all you want or can afford at any given time is a $1.50 cup of coffee?
Make no mistake about it, this amendment is anti-consumer and a smokescreen for retailers’ real agenda. They are seeking to use you as a new profit center by shifting their cost of doing business onto your shoulders.
Retailers who accept credit and cards receive tremendous benefits. You shouldn’t be the one’s footing the bill.
Contact your members of Congress and Senators today and tell them to stand with consumers by protecting consumer choice at the checkout line while opposing powerful special interests in Washington. Click here to send a letter urging them to strip out the Durbin amendment before the final Financial Reform Bill is sent to President Obama.
Sincerely,
Michael Canning
Executive Director
Americans for Consumer Education and Competition

Recent @WayTooHigh Twitter Social Media Comments •Word getting out that I’m heading to Washington DC to hit hard and trounce MasterCard and Visa •Brought my 20-yr old manual credit card imprinter + carbon copy receipts to Washington as prop to explain #swipefees •No surprise Visa ($V) MasterCard ($MA) market cap vaporizing, if you followed WayTooHigh.com since ’05, told ya so… •Wall Street reform is easy politics, America v banks/credit/debit card #swipefees which harms our nation •Easy to get everyone to yell at banks; their [Goldman Sachs $GS] approval rating 4%, even lower than BP (11%) •There are 100’s of billions of points ($) of disagreement over credit card interchange #swipefees [#swipefees] •Only thing more painful to entrepreneurial motivation than unfair credit card #swipefees is #Palin, #Beck, #Fox, #Limbaugh •Visa, MasterCard attempts to spin/distance itself from banks’ prior 100% control still violated yrs of price-fixing [#swipefees] •James Gorman’s JPMorgan Chase [CEO, $JPM] is a named defendent in giant #swipefees antitrust class-action •Agressive grassroots 5-yr WayTooHigh.com campaign to explain ~$48bln annual CC interchange # swipefees is working •Visa ($V), MasterCard’s ($MA) + member banks blinded by mlns of angry retailers/cardholders over #swipefees  Efficiency Technology Congress Class-action Transparency Angry consumers Could erase Visa ($V) MasterCard ($MA) payment network •Your friendly mega-bank, credit union, community bank take ~$120,000,000 out of economy via interchange #swipefees every 24hrs •Other than Visa/MasterCard payment network, non-monopoly vendors sign lowest price guarantees, $V $MA should too •U.S. #swipefees merchant contracts should guarantee lowest rate anywhere [ex: Canada PIN-based debit cards, clearing checks at zero] •Using SM tools, Twitter [@WayTooHigh] for rapid response to falsehoods launched by MasterCard/Visa credit card cartel  [#swipefees] •Fun watching MasterCard exit its cave: Saying at “war” against our political system, small biz, American families [#swipefees]      •Banks’ liability hedge by unloading 1/2 of MasterCard ($MA) Visa ($V) ownership is coming back to bite ‘ em [#swipefees] •When Citigroup, Wells Fargo, Bank of America, JPMorgan Chase, et al unloaded % of $V $MA IPO, knew today would come  •Republicans are trying to water down Wall Street reforms, kill credit card oversights [#swipefees] •Wall Street Reform will pass; getting stronger every day, add end to “credit card” interchange #swipefees to bill •Amendments to tempter banks’ credit card cartel is gaining strength   [#swipefees] •Bank Facts: $2 trillion banks too large, 6 lgst represent 63% GDP, top 8 represent most credit card biz [#swipefees] •Bank lobbyiests ruining trust and credibility for American financial system’s health [#swipefees]    •Watching and enchanted with clear voice of Dem U.S. Senator Ted Kaufman (Delaware) [#swipefees] •After-the-fact CNBC Jim Cramer discussed banks share declines today

Questions Arise in the Wake of Durbin’s Winning Amendment | Digital Transactions

(May 17, 2010) Payments-industry partisans of all stripes got onto their soap boxes on Friday and Monday to praise or denounce U.S. Sen. Richard Durbin’s successful amendment that could pave the way for regulation of debit card interchange and acceptance terms. Merchant interests basked in the surprisingly large (64-33) victory they scored late on Thursday and banks and the bank card networks reeled from a rare Capitol Hill defeat. Others, however, wondered just how the Federal Reserve and the networks would carry out some of the amendment’s vaguely worded stipulations should they become law.

For now, however, merchants and the card industry are gearing up for a furious lobbying fight as the amendment, attached to the big financial-industry regulatory reform bill, moves through the legislative process. Still ahead is debate by the full Senate and reconciliation with the version the House of Representatives’ passed earlier and does not contain an interchange provision. Senate Majority Leader Harry Reid, D-Nev., hopes to have the Senate’s work done by Memorial Day. But House Financial Services Committee Chairman Barney Frank, D-Mass., indicated in the winter that he wasn’t interested in the interchange issue. A Durbin spokesperson did not respond to a Digital Transactions News e-mail Monday.

via Digital Transactions.

News

(May 17, 2010) Payments-industry partisans of all stripes got onto their soap boxes on Friday and Monday to praise or denounce U.S. Sen. Richard Durbin’s successful amendment that could pave the way for regulation of debit card interchange and acceptance terms. Merchant interests basked in the surprisingly large (64-33) victory they scored late on Thursday and banks and the bank card networks reeled from a rare Capitol Hill defeat. Others, however, wondered just how the Federal Reserve and the networks would carry out some of the amendment’s vaguely worded stipulations should they become law.

For now, however, merchants and the card industry are gearing up for a furious lobbying fight as the amendment, attached to the big financial-industry regulatory reform bill, moves through the legislative process. Still ahead is debate by the full Senate and reconciliation with the version the House of Representatives’ passed earlier and does not contain an interchange provision. Senate Majority Leader Harry Reid, D-Nev., hopes to have the Senate’s work done by Memorial Day. But House Financial Services Committee Chairman Barney Frank, D-Mass., indicated in the winter that he wasn’t interested in the interchange issue. A Durbin spokesperson did not respond to a Digital Transactions News e-mail Monday.

via News.

Why the credit card industry does better when their customers are doing worse

Since 1990, I have owned and operated a photo imaging business in Irvine called ScanMyPhotos.com and 30 Minute Photos Etc.   Times are tough for a lot of retailers just like they are for a lot of our customers.   But it’s not just the economy that make times tough for retailers and our customers.    It’s the credit card industry.

The credit card business is designed to do better when Americans are doing worse.

Visa, MasterCard and their bank partners are arbitrarily raising interest rates on existing credit and debit card, raising credit card late fees, and even charging interest on credit card debt that is paid on time.

But what actually cost consumers more is the huge, hidden fees on every credit card transaction known as interchange that is passed through to customers in the form of higher prices.  Two dollars out of every $100 spent in the U.S. in stores and gas stations goes to pay interchange also known as swipe fees whether the customer uses plastic or not.

But it’s not just credit card hidden fees that are skyrocketing, debit card fees are also rising.  As Andrew Martin New York Times article explained in: “The Card Game – How Visa, Using Card Fees, Dominates a Market” on January 5, 2010, Visa pushed signature debit over PIN debit starting in the early 1990s because they could charge 13 times the fee for signature debit than they could for PIN debit – even though PIN debit is the more secure choice for the customer and less prone to ID theft.

That’s right.

Visa decided to push signature debit even though it compromises cardholder security compared to PIN debit just to make more money for its member banks.  Visa and MasterCard also have rules that prohibit merchants from telling customers that they are paying inflated fees at point of purchase due to swipe fees.   Visa and MasterCard partner banks won’t disclose on their customer’s monthly card statements how much these fees cost them either.   And merchants are prohibited from discounting the price for customers who pay by cash, checks, or lower cost debit, such as PIN.

It’s outrageous behavior like this by Visa, MasterCard, and their partner banks that led me to become the lead plaintiff in what may be the largest class-action antitrust litigation in U.S. history, one designed to help rein in the credit card industry.

Interchange fees were designed 40 years ago to cover the costs for manual credit card imprinting (remember carbon copy receipts?). Today, technology and other efficiencies have made credit card swipe fees all but unnecessary.  There are no interchange fees when using store gift cards or writing checks – but due to unbridled market power of Visa, MasterCard and their partner banks there are still interchange swipe fees.

Ten years ago, when my company first started using digital scanning, it cost $5 dollars per photo because the process was so expensive.   Today I charge 5 cents because the process has never been cheaper.  Unlike the credit card industry, I operate in a free market.  Even if I tried to charge $5 for digital scanning like ten years ago no one would pay it – they just go down the street to the next guy with a digital scanner.

It has never been cheaper to swipe a credit or debit card.  But unlike the market for digital scanning – or for that matter gas, groceries, and all other retail goods and services — there is no competition down the street to lower the cost of card transactions.   Visa and MasterCard control 80% of the card market and their respectively card networks set the price.  That’s why credit card swipe fees, unlike retail prices, are the same in all fifty states.   No wonder the cost of swipe to consumers has tripled since 2001 to $427 per average household.

Every other economically advanced country has either reformed interchange or is in the process of doing so.    But largely because of the power of the credit card industry in Congress, Americans pay the highest credit and debit card swipe fees in the world.   We pay four times what Australians pay for the exact same set of credit card goods and services.  So write your congressperson, write your senator, and tell them that you want them to put out the fire that is burning a hole in your pocket.

Mitch Goldstone
President & CEO

ScanMyPhotos.com

MasterCard fights for card fee revenues | Reuters

“Now we’ve got to make sure we win the war,” McWilton said in an interview on Sunday. “We lost this battle. It’s a big battle. But the war wages on and we’ll be working really hard over the next week or so to stop this.”

via MasterCard fights for card fee revenues | Reuters.

National Restaurant Association Applauds Senate Interchange Reform Amendment

[via press release from National Restaurant Association]

Provision Will Help Restaurateurs By Ensuring More Reasonable Costs to Processing Transactions

(Washington, D.C.) – The National Restaurant Association today praised U.S. Senate passage of an amendment sponsored by Sen. Dick Durbin (D-Ill.) that will give restaurants and other merchants a break on some payment card-processing fees set by banks and credit card companies. The Senate voted 64 to 33 to include the proposal in the financial reform bill, which is expected to pass the Senate sometime next week.
“Interchange fees are often restaurants’ third greatest operating expense, behind labor and food costs. Merchants pay about $48 billion in interchange fees every year,” said Scott DeFife, Executive Vice President for Policy and Government Affairs for the Association. “We are grateful to Senator Durbin for his leadership on this important issue, and appreciate the bipartisan support for addressing the problem of interchange fee practices that provide zero transparency or negotiation with merchants.”

Interchange fees, also known as “swipe fees,” and related contractual restrictions benefit credit card companies and card-issuing banks at the expense of merchants and consumers. The amendment would authorize the Federal Reserve to issue regulations that ensure interchange fees imposed on debit card transactions are “reasonable and proportional” to the costs of processing transactions. Debit transactions come directly from consumers’ checking accounts and are not credit, yet the interchange rate on debit transactions continues to increase.

The proposal would also permit merchants to set minimum and maximum transaction levels for credit cards. As a result, retailers would be free to choose their payment methods. Under current rules, merchants that accept credit or debit cards cannot set minimum transaction levels, although they sometimes lose money on small charge or debit transactions. Additionally, the amendment would increase competition and allow businesses to offer discounts to customers who pay with cash, checks, PIN debit, etc., which carry lower rates than credit cards.

The Association has long advocated for fairer transaction fees and is a member of the Merchants Payment Coalition, 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. The coalition recently launched a new ad campaign to educate Congress and the public about interchange fees.

Congress Drops an Axe on the Credit Card Industry (MA, V)

Interchange fees are charged when anyone swipes a card, debit or credit. They typically range from 1%-3% of the transaction amount. So when you buy something for $100 and put it on plastic, the store you bought it from only gets between $97 and $99. The rest comes out as interchange fees.

via Congress Drops an Axe on the Credit Card Industry (MA, V).

Visa (NYSE: V) and MasterCard (NYSE: MA) Hurt By Bill Restricting Debit Card Fees : American Consumer News

On May 13, the U.S. Senate approved a bill that allows merchants to sets limits on debit card transactions. So what does this mean to the average American? It means some businesses may put either a maximum or minimum limit on purchases involving credit card or debit card purchases. There wasn’t any such law before, meaning if you bought a pack of gum with a debit card, the store owner would have to pay more in credit service charges then profits made on the product, but with a certain limit, that same store owner can assure himself at least enough money to cover the cost, and still have a profit.

via Visa (NYSE: V) and MasterCard (NYSE: MA) Hurt By Bill Restricting Debit Card Fees : American Consumer News.

7-Eleven Rolls Out Accountability Campaign | CSP Daily News / Magazine | CSP Information Group, Inc.

BREA, Calif. — 7-Eleven franchisees from around the country last week rolled out an accountability campaign to hold Congress responsible for their lack of action to reform for unfair credit-card interchange or “swipe” fees. Last summer, nearly 1.7 million 7-Eleven customers signed petitions demanding legislative intervention. More recently, an additional two million customers at other convenience stores nationwide signed similar petitions, creating an outcry from almost four million.

via 7-Eleven Rolls Out Accountability Campaign | CSP Daily News / Magazine | CSP Information Group, Inc..

MasterCard fights for card fee revenues | Reuters

“Now we’ve got to make sure we win the war,” McWilton said in an interview on Sunday. “We lost this battle. It’s a big battle. But the war wages on and we’ll be working really hard over the next week or so to stop this.”

via MasterCard fights for card fee revenues | Reuters.

Follow the 22nd Annual Card Forum & Expo

22nd Annual Card Forum & Expo.

Card Forum & Expo (annual event) 05/16-18, 2010

The largest cards and payments marketing event with more than 800 attendees, continues to provide a gathering place for the broad spectrum of payments industry players – from card issuers to analysts, associations, and service and technology providers in the credit, debit and prepaid market.

Sunday, May 16, 2010

11:00 AM –

Registration Opens

1:00 PM – 2:30 PM

Workshop A: Optimizing your Existing Payments Products for a Mobile Environment

Workshop Leader: Philip J. Philliou, Partner, PHILLIOU SELWANES PARTNERS, LLC

2:30 PM – 4:30 PM

Workshop B: Card Legislation: Lessons Learned from the CARD Act, and Preparing for the Next Wave

Workshop Leader: Duncan B. Douglass, Partner, ALSTON & BIRD, LLP

Workshop Leader: Judith E. Rinearson, Partner, BRYAN CAVE LLP & Regulatory Counsel, Chair of the Government Relations Working Group,, NETWORK BRANDED PREPAID CARD ASSOCIATION

4:45 PM – 5:30 PM

Keynote Session: The Future of Electronic Payments – Where Do We Go From Here?

Chris McWilton, President, U.S. Markets, MASTERCARD WORLDWIDE

5:30 PM – 6:30 PM

Welcome Reception in the Exhibit Hall

Monday, May 17, 2010

Click on any of the track details below to view a detailed explanation

Credit and Debit Trends Customer Loyalty Emerging Payments

7:30 AM – 8:15 AM

Continental Breakfast and Registration

8:15 AM – 8:30 AM

Welcome and Opening Remarks

Jeffrey Green, Editorial Director, Payments Group & Editor-in-Chief, PaymentsSource, SOURCEMEDIA

8:30 AM – 9:15 AM

Keynote Session: Enhancing Every Step of the Customer Experience

Joe Purzycki, Chief Operating Officer, BARCLAYCARD US

9:15 AM – 10:00 AM

Keynote Session: Back-to-Basics: The Re-Emerging Role of Retailers in Financial Services Today

Susan Ehrlich, SVP and President, Sears Financial Services, SEARS HOLDINGS CORPORATION

10:00 AM – 10:30 AM

Networking Break

10:30 AM – 11:15 AM

Keynote Panel Discussion: What We’ve Learned from the Great Recession, and Challenges Past

Moderator: Mark Van Ert, Managing Director, FG SOLUTIONS

Panelist: Daniel J. Frate, Executive Vice President , Retail Banking, PNC FINANCIAL SERVICES

Panelist: Siddharth N. “Bobby” Mehta, CEO and President, TRANSUNION

Panelist: David Wesselink, former Chairman & CEO, METRIS COMPANIES INC.

11:15 AM – 12:00 PM

Analyst Roundtable: The Impact of Regulation on Issuer Marketing

Moderator: Kevin O’Donnell, VP, Credit Issuance, DISCOVER FINANCIAL SERVICES

Panelist: Dennis Moroney, Research Director, Bank Cards, TOWER GROUP

Panelist: Elizabeth Robertson, CCM, Director of Payments Research, JAVELIN STRATEGY AND RESEARCH

Panelist: Ron Shevlin, Senior Analyst, AITE GROUP

12:00 PM – 1:00 PM

Maximizing Your Debit Revenue is as Easy as 1-2-3

Kim Gardner, Vice President, Strategy, Analytics & Pricing, STAR NETWORK

Mary Knich, Vice President, ATM Products, FIRST DATA

Julie Bohn, Vice President, Financial Institution Loyalty Programs, FIRST DATA

12:00 PM – 1:00 PM

Networking Lunch

12:00 PM – 1:00 PM

FICO ISS Industry Innovation Session – Understanding Impacts of Economic Changes to Credit Risk Evaluation: FICO EII Economic Impact Index and the FICO® 8 Score

1:00 PM – 1:30 PM

Dessert in the Exhibit Hall

1:30 PM – 2:15 PM

Track: Credit and Debit Trends View Track Hitting Moving Targets: Five Critical Drivers Behind Cardholder Satisfaction

J. Michael Beird, Director of Banking Services Practice, J.D. POWER AND ASSOCIATES

Ryan Garton, Director of Consumer Insights, DISCOVER CARD

1:30 PM – 2:15 PM

Track: Customer Loyalty View Track Driving Loyalty in a Challenging Industry Environment

Moderator: Bram Hechtkopf, VP, Loyalty Strategy, KOBIE MARKETING

Panelist: Stef Erik Anderson, First VP Loyalty and Rewards, SUNTRUST BANKS

Panelist: Jason Dolat, Director, US Card Strategy, RBC BANK (USA)

Panelist: David Tate, VP, Customer Growth & Retention, WELLS FARGO CARD SERVICES

1:30 PM – 2:15 PM

Track: Emerging Payments View Track The Maturing of Alternative Payments: Friends or Foes?

Patricia Hewitt, Director, Debit Advisory Services, MERCATOR ADVISORY GROUP

Rene Pelegero, Senior Director, Industry Relations and Strategy, PAYPAL

2:20 PM – 3:05 PM

Track: Credit and Debit Trends View Track Regulation in Practice & New Laws in Action

Kathryn C. Kling, Partner, NELSON MULLINS RILEY & SCARBOROUGH LLP

Jon Neiditz, Partner, NELSON MULLINS RILEY & SCARBOUROUGH LLP

2:20 PM – 3:05 PM

Track: Customer Loyalty View Track Portfolio Peak Performance: Acquisition, Activation, Usage and Retention Strategies that Work

Moderator: Troy Land, Director, Loyalty Services, FIS

Panelist: Loretta Barber, AVP of Operations, BANK OF ZACHARY

Panelist: Don Denofio, CEO, SARATOGA FEDERAL CREDIT UNION

Panelist: Charles Driest, Director of Strategic Planning & Corporate Development, UNION FIRST MARKET BANCSHARES CORP.

Panelist: David Gremillion, VP, AMERICAN BANK & TRUST

2:20 PM – 3:05 PM

Track: Emerging Payments View Track Person-to-Person Payments: The Market Opportunity for Banks

Jason Hills, General Manager, Major Financial Institutions, CASHEDGE

Howie Wu, VP, Virtual Banking, BECU

3:05 PM – 3:30 PM

Afternoon Networking Break

3:30 PM – 4:15 PM

Track: Credit and Debit Trends View Track Best Practices in Selling Cards through Non-Traditional Channels

Moderator: Campbell Edlund, President & CEO, EMI STRATEGIC MARKETING

Panelist: Nancy Brook, VP, Credit Card Marketing, FIRST INTERSTATE BANK

Panelist: Anas Osman, VP, New Cardmember Acquisition, DISCOVER FINANCIAL SERVICES

3:30 PM – 4:15 PM

Track: Customer Loyalty View Track A Look at Loyalty in Retailing: Seizing Share of Wallet With Today’s New Consumer

Moderator: Kelly Hlavinka, Partner, Contributing Editor, COLLOQUY

Panelist: Shawn Bloom, General Manager, SCENE LP, CINEPLEX

Panelist: Raashi Hasija, Manager, CRM – Loyalty Programs & Partnerships, NEW YORK & COMPANY

3:30 PM – 4:15 PM

Track: Emerging Payments View Track Pioneering Payment Options for the Credit Card Industry

Moderator: Eric Lindeen, Marketing Director, ZOOT ENTERPRISES

Panelist: Kevin Boglarsky, Director, Network Products, DISCOVER NETWORK

Panelist: Virginia Garcia, VP, Strategic Insights, FISERV

Panelist: Brian Riley, Research Director, Bank Cards, TOWERGROUP

4:20 PM – 5:05 PM

Track: Credit and Debit Trends View Track Less-Risky Business: Preventing Card Fraud and Minimizing its Effects

JB Rambaud, EVP, Chief Security & Risk Officer, FISERV

4:20 PM – 5:05 PM

Track: Customer Loyalty View Track Boosting Rewards without Breaking the Bank

Julie Bohn, VP, Information Services, FIRST DATA

Jonathan Telzrow, SVP, Consumer & Commercial Credit Cards, AMALGAMATED BANK OF CHICAGO

4:20 PM – 5:05 PM

Track: Emerging Payments View Track Making Mobile Phones the Most Accessible Payments Tool

Jurgen Wassman, Regional Head – Innovative Platforms, Latin America & Caribbean Region, MASTERCARD WORLDWIDE

5:05 PM – 6:30 PM

Reception in the Exhibit Hall

Tuesday, May 18, 2010

Click on any of the track details below to view a detailed explanation

Credit and Debit Trends Customer Loyalty Emerging Payments

7:45 AM – 8:15 AM

Continental Breakfast

8:15 AM – 9:00 AM

How New and How Normal?

Peter Vaughn, Senior Vice President, Global Brand Management and Marketing, AMERICAN EXPRESS COMPANY

9:00 AM – 9:45 AM

General Session: The Appetite for Prepaid: Evaluating Prepaid as Part of your Overall Product Mix

Jim Dean, Vice President, ROBERT E. NOLAN COMPANY

Kirsten Trusko, President and Executive Director, NBPCA – NETWORK BRANDED PREPAID CARD ASSOCIATION

9:45 AM – 10:15 AM

Networking Break

10:15 AM – 11:00 AM

Track: Credit and Debit Trends View Track Consumer Switching From Credit to Debit: The Under-Reported Threat to Credit Cards

Ken Paterson, VP Research Operations, MERCATOR ADVISORY GROUP

10:15 AM – 11:00 AM

Track: Customer Loyalty View Track Loyalty Re-imagined: Using Old Principles with Cutting Edge Technology

Steve Cone, CMO, BRIERLEY&PARTNERS/AD GATEWAY

10:15 AM – 11:00 AM

Track: Emerging Payments View Track Adding Value to a Prepaid Card Program with Expedited Bill Payment

Greg Waltz, General Manager of Payment Products, MONEYGRAM

David W. Hill, Senior Product Manager, NETSPEND CORPORATION

11:05 AM – 11:50 AM

Track: Credit and Debit Trends View Track A Comprehensive Debit Strategy

Scott Qualls, SVP, Deposit Access Products, BB&T

Bob Whyte, Head of Consumer Debit Products, North America, VISA, INC.

11:05 AM – 11:50 AM

Track: Customer Loyalty View Track Loyalty at the Point of Sale through Real-time Rewards

Moderator: Jonathan Silver, President and CEO, AFFINITY SOLUTIONS

Panelist: John MacMillan, VP Product Management, COMERICA BANK

Panelist: Gerry O’Brion, VP Marketing, Red Robin Restaurants, RED ROBIN RESTAURANTS

Panelist: Jake Sterling, VP, Partnerships, MARITZ REAL-TIME REWARDS

11:05 AM – 11:50 AM

Track: Emerging Payments View Track The Hispanic Market and Prepaid Products

Alex Liu, VP, Global Prepaid Product Development, MASTERCARD WORLDWIDE

Patrick Brown, EVP, Emerging Markets, NETSPEND

11:55 AM – 12:40 PM

Track: Credit and Debit Trends View Track The Habits of the Affluent During a Time of Recovery

Ed Jay, SVP, AMERICAN EXPRESS BUSINESS INSIGHTS

11:55 AM – 12:40 PM

Track: Customer Loyalty View Track Maximizing Cardholder Loyalty and Profitability through Effective Partnership Marketing Programs

Stef Erik Anderson, First VP, Loyalty and Rewards, SUNTRUST BANKS

Sarah Arvin, EVP Product and Program Development, VESDIA CORPORATION

Evan Weisenfeld, Senior Vice President, Partner Development, UPROMISE INC.

11:55 AM – 12:40 PM

Track: Emerging Payments View Track The Prepaid Applications for Government Disbursements

Nizam Antoo, Senior Business Leader, Consumer Prepaid Products, VISA, INC.

Tracy Dangott, VP, Senior Product Manager, Public Sector Prepaid, JPMORGAN CHASE

Event Information Event: 22nd Annual Card Forum & Expo Event Dates: Sunday, 05/16/10 12:00 AM – Tuesday, 05/18/10 12:00 AM

MasterCard fights for card fee revenues-International Business-News-The Economic Times

“Now we’ve got to make sure we win the war,” McWilton said in an interview on Sunday. “We lost this battle. It’s a big battle. But the war wages on and we’ll be working really hard over the next week or so to stop this.”

via MasterCard fights for card fee revenues-International Business-News-The Economic Times.

Washington digest: Senate restricts debit card fees

WASHINGTON — In a move that could resonate at the cash register, the Senate voted last week to set limits on the fees that retailers must pay banks to process debit card transactions.

via Washington digest: Senate restricts debit card fees.

Shoppers Check Out of Stores Via Cell Phone – BusinessWeek

Card issuers also hope that handset makers will embed the RFID chips into phones, then create smartphone applications to help shoppers manage payments. “Everything you store in a leather wallet will migrate to a mobile handset,” says Barry McCarthy, a general manager at First Data, which processes transactions for 2,000 card issuers worldwide.

via Shoppers Check Out of Stores Via Cell Phone – BusinessWeek.

Retail Industry Hails Passage of Interchange Fee Amendment

[Via Progressive Grocer]

Retailers across the industry spectrum, including those in the grocery channel, applauded the Senate’s passage last week of an amendment to the pending Restoring American Financial Stability Act of 2010 (S. 3217). Sponsored by Sen. Richard Durbin (D-Ill.), the amendment, which passed by a bipartisan vote of 64 to 33, authorizes the Federal Reserve to make rules that debit interchange fees are reasonable and proportional to the actual cost incurred by payment card networks.
Additionally, the amendment enables merchants to offer discounts or incentives for customers to use competing card networks and for customers to pay by cash, check or debit card, as well as allowing retailers to choose to set a minimum or maximum amount to use a credit card. Such practices are currently prohibited under current credit card network rules.

“This is a great victory for consumers and retailers, small and large,” said John Emling, SVP for government affairs at the Arlington, Va.-based Retail Industry Leaders Association (RILA). “[T]he U.S Senate has stood up to defend consumers and retailers, small and large, protecting them from the excessive fees and anticompetitive practices imposed by big banks and credit card companies.”

The response was similar from the grocery retailing community. Food Marketing Institute president and CEO Leslie G. Sarasin called the vote “a major stride toward restoring fairness and reason to the debit card interchange fee system …. Requiring that the fees be based on the actual cost of debit card payments will generate significant savings, benefiting retailers and, ultimately, consumers.”

Sarasin further noted that “[c]ustomers will benefit, as the amendment allows retailers greater flexibility in offering them discounts for lower-cost forms of payment.

“Sen. Durbin is to be commended for his determination and leadership in support of efforts by merchants to level the playing field against the unfair and anti-competitive interchange fees and restrictive practices that have been set by the credit card networks and their largest banks,” said Tom Wenning, EVP and general counsel at the Washington-based National Grocers Association. “This is a significant win for consumers and merchants who will benefit from these reforms”

With that legislative hurdle out of the way, retailing organizations shifted their focus to getting the Restoring American Financial Stability Act of 2010 passed and signed into law, pledging to work with lawmakers toward “the creation of a truly competitive and transparent interchange fee systems,” in Sarasin’s words.

The Merchants Payments Coalition, a Washington-based group of supermarkets, drug stores, convenience stores, fuel stations, online merchants and other businesses that was formed to put an end to exorbitant credit card fees, sent a letter last week to all 100 senators urging them to vote for the bill.

“The passage of the Durbin amendment makes the financial reform bill a must-pass piece of legislation for Main Street businesses and their customers,” said Jennifer Hatcher, group VP of government relations at coalition member FMI. “We will continue to do everything we can to support financial reform and ensure the bill sees the same bipartisan backing as the amendment.”

The 10 largest banks collect over 80 percent of all interchange or swipe fees. The amendment affects banks only with $10 billion or more in assets, the coalition noted, thus exempting almost all community banks and credit unions, which combined collect just a fraction of the total interchange fees collected yearly.

via Retail Industry Hails Passage of Interchange Fee Amendment.

Greece May Take Legal Steps Against U.S. Banks for Crisis, Papandreou Says – Bloomberg

Greece is considering taking legal action against U.S. investment banks that might have contributed to the country’s debt crisis, Prime Minister George Papandreou said.

via Greece May Take Legal Steps Against U.S. Banks for Crisis, Papandreou Says – Bloomberg.

The Senate Tackles Debit Cards | Mother Jones

Hey, the good guys won a vote last night. Debit card companies charge merchants an outrageously high “interchange fee” every time you use one of their cards — a fee that’s passed directly on to you, of course — and the Senate finally decided to put a stop to it:

via The Senate Tackles Debit Cards | Mother Jones.

Credit and Debit Cards Under Pressure | www.bullfax.com

Credit and Debit Cards Under Pressure | www.bullfax.com.

VISA Makes Statement on Durbin Amendment

[via Visa Inc. Press Release]

“We are disappointed that Senator Durbin has decided to force unrelated legislation into the financial reform package at the eleventh hour without a hearing or debate.

“Thursday’s vote is another step in a lengthy legislative process. We’re hopeful that when the issue is fully reviewed by members of Congress during the next phase of negotiations, they will conclude the amendment harms consumers, credit unions and community banks and should be eliminated from the bill.

“Visa will continue to work with policymakers to educate them about this flawed legislation that imposes price controls on debit products and allows retailers to dictate which payment card is used by consumers at the point of sale.

“Debit products deliver significant incremental value over cash and check, including guaranteed payment to merchants, greater security and increased sales, all of which the Durbin amendment ignores.

“At the direction of Congress, the U.S. Government Accountability Office (GAO) has twice examined the potential impact of proposed interchange legislation, and confirmed that there is little evidence to suggest that consumers would benefit. In Australia, where price controls have been implemented, consumers have not seen a reduction in retail prices, and instead have experienced reduced consumer benefits and increased costs.

“We hope Congress sees today’s amendment for what it is – an attempt by retailers to increase their profits at the expense of consumers.”

# # #

Contact: Denise Dunckel, Visa Inc., 202.419.4113 or ddunckel@visa.com

via VISA Makes Statement on Durbin Amendment.

Senator: Debit card fees need to be more reasonable

Currently a business is charged a certain percentage for each credit or debit card swipe, however debit card transactions are less expensive to process than credit card transactions. By forcing card companies to charge less for debit card use, Durbin hopes small businesses will be able to keep more of their profits and pass savings onto consumers.

via Senator: Debit card fees need to be more reasonable.

Dollars and Sense : How the Senate is changing your debit card habits

Because interchange fees are now more regulated, their potential as a revenue stream for banks isn’t nearly so limitless. Look for banks to start levying user fees on debit card use as a way of wringing some profit out of the debit card stream.

via Dollars and Sense : How the Senate is changing your debit card habits.

Debit Fee Cut Is Rare Loss for Largest U.S. Banks – NYTimes.com

WASHINGTON — Retailers have begged Congress for years, in vain, to limit the fees they must pay to banks when customers swipe credit or debit cards. Bills never reached a vote. Amendments were left on the table. The Senate did not even grant the courtesy of a committee hearing.

via Debit Fee Cut Is Rare Loss for Largest U.S. Banks – NYTimes.com.

Visa, MasterCard Fall on Vote Curbing Debit-Card Fees (Update3) – BusinessWeek

Shares of networks and banks came under pressure last week as Senate Majority Whip Richard Durbin pushed the fee curbs. The limits may crimp revenue at Bank of America Corp., Wells Fargo & Co. and JPMorgan Chase & Co., the biggest U.S. debit-card issuers. The measure cleared the Senate because of the industry’s “terrible” attitude toward merchants, Durbin said.

via Visa, MasterCard Fall on Vote Curbing Debit-Card Fees (Update3) – BusinessWeek.