Both Credit And Debit Rise for Visa, Along with Acquirer Fees

April 29, 2010

San Francisco-based Visa instituted an acquirer price increase last year (Digital Transactions News, March 17, 2009). In a conference call with analysts, Visa chief financial officer Byron H. Pollitt Jr. attributed the data-processing revenue growth to VisaNet’s 14% transaction increase and “the continuing effect of previously enacted pricing actions,” according to the Seeking Alpha transcript service.

It looks like another “pricing action” is on the way. Referring to an April price increase by MasterCard Inc., an analyst asked Visa executives if “you have raised merchant assessment pricing as well?” According to Seeking Alpha, chief executive Joseph W. Saunders responded, “Well, we’ve already announced an increase in our acquirers fees similar to the one that MasterCard did and ours is effective in July.” A Visa spokesperson declined further comment. As they do with interchange, acquirers are likely to pass on such network fee increases to their merchant clients.

via Digital Transactions: Both Credit And Debit Rise for Visa, Along with Acquirer Fees

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Visa IPO Derailed, Suggests Mitch Goldstone

March 17, 2008

[March 18, 2008, update:  Visa prices IPO at $44 a share, above expected range, raising a record $18 billion]

With thirty-minutes until the U.S. financial markets open, Mitch Goldstone, co-editor of – The Credit Card Interchange Report is making the call that this week’s planned multi-billion dollar exit parachute for  thousands of banks which own the giant credit card association will fizzle.  The Visa IPO was planned as the nation’s most ambitious public offering, yet Visa Inc. is also facing the largest antitrust litigation too, one which in their own words could cause the credit card processing firm to become insolvent if we are successful.

This should now come as no surprise, especially after former Fed Chairman, Alan Greenspan described the financial mess as being the worst since WWII: “Greenspan Worns of Worst Crisis Since 1945.”

Obviously, the banks think differently, especially JP Morgan Chase, which is much more than a lead underwriter.  Did you know that they are also a primary investor in Visa Inc and own one of the largest Visa and MasterCard electronic payment processors, Chase Paymentech?

“I had more than a feeling that the IPO was dead on arrival several weeks ago and have been calling attention to the reasons ever since,” said Goldstone, who is lead plaintiff in the merchant interchange class-action against Visa, MasterCard and major banks.  On March 1st,, which has been chronicling the interchange battle with daily news and commentary updates since early 2005, had this posting:  Why the Visa Inc. IPO Might be Delayed for Shelved?   Several other similar commentaries were subsequently published by 

“Although there have been no other public reports which we read suggesting Visa Inc. might delay or cancel its IPO, we are not surprised.  After all, the banks were equally in the dark when it came to not protecting themselves and shareholders by acting to thwart the sub-prime mortgage meltdown and other costly missteps,” said Goldstone.

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Fed Cuts Interest Rates .75%; Why Don’t Banks Cut Interchange Fees Too?

January 22, 2008

Due to the global financial crisis of confidence, if the Federal Reserve can implement such fast-action by slashing key interest rates by .75%, why aren’t MasterCard and Visa’s member banks also at the same table, helping to soften the economic chasm? 

Interchange fees – a relic pricing schemed from decades ago – account for nearly $40 billion in hidden charges each year.  It is based on an antiquated system designed decades ago to cover a four-party payment system.  If the Federal Reserve has no fees to clear checks, why are Visa and MasterCard’s network able to charge so much? 

Today, the entire electronic payment network is seamless, automated and highly advanced.  Think of the Internet network as a model for efficiency.  There are few manual credit card imprinters today, instead, it is mostly automated and efficient, yet the fees are anything but modern.  With today’s emergency market conditions, if the electronic payment system were to be altered, think of the immediate cash infusion that consumers and merchants would have, rather than the banks, which as we know are facing management quagmire, as they continue to report billions in write-offs and steep revenue declines.