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

July 18, 2008

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

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

Click here to read the article.

[source: The Washington Post]

Noise from the American Bankers Association

June 25, 2008


The American Bankers Association does it again. What a surprise that they issue a press release regarding a recent comment regarding the Credit Card Fair Fee Act.  What is purely stunning is that the bank trade association could even suggest that the consumer friendly legislation is “plainly anti-competitive and would violate fundamental antitrust principles.”  Have they no shame?

Visa and MasterCard with its 80% mammoth market power and well documented anti-competitive practices [See prior ~1200 posts below] is the reason millions of merchants are involved with our class-action litigation. 

Shortly, when you do an online dictionary search under the term “antitrust,” Visa and MasterCard will be used as the model for why the named worldwide defendants conspired to illegally fix prices and force merchants to pay supra-competitive Interchange fees.  Their actions are the reason we have the protections of the Sherman Antitrust Act.

While the Banks’ trade association’s president, Edward Yingling, said “this legislation will hurt competition and harm consumers, plain and simple,” he is wrong.  Competition is non-existent and millions of retailers and consumers worldwide are harmed every day due to the card associations unbridled greed.  

Did MasterCard and Visa just give American Express about $4.0 billion dollars to settle the prior antitrust suit [read more] because they are nice guys, or because they violated the law?  I look forward to an apology and recognition from the ABA that they were wrong.

Arguments and press releases like theirs is silly.  Ex: “The fact is the card payment system brings considerable benefits to all parties to a transaction,” said Yingling.  This might have been the same argument the railroads used in the 1800s when they forced farmers to either transport their goods via trains or let it rot.  That is also the reason the Sherman Antitrust Act was enacted.  Merchants like us [ScanMyPhotos.com] are forced to accept Visa and MasterCard or we will be out of business, just as the farmers were when they were forced to use the railroad network, as merchants are today forced to use the electronic payment network.  Differing networks, same violations.

If the ABA was representing consumers and retailers, rather than financial institutions, they would understand the facts, rather than parrot the replies from high-powered legal teams.

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

May 12, 2008

WayTooHigh.com – The Credit Card Interchange Report Comments:

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

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

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

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



This is the “perfect storm.” 

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

Understanding the Word “Insolvency” Is Crystal Clear

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


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





“MasterCard Statement on the Credit Card Fair Fee Act of 2008” (via MasterCard press release)

March 8, 2008

[Click here to view MasterCard Worldwide press release.  Reprinted in its entirety].

Purchase, NY, March 06, 2008The electronic payments system benefits merchants and consumers because it is a highly efficient and secure way to increase sales and consumer satisfaction. The system was developed in the highly competitive marketplace of merchants, banks, payment networks and consumers. This legislation is an attempt by merchants and the Merchants Payments Coalition to put in place price controls, which will harm competition and the card products and services offered to consumers.

MasterCard believes there is no need for government intervention, and that it would be inappropriate for the U.S. government to set prices and negotiate the terms of contracts for private commercial entities. Such policy decisions in the past have proven to be unworkable, unpopular and detrimental to the free market economy. There is no evidence that demonstrates that such price controls will result in savings passed along to consumers. To the contrary, we believe such moves negatively impact consumer choice.

We will continue to work with our customers and other industry organizations, like the Electronic Payments Coalition, American Bankers Association, National Association of Federal Credit Unions, Independent Community Bankers of America, and the American Financial Services Association, to help members of Congress enhance their understanding of how interchange brings benefits to millions of consumers and merchants around the world.

For more information on Interchange, go to: http://www.mastercard.com/us/company/en/ourcompany/interchange.html