“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






Shareholders Take Visa; Banks Run With $10,000,000,000 Payday

March 19, 2008

Because the new Visa Inc. shareholders remain hypnotised by the market success of MasterCard’s IPO, here are some leading morning-after profiles about why the banks bailed on Visa, cashed out $10 billion, plus another $3 billion for litigation reserves. 

Visa is the richest IPO ever in U.S. history, but for who?

Did you know that the initial initial public offering was expected to yield only $5 billion?  And, after deducting the legal reserves, the banks and the underwriters proceeds that is about all that might be left.

“At Stake is More Than $50 Billion if the Merchants are Successful” (Legal Times)

Visa Inc. IPO Valuation – $74 a share?

“[B]anks Also Stand to Shed Some Liability” (The Charlotte Observer)

“Visa’s Lucrative House of Cards” (SF Chronicle)

Twilight Zone: The Movie, Visa and MasterCard Style


Visa Inc. IPO Largest in US History; First it was 5, then 10 and Now $18.8 Billion – That’s Some Rich Valuation Appreciation

“Significant Victory” Announced Against MasterCard by Class Plantiffs

 “Visa’s initial offering expected to fetch $5-billion

Visa’s Inc’s $10,000,000,000 Misguided Hedge From Litigation

“Visa’s IPO Use of Proceeds Plan and Interchange Overview

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

How the Fed’s $200-Billion Intervention Indirectly Boosts Visa’s IPO Valuation

“Will Visa IPO Deter Antitrust Lawsuits?” (Financial Week)

“IPO View – Visa IPO Hit by Unexpected Snag–Recession Fears” (Reuters)


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

Visa prices IPO at $44 a share, above expected range, raising a record $18 billion

March 18, 2008

The lessons of greed by leading financial institutions have not been learned – click here.   

A funny thing happened on the way to “Vegas,” for those readers of the earlier posts, including [“If We Were in Vegas, Our Wager Would Be on Visa’s IPO Not Happening,”]. 

Several weeks ago we began raising the question of whether the Visa IPO would be delayed or derailed.  After the most recent financial market earthquakes, we opined for the latter and with good reason.  We strongly felt that investors would be more risk adverse, pay closer attention to the IPO risk factors and analyze the banks’ need to bail out from Visa. 

However, the historic moves within the past 48-hours by the Federal Reserve by adding liquidity, covering the Bear Stearns takeover and announcing new protocols to lower key interest rates all helped temporarily prop up the financial markets.  Perhaps just long enough to keep the IPO window open for Visa’s thousands of member banks to run for the hills. 

WayTooHigh.com – The Credit Card Interchange Report will be closely monitoring and updating the events of the next few days and beyond.


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

Why Should The Public Bail Out Visa and the Banks?

March 17, 2008

With millions of families forced to vacate their foreclosed homes due to unchecked greed by the banks and financial institutions – dispatched from their oversight responsibilities, in just two days the public is poised to again bail out the banks.  This just hours after the Federal Reserve handed out billions in public fund to bail out Wall Street.  Now, round two. 

The banks which own Visa, the largest credit card association, are again moments away from scoring another multibillion dollar windfall.  No, they are not getting the funds by raising interchange rates – that is scheduled for April 1st. 

Instead, the pubic is lining up to hand over billions to the thousands of banks looking for their next fix.  This time, the ill-advised investors are not studying the SEC documents and catastrophic risk factors that could lead to Visa’s insolvency.  These are not our words, but Visa’s – click here.

With the record number (nearly three times the previous high) of visitors to WayTooHigh.com – The Credit Card Interchange Report, today signals a shift in philosophy.  Today, more people are being cautioned that if our merchant interchange litigation is successful, it could lead to the demise of Visa.  Or, will the Federal Reserve then step in and refund investor’s losses?

Eroding Confidence Stings Bank Shares” – IHT

Riddle: What Do Visa and MasterCard’s Interchange Fees, Photographic Film and the Yellow Page Print Directories Have in Common?

March 17, 2008

Non eco-friendly relics from last century, like photographic film and bulky Yellow Page directories, in our opinion, share something in common with Visa and MasterCard’s interchange fee structure.

Even worse, the billions of bank-mailed credit card solicitation junk-mail sent each year fill up land fills along with billions of plastic charge cards cast-away.  Whether it is Interchange fees, photographic film or Yellow Page print directories, in our opinion, they are all obsolete in today’s high-tech society.

The difference is that consumers and businesses can quickly adopt.  Most have switched from film too digital, and many are switching from print to Internet advertising [Click here for an overview of phone book giant R.H. Donnelley’s quandary].  The manufacturers adjusted too.  Many directory listing companies are offering online solutions. 

And, in our case, retailers like us modified the entire photo business model.  Entrepreneurs are switching from print Yellow Page advertising to Google and other online directory listings. For ScanMyPhotos.com, we were forced to change, and fast. AT&T Real Yellow Pages “forgot” [they literally forget] to run one of our display ads last summer in Central Orange County, California.  These are the legally contracted ads we place every year and were an essential marketing tool for us.Subsequently, in preparing for our new Blog: YellowPage the Dinosaur, we contacted several others in our industry and they share our opinion of the Yellow Page’s demise.  [website: blog.yellowdinosaur.net].As the phone stopped ringing from local customers, we were fortunate that ScanMyPhotos.com also relies on national customers, our website and Blog: Tales from the World of Photo Scanning to spark traffic and new customers.  For complete information on our quagmire see our new Blog: YellowPage the Dinosaur. Our Yellow Page story was just profiled in B to B Magazine, but we are still out the more than one-hundred thousand dollars from lost revenues . Even one of the online directory companies picked up on our predicament and has the ScanMyPhotos.com new customer profile on their site.What does this have to do with our interchange fee battle?

As technology and efficiencies caused oceanic-sized changes to the Yellow Pages and film businesses, Interchange fees continued to rise.  Interchange fees were designed to be cost-based to cover the four-party payment network when we used those antiquated manual credit card imprinters and thick stack of carbon-copy receipts.  Unlike with film and the Yellow Pages, merchants cannot easily switch to other electronic payment networks. The 80% market power exerted by Visa and MasterCard is insurmountable.

Like most merchants, doctors offices and millions of all-sized companies, we are forced to accept Visa and MasterCard – pay their non cost-based rates [$40 billion annually] and even their whimsical fee adjustments.  Another fee adjustment was recently announced, but merchants won’t know the new rates until after the Visa IPO occurs and not until the day the new rates are imposed on April 1st – April Fool’s Day. These unchallenged and unfair fees are, after all, how we got started with our antitrust litigation in the first place. [Click here to read 2005 The Wall Street Journal article by Wendy Bounds and Robin Sidel]. Back in 2005, both Visa and MasterCard collectively and “coincidentally” were united in sharing the announcement that their signature affinity cardholder interchange fees were rising. This action caused merchants to also be taken on a ride when cardholders paid with their plastic frequent-flier cards. And, they are at it again, with a planned April 1 new rate adjustment.Whether it is film or yellow page directories, we modified our business model. But, when it comes to gallant, anti-competitive, cartel price-fixing, retailers are unable to modify our practices. Photographic film’s demise caused havoc on many business. The Yellow Page ad that AT&T forgot to run for us equally had a detrimental impact.However, with Interchange fees we, like millions of other merchants are all beholden to Visa and MasterCard. The day we stop accepting Visa and MasterCard is the day we are forced to close down, yet we are forced to pay whatever rates they impose.————————————————————————————-

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