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