Visa’s Strategy in Debit Cards Stymied Rivals (NYT)

January 4, 2010

Watch this Andrew Martin reported New York Times produced video about Visa and MasterCard merchant interchange fees. Profile and article includes Mitch Goldstone, president & CEO, ScanMyPhotos.com

Click here to read article

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More on Visa Inc.

November 21, 2008

Form 10-K for VISA INC.

  • Visa says might incur “significant” charges in FY09
  • The Credit Card Fee That Will Fleece You

  • How Visa and MasterCard Discriminate Against Millions of Merchants

    July 7, 2008
    As MasterCard provides an interchange fee limit of $50.00 for service station gasoline fill ups, the question is whether this is just for debit cards, or also for credit card transactions? Then, with many card limits of about $75.00, are motorist forced to resubmit their card to top off their tank and thus ring up even greater interchange fees? As for Visa, will they also be imposing an interchange fee limit on credit cards too?

    While pleased to see that Visa and MasterCard are reacting to merchant revolts against the two giant card associations, it was especially consoling to notice that the Visa debit card limit was announced just hours after our planned rally against them. Nice timing, Visa!

    The problem is that restructuring only a few interchange fees provokes even more questions. There are millions of retailers coerced to pay these supra competitive fees, yet the only relief now are for service stations, and for only gasoline purchases. What about our ScanMyPhotos.com and the millions of other retailers? We all want relief and if Visa and MasterCard can limit fees at the pumps, why not everywhere? The answer to this rhetorical question is that they are giant cartels that have a monology and can do whatever they want…. until now.

    The interchange fee limits at the pumps do not address the issues of other skyrocketing inflationary costs on other products and services.

     


    Two Chinese Companies [Government] Bails Out The Banks Through Visa Inc. Shell Game

    April 6, 2008
    If you watched 60 Minutes on Sunday evening, you heard a frightening scenario that the Chinese government might be gaining unreasonable power, influence and control of U.S. businesses, especially in the financial services sector.
    According to the Teshreen Press and Publishing Foundation, two Chinese nationals now own ~$400,000,000 in Visa, Inc., which means that those two recent checks totaling nearly 1/2 billion dollars to the banks – which owned the giant credit card processing cartel – was paid off by China.  This raises so many concerns, from attention towards Visa’s Olympic sponsorship, how interchange merchant fees are structured in China, to questions of whether Visa and its member banks might gang up with China to wound the sovereignty of Taiwan?
    We wonder whether Visa Inc cardholders understand these ramifications and the Chinese connection?
    • China Life purchased nearly ~300 million dollars in Visa Inc.
    • China’s Sovereign Wealth Fund also bought ~$100 million dollars in Visa Inc.

    Click here for more information.

    [NEWS UPDATE: Olympic Torch Snuffed Out In Paris]

     


    “Visa’s IPO Is Worth a Close Reading” (via WSJ)

    March 22, 2008

    Herb Greenberg reports in The Wall Street Journal on March 22 [Page A11, subscription required] on what we have long been mentioning – The Visa IPO risk factors. 

    Unfortunately, it wasn’t until after the drunken jubilation subsided that investors are beginning to understand what is at stake.  We posted the Visa Inc. SEC filing and risk factors on Dec 22.  Why was the media as negligent as investment advisers and underwriters in better not explaining the facts behind the largest IPO in our nation’s history?  Was it greed, or the rush to get the deal done at all costs.  Now that the party is over and that window of opportunity to complete the IPO is sealed, sobriety comes in a few weeks, when the billions in Federal Reserve loans are called.   

    Click here to read the Herb Greenberg WSJ article.

    Excerpts:

    • Investors generally overlook “risk factors,” as they are called. These can be found in all IPO prospectuses and 10-K annual reports filed with the Securities and Exchange Commission. This is where the company is supposed to bend over backwards to tell you where the booby traps might be.”
    • Much of it is boilerplate, but Visa’s warnings go beyond mere boilerplate to some specific issues that could very well spook investors if and when they ever make it into the headlines.  Consider, for example, that the first eight pages of its risk factors are devoted to legal and regulatory matters. Most companies usually start with business risks, but with Visa — and MasterCard — the lawyers (and some politicians) have had a field day.  Perhaps the stickiest concern has to do with lawsuits, as Visa puts it, over the amount of money the credit-card companies charge merchants.”

  • Visa Inc. Files 10-K Annual Report, Amends S-1 Registration
    key point: “Failure to successfully defend or settle the interchange litigation would result in liability that to the extent not covered by our retrospective responsibility plan could have a material adverse effect on our results of operations, financial condition and cash flows, or, in certain circumstances, even cause us to become insolvent.” 
  •  Want to know more about lead plaintiff ScanMyPhotos.com?  Click here and read their daily blog: Tales from the World of Photo Scanning



    A Look into Visa’s Trojan Horse IPO Scheme

    February 26, 2008

    Today, a reporter suggested we should be happy that Visa Inc. is setting aside a $3 billion reserve for our litigation. No, not really.

    The credit card giant is playing an unfriendly game in its pursuit of detachment from their legal liability for illegal price-fixing by agreement.  If you step back and read several of our preceding comments, you will notice that when first announced, many hinted that Visa Inc. could anticipate raising $5 billion, then it was $10 billion. Now, it is nearly $19 billion. 

    Was this caused by unearthly market conditions, inflation or because they were simply padding the amount of money they hope to raise to cover their legal liabilities?The worry is that they could simply use investor proceeds to fund settlement of our litigation and then continue raising merchant interchange rates to more than cover the lost revenues. To us, that is as unfair as are their interchange fees.A review of the earlier credit card litigation identifies that for merchants and consumers, the fair market economy is still broken and there still is no real electronic payment competition. Visa and MasterCard’s cartel-like pricing structure still precludes a real resolution to interchange fees. From the preceding resolution, Visa and MasterCard simply raised other rates to adjust for their penalties, thus more than paying for their fines.

      

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