(Republished) Latest banking trick: Imprint the American Express® logo on millions of new credit cards and charge in some cases more than double current merchant interchange fees.
As co-editors of The Credit Card Interchange Report - WayTooHigh.com, we are sensitive to our parallel but indirect roles as lead plaintiffs in one of largest antitrust litigations in our nation's history. However, we have a question for Citigroup® , Bank of America® and HSBC which is shared by many retailers, consumers and the media.
We use this forum because the banks and many of their agents, including advocacy, public relations and legal firms are regular readers of The Credit Card Interchange Report - WayTooHigh.com.
Perhaps, one of them can answer this question: What are the planned interchange fees associated with the pack of new American Express® -branded cards to be introduced in 2006?
We also address this question to American Express® , where 62% of the company's revenues are derived from merchant interchange fees.
[Earlier this week, the New York financial-services company settled another class-action lawsuit over hidden foreign currency transaction fees. American Express explained that it was better to pay out $75 million and "avoid the costs and risks of prolonged litigation."]
Already faced with one of the industrialized nations highest interchange charges, U.S. retailers are aghast at the recent announcement by Citigroup® , Bank of America® and the British banking giant, HSBC Holdings Plc® . The three leading banks will soon market millions of American Express® -branded charge cards.
Will a simple change to the logo on charge cards maintain the existing way too high Visa® and MasterCard® interchange fees, or will it be even higher as retailers and consumers are forced to bare a nearly 3, 4 or 5-percent fee that is charged by American Express® ?
With ultra-competitive margins, if a retailer has a 2-3% return on investment (ROI), this means with millions of new American Express® -logoed cards that the ROI is diminished and profitability decimated.
[source: WayTooHigh.com]
