Friday, September 08, 2006
Giant Credit Card Cartels Answering Wrong Questions (WayTooHigh.com)
On the surface, recent moves by the two largest credit card associations - which influence 80% of all electronic payment transactions - might aspire to soften merchant outrage. The recent solution by the second largest card association (posting interchange fee schedules and capping gas station interchange fees) is not very complex. But, it is little more than a distraction and watered-down bandage to placate the multibillion dollar interchange war.
MasterCard Worldwide's® press release might appear to signal an attempt to resolve the merchant concerns. However, from our prospective, it looks more like their Wizard of Oz handlers are driven by unseasoned publicists and muted marketing consultants. How else can their unabashed truculence justify the latest scheme to win over merchants and cardholders?
We randomly took pictures at our local service station this morning; in no case did any fill-ups cost more than fifty-dollars. This suggests that MasterCard's® latest concession to appease merchants is in our opinion, hollow. Even Visa® has been silent on matching this unreachable cap on fees at service stations.
We just went back and saw one pump total that was $50.75; which means, soon there will be no added interchange fee on ... 75-cents, what a sport!
Last fall we were profiled by the national media, including The Orange County Register and The Washington Post to draw attention to the windfall and unjustified profiteering waged by the card associations and member banks. A year later, as gas prices are easing off, MasterCard's® solution is (in our opinion) no solution, just more smoke and mirrors.
The other announced solution is to post the interchange fee schedules on Mastercard's® website. We hope it will be as simple to understand as McDonald's® posted nutritional information, then again, how many diners at the fast food chain actually read and understand those reports?
Posted by Tales from the World of Photo Scanning at 8:15 AM