"Will That be Credit or Debit?, Credit cards are earning you rewards, Sometimes at the Expense of Retailers" (Louisiana Business Report)

"MasterCard Alters Fee Structure" (WSJ)

Robin Sidel reports in the March 1, Wall Street Journal that "in a move that is prompting an outcry from retailers, MasterCard Inc. is overhauling its merchant-fee structure in an attempt to capitalize on the increasing number of credit cards that a loaded with rewards."

Click here for WSJ link (subscription required)

[Source, via WSJ]

More Rate Increases Planned by MasterCard Worldwide® (WayTooHigh.com®)

On April 1, 2007, in yet another brazen disregard for its two core customers - retailers and consumers, MasterCard Worldwide® is preparing to raise interchange fees again, according to a report in Digital Transactions. Yes, they will lower some, but they are raising others. This time, they have posted the adjustments in a 100-page script that is sure to further galvanize even more interest in what we assert is unbridled, anti competitive price-fixing at levels our nation has never seen before. Last time, the rate schedule was just 72-pages. As an entrepreneur, ecommerce and retail business owner, we have not a clue what the new rates are. It's a bundle of confusion. At least when the US Post Office announced planned rate increases yesterday there was justification due to fuel and related costs. But, as technology continues to cut and lower costs, why is it that the member banks and MasterCard are again antagonizing its customers, especially when they are facing what might be the most costly antitrust litigation in our nation's history.

The credit card networks no longer must transfer large numbers of paper receipts and these fees are no longer cost-based, so what exactly is the justification to reap more windfall revenues?

Rather than a 100-page confusing online rate structure, a more genuine action would be to post the exact interchange fee on every credit and debit card receipt.

Click here to view the MasterCard Worldwide U.S. and Interregional Interchange Rates effective April 1, 2007.

Click here for an informational news account reported by Digital Transactions (Feb. 28, 2007).

[Source: WayTooHigh.com®, via Digital Transactions]

"Credit Cards Charge Outrageous Fees" (Congress Blog)

"Concerns Over Credit Card Fees" (CBS)

Look at What Visa® is Up to Now (WayTooHigh.com)

The organization that "has the financial support from Visa USA®, is up to new tricks. We have long followed the "grassroots" gamesmanship of the Americans for Consumer Education and Competition, but their latest scheme called StopCheckOutFees.com is more than reaching.

Although we are also quoted and named within its silly site, we are in good company. The headline: "Mega Retail Corporations are Suing to Add Check-out Fees." Our company (30 Minute Photos Etc.) certainly is not a mega-corporation, but rather an entrepreneurial ecommerce and retail business which was the first to launch the antitrust litigation against the two leading card associations and member banks. The mega-corporation is the banking industry battling us, the millions of merchants across the nation seeking to terminate the nearly $40 billion hidden tax on consumers and retailers.

The name tag printed in the photo on their website says: "Big Store Bob," but for accuracy it should say: "Big Bank Bob."

The new website almost has it right. but, rather showing a giant charge card receipt listing the total, tax and "check out fee," imagine if after the line item "total charge," if consumers and retailers saw the exact merchant interchange fee for every transaction clearly printed on every receipt.


[Source: WayTooHigh.com]

Is MasterCard's new Ad Campaign Disingenuous? (WayTooHigh.com)

Sunday evening, on the ABC-TV network , during the biggest awards show, MasterCard Worldwide® will debut a series of tv spots to showcase how fast and convenient their PayPass® cards are. But, as a retailer and ecommerce business owner, there is an even more pronounced benefit: greed. With nearly $40 billion dollars in hidden merchant interchange taxes forced on consumers and retailers in each year, there is, in our opinion, a level of misrepresentation. More important than speed and convenience are the charges levied on consumers and merchants which in most cases are invisible, even though it can range as high as 5% and more for merchant interchange fees. A more priceless spot, which would win raves from retailers is if one of the commercials presented equal time for honestly depicting the hidden costs of their payment system.

[Commentary: WayTooHigh.com]

Is MasterCard's new Ad Campaign Disengenuous? (WayTooHigh.com)

Sunday evening, on the ABC-TV network , during the biggest awards show, MasterCard Worldwide® will debut a series of tv spots to showcase how fast and convenient their PayPass® cards are. But, as a retailer and ecommerce business owner, there is an even more pronounced benefit: greed. With nearly $40 billion dollars in hidden merchant interchange taxes forced on consumers and retailers in each year, there is, in our opinion, a level of misrepresentation. More important than speed and convenience are the charges levied on consumers and merchants which in most cases are invisible, even though it can range as high as 5% and more for merchant interchange fees. A more priceless spot, which would win raves from retailers is if one of the commercials presented equal time for honestly depicting the hidden costs of their payment system.

[Commentary: WayTooHigh.com]

"EU's Kroes Underscores Plan to Investigate Visa" (via Reuters)

"Credit Card Fees Add $169 Million to Cost of Valentine's Day" (Merchants Payments Coalition)

(via PRNewswire)

WASHINGTON, Feb. 13 /PRNewswire-USNewswire/ -- Visa, MasterCard andtheir affiliated banks will receive a one-day Valentine gift of $169 million this year because of hidden "interchange" fees collected on transactions during the holiday, the Merchants Payments Coalition (MPC) said today.

"Visa and MasterCard are plucking a few petals off every rose this Valentine's Day," MPC Chairman Mallory Duncan said. "Whether it's a bouquet of flowers, a box of chocolates or a diamond ring, credit card companiesare seeing a windfall because of their secret interchange fees that driveup the price of virtually every product in virtually every store. In an atmosphere of romance, interchange is a love-hate relationship -- Visa and MasterCard love to charge these fees and consumers hate to pay them."

Largely unknown to most consumers, interchange is a percentage of each transaction that Visa and MasterCard collect from retailers every time a credit or debit card is used to pay for a purchase. The fee varies with type of merchant, transaction and card, but averages close to 2 percent formost credit card and signature debit transactions. Visa and MasterCard interchange fees totaled $30.7 billion in 2005, up 17 percent from 2004 and 85 percent since 2001. The average family in the U.S. pays more than $300 every year in hidden interchange fees.

Valentine's Day spending is expected to total $16.9 billion this year, according to the National Retail Federation. Credit cards typically account for about half of consumer transactions, so at 2 percent that amounts to$169 million, according to MPC calculations.

Unlike other fees that show up on cardholders' monthly statements, interchange fees are not disclosed to consumers. Visa and MasterCard's non-negotiable contracts effectively require merchants to include the fees in the price of merchandise, forbid them from being shown on cash register receipts and effectively bar cash discounts. A recent MPC poll found that 68 percent of consumers surveyed had never heard of interchange, but 94 percent thought the fees should be disclosed and 91 percent felt Congress should require disclosure from the card companies."

The Merchants Payments Coalition, a group of nearly 30 associations representing retailers, supermarkets, drug stores, convenience stores, fuel stations, on-line merchants and other businesses that accept debit and credit cards, is fighting for a more competitive and transparent card system that works better for consumers and merchants alike. The coalition's member associations collectively represent about 2.7 million stores withapproximately 50 million employees.

For further information, please visit unfaircreditcardfees.com

"OFT to Expand Plastic Card Charges Probe" (via Reuters)

"U.S. Adults Say Visa and MasterCard Should Disclose Hidden Interchange Fees" (MPC)

Poll Finds 9 of 10 Consumers Want Congress to Require More Disclosure

WASHINGTON, D.C. February 6, 2007 – Consumers overwhelmingly believe that Visa and MasterCard should disclose the $30 billion in hidden “interchange” fees they charge each year and consumers want Congress to do something about it, according to a new poll released today by the Merchants Payments Coalition (MPC) that was conducted by Harris Interactive®.

“The way credit card companies hide interchange fees is indefensible,” said Mallory Duncan, senior vice president and general counsel at the National Retail Federation and chairman of the MPC. “Interchange fees add up to twice what consumers pay in late fees but they’re kept secret and never disclosed to consumers. Consumers want that to end. They want to know how much they’re paying.

”Nine out of 10 U.S. adults believe credit card companies should disclose how much they charge in interchange fees and how those fees are set. Consumers also want Congress to require credit card companies to be more forthcoming about their policies and practices.

The poll found the following results:94 percent said credit card companies should be required to disclose to consumers the amount of interchange fees they charge.

• 93 percent said credit card companies should be required to inform consumers how interchange fees are set.
• 91 percent said Congress should require credit card companies to be more open about their policies and practices regarding interchange fees.
• 91 percent disagreed that credit card companies should be allowed to set interchange fees without notification to consumers.
• 83 percent disagreed that credit card companies should be allowed to continue to charge interchange without change to their current policy.

Interchange is a percentage of each transaction that Visa and MasterCard collect from retailers every time a credit or debit card is used to pay for a purchase. The fee varies with type of merchant, transaction and card, but averages close to 2 percent for most credit card and signature debit transactions.

According to MPC, Visa and MasterCard interchange fees totaled $30.7 billion in 2005, up 17 percent over 2004 and an 85 percent increase since 2001. The average family in the U.S. pays more than $300 each year in hidden interchange fees.

Unlike other fees that appear on the cardholder’s monthly statement, credit card company rules make it virtually impossible to inform consumers how much they are paying in interchange fees. The Harris Interactive survey found that 68 percent of U.S. adults had never heard of the interchange fee.

Release of the poll comes as interest in the interchange issue is growing in Congress. Senate Banking, Housing and Urban Affairs Committee Chairman Christopher Dodd, D-Conn., said last month that he plans to hold a hearing on interchange as part of a series of hearings looking into credit card industry practices. The Senate Judiciary Committee and a House Energy and Commerce Committee subcommittee held interchange hearings last year.

About the survey

This survey was conducted online within the United States by Harris Interactive via its QuickQuerySM online omnibus service on behalf of The Merchants Payments Coalition between January 16-18, 2007 among 2,214 adults (aged 18 and over). Figures for region, age within gender, education, household income and race/ethnicity were weighted where necessary to bring them into line with their actual proportions in the population. Propensity score weighting was also used to adjust for respondents’ propensity to be online.

With a pure probability sample of 2,214 one could say with a ninety-five percent probability that the overall results would have a sampling error of +/- 3 percentage points. Sampling error for data based on sub-samples would be higher and may vary. However, that does not take other sources of error into account. This online survey is not based on a probability sample and therefore no theoretical sampling error can be calculated. The full results of the poll can be found at unfaircreditcardfees.com

The MPC, a group of nearly 30 associations representing retailers, supermarkets, drug stores, convenience stores, fuel stations, on-line merchants and other businesses that accept debit and credit cards are fighting for a more competitive and transparent card system that works better for consumers and merchants alike. The coalition’s member associations collectively represent about 2.7 million stores with approximately 50 million employees. For further information, please visit unfaircreditcardfees.com

About Harris Interactive®

Harris Interactive is the 12th largest and fastest-growing market research firm in the world. The company provides innovative research, insights and strategic advice to help its clients make more confident decisions which lead to measurable and enduring improvements in performance. Harris Interactive is widely known for The Harris Poll, one of the longest running, independent opinion polls and for pioneering online market research methods. The company has built what it believes to be the world’s largest panel of survey respondents, the Harris Poll Online. Harris Interactive serves clients worldwide through its United States, Europe and Asia offices, its wholly-owned subsidiary Novatris in France and through a global network of independent market research firms. The service bureau, HISB, provides its market research industry clients with mixed-mode data collection, panel development services as well as syndicated and tracking research consultation. More information about Harris Interactive may be obtained at harrisinteractive.com.

The MPC, a group of nearly 30 associations representing retailers, supermarkets, drug stores, convenience stores, fuel stations, on-line merchants and other businesses that accept debit and credit cards are fighting for a more competitive and transparent card system that works better for consumers and merchants alike. The coalition’s member associations collectively represent about 2.7 million stores with approximately 50 million employees. For further information, please visit unfaircreditcardfees.com.

[Source: MPC]

"Unintended Consequences" (Digital Transactions, Feb, 2007)

Click here to view the February edition of Digital Transactions Magazine. Good overview on the interchange issues. Within the article, in what could easily have been a dyslexic-type comment, it was reported that the [card associations] are looking for ways to add value for the merchant.” We cannot help but adjust that quote to a more accurate representation by suggesting that the card associations are looking for ways to add value from the merchants.

Pages of interest are within the February edition are:

• Page 6 - Stewart, editor-in-chiefs commentary on merchants and interchange fees.
• Page 14 - Jane Adler reports on "Unintended Consequences"

[Source: Via "Digital Transactions"]

"EU: Europeans 'Ripped Off' by Too High Banking, Card Costs" (AP, via IHT)

"American Merchants Welcome Today's EU Report Calling for Closer Scrutiny of Interchange Fees" (MPC)

WASHINGTON, Jan. 31 - The Merchants Payments Coalition (MPC), an organization representing retailers, online merchants, and other businesses that accept credit and debit cards, welcomed today's release of a European Union (EU) policy report that calls for closer scrutiny of competition in the European retail banking sector.

The European Competition Commission report expressed concern about a number of practices the Commission believes could limit competition in the credit card business. Among the practices that worry the Commission is the "interchange fee" that banks and credit card companies charge merchants every time a credit or debit card is used to make a purchase.

"The EU Commission's conclusion that interchange fees should be the subject of further antitrust inquiries is a big win for the European merchants and consumers who are still forced to pay these hidden fees," said Mallory Duncan, chairman of the MPC and senior vice president and general counsel at the National Retail Federation. "The card companies set their fees in secret and won't even allow merchants to disclose them to consumers. Both here and in Europe, interchange remains the biggest fee consumers have never heard of," Duncan added.

The Commission report calls for closer examination and continued scrutiny of interchange fees to make sure that they are transparent and set fairly "as a result of competitive outcome."

"It is clear that the present level of interchange fees in many of the schemes we have examined does not seem justified," European Commissioner for Competition Policy Neelie Kroes said after releasing the report. "Customers already pay the cost of interchange fees, since retailers pass them on in higher retail prices, paid not only by card users but also by customers paying cash. So reducing these fees would, on balance, benefit consumers." Kroes added.

Interchange fees vary with type of merchant, transaction and card, but average close to two percent for most credit card transactions. In the United States, interchange fees totaled $30.7 billion in 2005, up 17 percent from 2004 and 85 percent since 2001.

European merchants groups have expressed concern that their expenses will increase significantly if Visa and MasterCard are allowed to charge interchange fees the same way they do in the United States. According to MPC chairman Duncan, "Europeans may disagree about a lot of things, but they appear united in their opposition to hidden interchange fees."

In the United States, Visa and MasterCard are already facing antitrust litigation arising from the way they set interchange fees. In 2006 the Senate Judiciary Committee held a hearing on interchange fees and Senate Banking Committee Chairman Chris Dodd (D-CT) has announced plans to do the same.

The MPC, a group of nearly 30 associations representing retailers, supermarkets, drug stores, convenience stores, fuel stations, on-line merchants and other businesses that accept debit and credit cards are fighting for a more competitive and transparent card system that works better for consumers and merchants alike. The coalition's member associations collectively represent about 2.7 million stores with approximately 50 million employees.

For further information, please visit unfaircreditcardfees.com

[Source: PR Newswire via Merchants Payments Coalition]