Saturday, March 17, 2007

Thursday, March 15, 2007

"Visa Hikes Merchant Fees on High-Limit Card" (via BankNet 360)

According to BankNet 360, "merchants will pay an average of 14% more per transaction when customers use their new Signature Preferred Visa card. Visa USA Inc. said next month it will start issuing the high-end plastic line to its 'bigger spenders,' those who charge more than $50,000 a year... The hike is likely to exacerbate tension between the card industry and retail merchants who say they already pay too much in interchange fees." Commentary: More fee increases? As lead plaintiff in what is one of nation's largest antitrust litigation's, we thought the card associations and its member banks would temper their allegedly brazen anticompetitive illegal price fixing, but apparently not. Rates keep rising, while other technologies keep lowering their fees.

Two recent national newspaper's (WSJ and USA Today) recently profiled our use of technology to increase efficiencies and lower prices. Even one of our vendors just switched from thick, carbon-copy service reports to smart, single page electronic forms which cut costs and enhanced efficiencies. Another example: a study of the cost of one TeraByte of storage; it cost a whopping $1 million in 1992. Within one year, the cost was cut in half to $550,000. By 1997, it was $50,000 and in 2,000 the cost was $8,500. This year, a consumer can easily buy one TeraByte of storage for $130. From $1 million to $130 in just over a decade. Now look at merchant fees; since 1999 the interchange fees for debit cards have risen about 300%.

[Source: via BankNet 360, subscription required]

Monday, March 12, 2007

Credit Card Industry Takes Its Licks" (

Sunday, March 11, 2007

"Credit Card Industry Takes Its Licks" (

"Cashless Society by 2012, says Visa Chief" (The Independent)

Friday, March 09, 2007

"Card Firms Confess to Collusion" (The Korea Times

Thursday, March 08, 2007

30 Minute Photos Etc. [] USA Today profile (

"Merchants Protect Against Interchange Fees (RNCOS)

Monday, March 05, 2007

Interchange Fee Justification (

Years ago, when merchant interchange fees were purely cost-based, there was a level of understanding about the costs associated with the charges. However, we keep noticing new adventures in unwarranted fee increases; most recently MasterCard Worldwide's® planned fee increases.

Do you remember when you were first issued a credit card? Seemingly, the expiration date was within 12-months, or within a very brief period. The banks which controlled the card association's would be forced to regularly reissue the cards. There were all types of fulfillment and processing fees associated with the card renewals. However, at technology advanced, the banks were able to cut costs by issuing cards with expiration dates lasting longer than many relationships. Years ago, retailers were provided with thick books listing each unauthorized card. Imagine having to manually pause to track whether a card was not to be processed. Today it is instant and all electronic, yet the fees continue to increase. Didn't it cost a great deal of money to publish and mail out those weekly unacceptable card reports?

Our retail and ecommerce business regularly receives cards that actually expire in 2011 - four years from today. Think of the implied cost savings that should bring down the merchant interchange fees, as fewer costs are incurred by issuing cards with such distant expiration dates.

Justifying interchange fees and its associated increases are becoming more magical and creative with each passing day.