Monday, May 21, 2007

Shouldn't Technology Lower Interchange Fees? (commentary: WayTooHigh.com)

ScanMyPhotos.com, a division of 30 Minute Photos Etc. is profiled in two more leading national magazines [Reader's Digest, June issue. page 197; Women's Health Magazine, June issue. page 56].

What does this have to do with the multi billion dollar antitrust merchant interchange litigation?

Quite a bit.

As technology advances, the costs are supposed to decline; this is further explained by Moore's Law. For us, we invented an entirely new business model that is being followed throughout the photo imaging industry. Rather than charging $5.00 to scan a single picture, we charge just 5-cents for scanning 1,000 photos, or $100 to scan upwards of 1,600 4x6" photos when you fill up our prepaid ScanMyPhotos.com box. But, when it comes to the credit card associations, they allegedly practice anti competitive price-fixing by agreement which is illegal, but helps artifically raise their fees, rather. Think of the old manual credit card imprinters and multi-carbon-copy forms which had to be manually processed, mailed out of state and cleared - that is what the cost-based interchange fees were designed for.

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[Source -commentary: WayTooHigh.com]