Monday, May 21, 2007

Shouldn't Technology Lower Interchange Fees? (commentary:, 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 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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