Wednesday, June 27, 2007

"Credit Card Issuers Brace For Fees Cut" (

"He's Out Of Gas" (Kennebec Journal)

Tuesday, June 26, 2007

"Credit Card Interchange Fees" (Beyond The Consumer)

Monday, June 25, 2007

"Investigating the Payments System" (Mail & Guardian)

Friday, June 22, 2007

"Visa Reveals Plan to Restructure for IPO" (via AP)

If you thought that the "Risk Factors" that MasterCard® described during its IPO filing was frightening, just wait for Vias's® list of reasons to get worried too. As reported today by AP, "The offering will also help insulate member banks from billions of dollars in potential legal damages from antitrust claims brought by merchants".

Just as with MasterCard, Visa too can try to pawn off its legal liabilities onto others, but its prior alleged antitrust violations and legal obligations do not evaporate by selling shares to the public.

Reuters is reporting that "the filing shows that Visa USA members will assume responsibility for a variety of litigation, including antitrust lawsuits in which merchants are accusing Visa and MasterCard of price-fixing.... Visa intends the IPO to fund expansion and help pay potentially heavy legal bills."

These prior postings help explain why, in our opinion, the transferring of ownership does nothing to dissolve their prior damages.

But, the Alleged Crimes Have Already Been Committed (

Visa's® Planned Restructuring Sounds Like Musical Chairs (commentary:

MasterCard's® Legal Bill Could Be $26 Bln (from report in CardLine)

Largest Planned IPO Since Google has No Safety Net (

MasterCard Inc®. IPO, "The Ultimate Hedge Against Litigation" (

Will "Risk Factors" Doom MasterCard's® IPO? (

"MasterCard's® Legal and Regulatory Risks Threaten ... Its Entire Business Model" (BW)

Banks Set to Bolt From MasterCard Inc.® on May 22 (

[source:, with link to AP]

Saturday, June 16, 2007

"Internet Sales in 'Dramatic' Slowdown", Reports the NYT's (Commentary:

According to Sunday's New York Times, reporters Matt Richtel and Bob Tedeschim (June 17) have a high-profile front page story explaining that the decades' "hypergrowth" of ecommerce purchasing has realized a "dramatic" slowdown. The article, however, does not profile highly innovative companies, such as, which created an entirely new business model for super-speedy high-speed photo scanning. But, the story does raise questions that if ecommerce business is slowing, what does that mean for the two leading credit card associations? With nearly all ecommerce and online business beholdened to electronic payments, if there is a significant slowdown from other sectors, what impact will that have on companies like Visa® and MasterCard®. If there is a slowdown, will they simply wield their (and its member banks) unbridled market power to raise interchange fees again to counter any adverse effects to its revenue stream? is owned by 30 Minute Photos Etc., the lead plaintiff in the merchant interchange litigation against Visa, MasterCard and its member banks.

[Commentary:, via NYT's article]

Thursday, June 14, 2007

"Interchange Under Attack" (Green Sheet)

Sunday, June 10, 2007

"Maxed Out": The Movie (Click here to view trailer)

Excerpt from the 2005 film documentary, "Maxed Out," via Moviefone. Click here for link to "Maxed Out" website.

'Maxed Out' takes viewers on a journey deep inside the American style of debt, where things seem fine as long as the minimum monthly payment arrives on time. With coverage that spans from small American towns all the way to the White House, the film shows how the modern financial industry really works, explains the true definition of "preferred customer" and tells us why the poor are getting poorer while the rich keep getting richer. Hilarious, shocking and incisive, 'Maxed Out' paints a picture of a national nightmare which is all too real for most of us."

[Source: Moviefone - available on DVD]

"Credit Card Interchange Fee Outrageous" (The Birmingham News)

Friday, June 08, 2007

Jim Cramer on MasterCard® (Commentary,

Earlier this week on TV, Jim Cramer, the television personality and host of CNBC's Mad Money, might not have realized that his comments actually are in support of retailers and consumers, rather than just more bushish banter for the second largest credit card association.

The merchant-discount antitrust litigation relates to illegal price-fixing. In our opinion, Mr. Cramer effectively supports this allegation by explaining that MasterCard® can raise fees and regularly raises fees, rather than cutting it. Hear it in his own words - click here. And, that is the point, as explained by Mr. Cramer, that MasterCard can raise fees and always raises fees. When you have a growing market and market power, you have the ability to raise fees and can raise fees. Wall Street and MasterCard certainly likes this model, but its customers (cardholders and retailers) are dismayed.

What other cartel do you know which regularly raises fees? Hint: when you use your payment card at the gas station, with every tank fill-up, the windfall profiteering by the merchant interchange fees can be upwards of $2.00 or more.


Monday, June 04, 2007

Anatomy of a Gift Card (Commentary,

Next time you are at the supermarket, reach into your pocket and grab a few coins, or bring along an entire jar of saved change, because quickly counting your money is now easy and super convenient. Even if it is only one-dollar, use a Coinstar coin counting kiosk.

There is a 9% transaction fee [8.9-cents for each dollar]. But, if you choose to order an instant gift card from retailers such as Starbucks, there is no fee or interchange charge. A minute later, your Starbucks-branded gift card is ready for use.

Earlier today, I noticed several consumers charge their lattes on a credit card. What must the added interchange fees be, especially on such a tiny transaction? But, if you use the Starbucks-branded gift card, the interchange fee is zero. Even if you just use it to buy a newspaper. Nonetheless when you choose a bank electronic payment card, where the bank issuer and acquirer could often be the same entity, they are effectively, double billing the merchant, because the fee is the same even if just one bank is handing the entire transaction.