Wednesday, October 31, 2007

Crude Oil Nearly Doubled Since February (

Back in February, when we thought $50.00 a barrel crude oil was too much, the banks were reaping huge windfalls from their merchant interchange fees. But now. Now, with gas nearly 100% higher - in just eight months, think of the shared gouging that is being practiced by the financial institutions. What other business can demand a nearly 100% price increase and in a matter of a few months? We are talking billions of dollars, but the banks and their market power are remaining silent on how they can justify these fees.

"$105 a Barrel" Would Mean More Windfall Profits for Credit Card Companies ( (Originally posted on May 26, 2006)


Repost: Printing The Exact Interchange Fee on Every Electronic Charge Receipt (

Printing Exact Merchant Interchange Fee on Charge Receipts by Thanksgiving (

Seventy-two pages, five-pages or one line? (

Why not post exact interchange fee on receipts? (

Every credit and debit card receipt should include interchange charge (

MasterCard® interchange rate schedules on website (via PRNewswire)

On a Personal Note, Today, [30 Minute Photos Etc.] was Profiled in USA Today (Click here to read)

What's Higher: Gas Prices or MasterCard's® Market Capitalization? (

With gas prices nearing $100.00 a barrel and MasterCard's® stock price soaring towards $200.00 a share, we cannot help but draw a comparison. More motorists are paying with plastic because they simply do not have enough money in their wallets. The windfall earnings to the banks with still own a hefty percent of the world's second largest payment network continues to rise.

In May, 2006, Forbes' Liz Moyer wrote an article about MasterCard's pending IPO, and questioned, "How priceless is this IPO?" Click here to read. Moyer's was questioning the risk factors to the card association and its investors due to its "considerable litigation risks." As the lead plaintiff in this antitrust case, we haven't seen a significant change of direction and the case continues. So, why exactly is MasterCard a buy at $190.00, when within its SEC offering documents they, like Visa has too, explained that my victory could lead to the company's insolvency. Perhaps, the only thing that has changed are investor's memories of this case. With nearly 800 below news and commentary updates, there is a wealth of reasons to be even more worried than was Forbes' reporter.


Monday, October 29, 2007

Visa's® 'Anti-Gay' TV Commercial Is Offensive On Many Levels (

Click here to view the YouTube-linked commercial.

Click here for an overview of the spot.

Click here to view other "Life Takes Visa®" spots.

Click here to read how Visa describes it in their online press release.

There are a series of similar Visa USA ads which depict the mental damage inflicted when consumers pay with paper rather than plastic. One spot shows a man buying a donut with cash, while a line of hungry people flash that same stymied look that an overwhelmed mom gives her kids when they start shouting in a supermarket. The message is "Life Takes Visa," but the reality is that if the donut shop is anything like the one next door to our Irvine, CA retail location, the owner is paying a hefty price when people use a credit card - especially a signature affinity card that come with even higher merchant rates. The fact is, with minimum payments, that donut shop owner may have just paid out more in interchange fees than the cost of the donut.

According to Mitch Goldstone, president and CEO of and 30 Minute Photos Etc., "the Visa's® gang of advertising handlers presented inflammatory, anti-gay stereotypes in it's new kick-off to the 2007 NFL season with its 'When the Saints Go Marching In' TV commercial." Goldstone, who along with his partner, Carl Berman, are also the lead plaintiff's in the multi-billion dollar merchant interchange antitrust litigation and explained that another worrisome image from the commercial that also impacts all retailers is the new message that cash is bad.

The TV ad, airing during football games depicts how easy and fun it is to use your Visa payment cards to buy products, but when a preppy-looking man, in a pink shirt and sweater delicately wrapped around his neck becomes the standout, lone customer using cash, everything stops. It doesn't show how frustrated clerks get when the electronic payment network is slow or when the magnetic strip on the back of a credit card is worn, and thus requiring manual account number entry, which is one of the nearly one-hundred separate and higher interchange fees imposed on retailers.

In the TV spot, the cash-paying customer became the protagonist and tool for Visa's latest attempt to train consumers to use payment cards, rather than cash. The message is: if you dare to use cash, you will make everyone angry and turn against you. A clearer message to Visa and MasterCard is from us, your customers: Interchange fees are a $40 billion annual hidden tax on retailers, consumers and our economy and those abroad.

We are not the first to note how damaging this ad is.

Here are a few postings on the YouTube site:


" Nothing great, or even good, about this ad"

" [I]sn't it typically the other way around...takes longer waiting for a fool to pay with a credit card than cash.dumb commerical"

[commentary,, via You Tube-linked Visa commercial]

The Flood of Banks' Windfall Profiteering at the Pumps Rises (commentary,

Oil leaped to a record high - surpassing $93 a barrel, which means the thousands of credit card association member banks are reaping even greater rewards as they charge a percent of each fill up from their credit card interchange fees.

During one U.S House hearing from time ago, the question was asked why the banks [Visa® and MasterCard®] are charging such high fees. That question was raised when oil was a tiny fraction of today's $93.00 a barrel.

We ask the question again.

  • Whatever happened to MasterCard's proposal to cap interchange fees at the pumps at $50.00?
  • Why, as best we can identify, did Visa remain silent and not join in the cap on interchange fees?
  • If they can put a cap on gas station fees, why not all fees, since, it is our contention that the bulk of the actual costs are tiny (only about 13% of interchange fee costs are used to cover its transaction costs).
  • If MasterCard could issue a press release that touted a cap on interchange fess at the pumps, why not in everything else too?

    Interesting that Visa enable its much smaller card association ally to come up with the cap in interchange fees at service stations without matching the program. If they were truly competing with each other, you would have thought the price elasticity would have snapped in place. By the way, whatever happened to that MasterCard's interchange fee limit, did it ever take effect that was promoted in their press release more than a year ago? [MasterCard was reported to explain that they were establishing this cap, but, was it ever imposed]?

    Remember: both Visa and MasterCard are/were owned by thousand of the same member banks, so they were more like a giant Starbucks-type business, then separate, like McDonald's and Burger King. Could you imagine if two independent, competing multi-national business conglomerates had the same board representation and the same group of owners? Think of Richard Branson's Virgin Airlines and its arch rival, British Airlines. I doubt they even talk to each other, other than in biting advertisements taunting each other, and thus much less likely to meet together and use their market power to illegally fix airline prices. Hey, that is our argument for how the electronic payment network regularly operate[s]d.

    MasterCard's® Planned Interchange Fee Cap For Gas Retailers ( Dec 16, 2006


Friday, October 26, 2007

Bank of America® Website: "Fee and Process Explained" (

One of the named defendants in our antitrust litigation has a website link and theatrical-like polished video to explain its fees and, in their words "how to prevent fees."

Lots of useful data, but conspicuously void are any links for merchants to help us, and therefore consumers, prevent our $40 billion annual hidden electronic payment fee.

In their words, click here to view.


Fact: Visa®, MasterCard® and Its Member Banks Are Profiteering From Califorina's Wildfires (

Interchange fees did not make sense before, and it certainly does not now. As people across the country are reaching into their wallets, grabbing their plastic to make donations to the American Red Cross and other non-profit charities to help people affected by the California wildfires, guess who is reaping windfall profits?

That's right.

Unless the card associations are planning to rescind the merchant interchange fees for non-profits, they and its thousands of financial institution member banks are poised to reap mega bucks from this unfair and hidden tax. In one hand, some banks are issuing press releases proclaiming their donations to this cause, but in the other, larger hand, are the tainted currency being siphoned back from the interchange fees imposed on well-intended peoples' benevolence.

Way to go, Visa® and MasterCard®

The credit and debit card acquiring industry are now acquiring vital funds that are needed to go to the recovery effort, not into the bank vaults to help remedy their own mismanagement from their exposure to the sub prime housing loan crisis. We wonder if those donating money are aware of these fees?

Excerpt from [Credit Card Processing for Nonprofits]:

  • Unfortunately for nonprofits, most of their transactions are not done face-to-face and fall into this category called “card not present” or “mail order telephone order (MOTO)” transactions. MOTO processing rates can also vary substantially based on the type of card and your organization’s processing volume - but it will typically be to 1% higher than a physically swiped transaction. (Personally, I can’t imagine someone who has stolen a credit card going online to make a fraudulent donation to their favorite nonprofit, but credit card companies don’t see it that way.)

Read the following FAQ from the American Red Cross Website:

  • "Why do you require a donation amount of $5? Like any other online credit card processing system we are charged by credit card companies. We don't want donors' well-intended gift to be offset by processing fees."

Interchange fees are seemingly forcing non-profits to violate their processing agreements. Like our retail and ecommerce business and millions of others, we are all precluded from requiring a minimum charge for an electronic transaction. Yes, in the American Red Cross' own words, they require a minimum transaction of $5.00. Does this mean that Visa and MasterCard will withdraw electronic payment support and pull the plug on their network because of this violation? We think not, but it is one more lapse and glaring reason why we question interchange fees. Listed among the 270 page MasterCard Merchant Rules Manual, is this warning the merchants cannot require a minimum transaction amount. [from the MasterCard website page 2-22. "9.12.3 Minimum/Maximum Transaction Amount Prohibited. A merchant must not require, or post signs indicating that it requires, a minimum or maximum transaction amount to accept a valid MasterCard card."]

Let's not just pick on MasterCard. On the Visa site, they have a link and recommendations of various charities that you can make instant donation to, including the American Red Cross. But, there is no mention of the fast that a percent of each transaction is not going to the designated non-profit, but rather being paid in merchant interchange fees. See link. On page 9 of the 135 page Rules For Visa Merchants document, they too explain that "Imposing minimum or maximum purchase amounts in order to accept a Visa card transaction is a violation of the Visa rules."


Whare's The Outrage - $92.00 Oil! (

Barrel of Gas Reaches $92.00

Remember, when motorists choose credit cards as payment at the pumps, they are typically paying a percent of each fill-up in merchant interchange fees. How can the card associations, along with its thousands of member banks be so conspiring to engage in this windfall profiteering during our nation's economic energy crisis?

Few motorists understand that as gas prices reach new record levels, with crude oil now hitting $91.10, they are more likely forced to pay with plastic, as they simply do not have enough cash. Furthermore, record levels of profiteering is being reaped at their expense.

Where is the outrage?

Is anyone noticing that we are talking about billions of dollars in excessive hidden taxes on service station owners, motorists and our entire economy. The same is true overseas, as other nations face equally exaggerated fuel costs.


Wednesday, October 24, 2007

Are Interchange Fees Set to Soar Upwards Again? (

For the past several months, we have been noticing the banks' missteps, from the sub prime mortgage fiasco, to plunging earnings. Today, Bank of America (a named defendant in our litigation) announced the firing of 3,000 people and that the head of its corporate and investment banking unit will leave too, following their recent 32% decline in profits for the quarter.

The question is whether the banks will again conspire to fix interchange rates at an even higher rate to cover their losses? How will they justify the new round of potential hidden merchant taxes? And, will anyone notice?

We will.

Also, we are just months from Visa's® planned IPO. If you thought the banks made bank from their selling off a percent of interest in MasterCard®, just wait for its big sister. Visa is three times the size of MasterCard, so the payoff to the banks could be even larger. And, just as with MasterCard's IPO, the Risk Factor warnings are equally as ominous; if we win our litigation, Visa could become insolvent, and a new cookie jar of windfall profiteering will have to be identified by the thousands of member banks that control the world's largest credit card association and electronic payment network.


"Shops Denounce Credit Card Costs" (via BBC News)

Thursday, October 18, 2007

Crude oil touches above $90 a barrel in electronic trading.

Interchange Fees Should Have Gone the Way of the IBM Selectric Typerwriters (

Unlike the fee structure of interchange rates, it is transparent that the named defendants along with their legal and advocacy teams are regularly reading, yet, they remain nearly silent on many issues.

So, let us step back and remember the history of technology. Whatever happened to the millions of manual typewriters? How about the IBM Selectric typewriters - which were the staple for most offices just decades ago? The same question can be directed towards the manual credit card imprinters and sizeable carbon copy paper payment receipts?

All are now obsolete.

Today, you can buy a keypad for your computer for a couple of dollars on EBay, but only the Smithsonian in Washington is interested in those antiquated manual credit card imprinters. They all served a purpose, back when interchange fees were cost-based, but, one part is still around. The merchant payment system is still with us, and now amounts to a nearly $40 billion annual hidden tax that few retailers or consumers even understand.

Today, as the banks continue reporting dismal profits, due to the housing sub prime mortgage fiasco and other egregious mismanagement, the interchange boondoggle continues to fill an otherwise failing levee of corporate wretchedness. If it was not for the political and massive financial might of the banking industry (its member banks jointly owned Visa® and MasterCard®), these fees would have nearly disappeared.

Just as how the health care industry got a kick in the head after Michael Moore’s film "Sicko," perhaps that is what Visa and MasterCard needs too.

Today, due to extraordinary political and economic schemes and collusion, the interchange rates in the U.S. are more than double, and often even more than that of collections in other, economically and technologically less developed nations.

Today, their market power is desperately grasping to hold on to these fees, especially when their other sources of revenues are being threatened.

Today, just as the Selectric typewriter and other ancient-like products abdicated to new technologies and innovations, we still have confidence that businesses and consumers will soon wake up and recognize that the banks' electronic payment system are also relics; built on what we assert are illegal, price-fixing schemes to fill their vaults with billions of dollars that are being misdirected due to their absolute market power and price-fixing by agreement.

Whether it is forcing credit card paying motorists to toss over upwards of nearly two-percent of the total cost of a fill-up, to demanding that an inner-city mom, shopping at her local convenience store for a gallon of milk is helping to subsidize the premium affinity cardholders' free mileage trip to the tropics, this must come to an end.

During the previous nearly 800 postings by over the past nearly three years, we have provided news, commentary and updates on what we assert is an extraordinary conspiracy by the Visa and MasterCard associations to wield their market power to fix the price of credit card interchange fees.

Visa is wrong.

MasterCard is wrong.

And, their member banks are wrong.

To quote from the movie "Network," the payments network has enraged merchants, who, like us are mad a hell and are not going to take it any more.

Crude-oil futures close at record-high $89.47

Tuesday, October 16, 2007

Oil Surges Above $88 a Barrel (

Is it just us, or are others wondering how the banks and two leading credit card associations are realizing windfall profiteering from the now $88 a barrel cost of oil? We ask again: Why is it that motorists and service stations are forced to pay a percent of each credit card transaction to the banks?


Monday, October 15, 2007

More Oil Profiterring. A Barrel of Gas Now at $86 (

Now we are at a record $86.00 for a barrel of gasoline. Why is it that the credit card associations are ablw to continue gauging service stations with a percent of each transaction at the pumps? As more people are forced to pay with credit cards, as gas prices continue to soar, the banks are reaping even higher windfall profits.


Will Banks Dip Into Interchange Cookie Jar to Help Earnings? (

We can't help but raise warning signs that the banks might look toward again reaching into their $40 billion annual interchange cookie jar to help fund their other disastrous fiscal flops. Citigroup, which is one of our named defendants in the multi-billion-dollar merchant interchange litigation just announced its its third-quarter profits slumped 57%. Will the banking giant and the thousands of other member banks seek to further choke retailers and consumers by scheming to further raise interchange fees? Remember, merchants overseas are also fuming over paying even less than half the U.S. interchange fees. We are poised and tracking our mail to see whether their hostility against their core business and consumer customers continues.


Sunday, October 14, 2007

Question from the UK: Why Are Rates More than Double in the U.S.? (

A good question.

Having just returned from addressing an international photo conference, I asked merchants and retailers I met during a separate visit to London, why their merchant interchange rates are more than half that in the States? The typical reply was one of confusion, especially because electronic payment technology and the card associations' network, they would think, was more advanced in the U.S., and thus should be even lower than their rates, which they too say are way too high.

[Average interchange fees in the UK is about 0.70% and 1.70% in the U.S., respectively].


Wednesday, October 03, 2007

"Merchant Group’s Report to Lawmaker Triggers Interchange Tussle" (Digital Transactions)

Why Exactly Are the Interchange Fees More Than Double in The U.S. (

When people ask us about the antitrust litigation, one of the first questions is why exactly are rates in the U.S. more than double other nations' merchant interchange fees? They too do not understand how the world's more technologically advanced country is forced to pay about 1.7% from every credit card transaction in these fees, when less industrialized nations with inferior electronic payment network infrastructures are afforded such significantly lower rates.

During our trip to Europe, we are eager to get feedback from other retailers to better understand these out-of-control multi-billion dollar charges.

The reason? GREED and unbridled, price-fixing by agreement market power!


"EU's Kroes to Take Decision on MasterCard Interchange Fees by End of the Year" (via Newstex)

Excerpt: BRUSSELS, Oct. 3, 2007 (Thomson Financial delivered by Newstex) -- EU competition commissioner Neelie Kroes said her competition services hope to complete an inquiry into MasterCard Inc (NYSE:MA) and rule on the credit card group's interchange fee payments network by the end of the year.

[Source: Newstex]

Monday, October 01, 2007

"Merchants Respond To Questions About Impact of Interchange Fees" (MPC)

Facts About Interchange Fees Contradict Card Company Claims

Washington, D.C. - October 1, 2007 - The Merchants Payments Coalition today delivered to members of the House Judiciary Committee's Antitrust Task Force a detailed report responding to questions about Visa and MasterCard's hidden credit card interchange fees raised by Representative Ric Keller, R-Fla., at a recent hearing.

"This report separates facts from fiction on credit card interchange practices," said MPC Chairman Mallory Duncan, senior vice president and general counsel at the National Retail Federation. "The credit card industry has made numerous questionable statements. We have attempted to set the record straight."

Duncan testified on behalf of the MPC during a July 19 hearing on credit card interchange held by the Antitrust Task Force, arguing that Visa and MasterCard practices in setting interchange rates constitute a violation of federal antitrust laws that costs merchants and consumers more than $40 billion a year. During the hearing, Keller identified a number of key issues on which merchants and witnesses for the credit card industry had made conflicting statements.

Following are key points raised by Keller, and MPC's responses. [Click
here] for the full MPC report....

Merchants say Visa and MasterCard keep their operating rules secret, but Visa and MasterCard say the rules are posted on their web sites. Fact: Visa and MasterCard both post excerpts from their rules on their web sites, but not the complete rules needed for a full understanding. Visa offers to show merchants a fuller set of the rules, but only if they sign a non-disclosure agreement prohibiting discussion of what they see.

Merchants say they are not allowed to offer cash discounts, but Visa and MasterCard say cash discounts are allowed. Fact: Federal law prohibits a ban on cash discounts, but credit card company rules make cash discounts extremely difficult to offer. Visa in particular has attempted to characterize some cash discounts as a prohibited surcharge on credit card use, and has threatened some merchants with fines of $5,000 a day for offering cash discounts.

Merchants say interchange rates are non-negotiable, while Visa and MasterCard say they can be negotiated. Fact: Merchants are not part of the process when interchange rates are set and cannot negotiate interchange rates with Visa or MasterCard. Courts have held that Visa and MasterCard dominate the credit card market, and the Kansas City Federal Reserve found that the popularity of cards among consumers gives merchants no realistic choice but to accept Visa and MasterCard regardless of rates.

Merchants say interchange fees hurt consumers while Visa and MasterCard say interchange fees benefit consumers. Fact: Interchange fees do pay for rewards programs offered by credit cards, but the fees mean that all consumers pay for rewards whether they take advantage of them or not. All consumers shoulder the burden of interchange as the fees are passed along in higher prices, with the average family paying an extra $300 because of interchange fees in 2006.

Visa and MasterCard claim retailers are asking for price controls, while retailers say they want only competition. Fact: Merchants have not advocated price controls, either in testimony before Congress or in meetings with members of Congress. Claims that merchants are advocating price controls are false.

Visa and MasterCard say retailers who accept any Visa credit card should be required to accept all Visa credit cards and the same for MasterCard, while retailers say they should be allowed to choose which cards to accept. Fact: Visa and MasterCard each have an "honor all cards" rule requiring merchants who accept any credit cards under the Visa name or MasterCard name to accept all credit cards issued under that name. Merchants believe this is a key part of the problem, because even if banks competed to offer lower interchange rates, merchants would still be required to accept those with high interchange rates. Also, card issuers do not currently provide merchants with the information necessary to know the exact interchange rate being charged when a card is presented at the register.

The MPC is 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 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 more information, visit

[Source: MPC, press release]

"Sleazy Credit Card Tactics Under Fire" (via MSN)

[repost, May, 2006] MasterCard's® Legal Bill Could Be $26 Bln (from report in CardLine)