Associated Press Goofs on Visa® / Amex® Settlement Story (WayTooHigh.com)

Wow, did the Associated Press goof. They must have had all the lead financial reporters covering the market plunge on Wednesday and had a second-string reporter copy press releases rather than research what is a huge admission by Visa®. You would think that $2,250,000,000 was enough money to get the story right?

According to AP, "The truce announced Wednesday rids Visa of a potential albatross before the San Francisco-based company's initial public offering of stock." The reality is the AmEx® settlement is puny when compared to the more than $100,000,000,000 mega-billion dollar violations that Visa, MasterCard® and their member banks could owe in our class-action merchant interchange litigation. With more than eight-hundred WayTooHigh.com news and commentary postings - spanning more than 2 1/2 years - and with a great deal of attention drawn towards our litigation, Visa and its sister payment network, MasterCard, are not in the clear, by any means.

Extracted from the preceding SEC IPO filing, in MasterCard Inc's own words:

1) "... We have not established reserves for any of the significant legal proceedings in which we are currently involved."

2) "If we are found liable in any of these lawsuits, we may, among other things, be forced to pay damages and/or change our business practices and pricing structure, which could have a material adverse effect on our revenue and profitability, or, in certain circumstances, even cause us to become insolvent, and result in a significant reduction in the value, or the complete loss, of your investment ..."

3) "If we are less successful than Visa in defending interchange fees, we could also be competitively disadvantaged against Visa."

4) "If we are ultimately unsuccessful in our defense of interchange fees, such regulation may have a material adverse impact on our revenue, our prospects for future growth, and our overall business."

Largest Planned IPO Since Google has No Safety Net (WayTooHigh.com)

If you read into the AP story, it appears that Visa's IPO will now face calm waters. Hardly. Just look at their SEC filing and very clear risk factors that if [when] we are successful and prove our case that they illegally used their market power to conspire to fix prices, along with the triple damages, they could face "insolvency." The same is true for MasterCard as well. Can't get any clearer than that!

"Besides raising financial uncertainties, the case threatened to raise embarrassing questions about Visa's past business practices with a September trial date looming," said AP. Embarrassing?, just read the prior eight-hundred and one WayTooHigh.com postings! Overlooking our weak grasp of English and liberal rules of grammar, and you see something much more ominous.

Although Visa today did not acknowledge any wrongdoing, a first-grader would know that something must have happened as they prepare to hand out $2,250,000,000. Could you imagine if they DID do something wrong?!

According to the AP story, "American Express' three-year-old lawsuit painted an unflattering portrait of Visa, alleging the network operator conspired with some of its largest card issuers to thwart American Express' growth." So far, MasterCard's head remains in the sand. Everyone at the card association seems blind to the reality of our case, especially Sharon Gamsin, their PR and communications hack, who according to the same wire story said "MasterCard remains confident about its defense against the allegations." Sure. Since the same financial institutions which own and control Visa and gave the green light to settle, were also on the MasterCard and Visa boards for many years, what's the difference?

Getting back to that first-grader, even they would have to conclusively understand that MasterCard is next to recognize that the game is up.

"Before IPO, Visa Reaches a $2.25 Billion AmEx Antitrust Settlement" (Digital Transactions)

[commentary: WayTooHigh.com, via AP news story]

"JPMorgan Chase Calls It: 'A Lump of Coal' - We Call It: More Bait &-Switch Banking Gimmicks (WayTooHigh.com)

More tricks by the card associations and its member banks. As we near the holiday retail selling season, our business, along with millions of other retailers are again being faced with more gimmicks and schemes to force consumers to use their debit cards as credit cards. Even though the funds are instantly withdrawn from their bank accounts, the interchange fees are much, much higher, and that is how the "contest" games. Through contests and bait-and-switch-like small-print rules, cardholders can only enter the fun if they do not use the less expensive PIN-based debit card electronic payment.

We received the below letter today. But, first, as a refresher on how these games are played, see the below links to prior WayTooHigh.com postings. Even JPMorgan Chase® has a sense of humor as it sticks its tongue in the face of all its merchant customers. In the bank's own words from their Nov 1st press release: "(For this promotion, PIN purchases qualify only for a lump of coal)."

Look at What Visa® is Up to Now (WayTooHigh.com)

Confusing Debit Cards (WayTooHigh.com)

Who Is The Real Violator? (WayTooHigh.com)

WayTooHigh.com Reader Comment

Dear Mitch Goldstone:

JPMorgan Chase (one of the named defendants in your antitrust litigation, and the biggest bank in my area with a 17% market share) has came up with a sneaky new way to switch people over from cheaper PIN debit transactions to more expensive signature transactions this holiday season, forcing merchants to pay higher fees in the process (just when they need it the least).

The promotion, named "Chase Picks Up The Tab" (which runs until December 31) goes like this: Every 500th Chase Visa Check Card purchase from all enrolled Chase checking customers who reside within the promotional area is paid for by Chase (up to $500, and if the purchase is less than $5, the payoff is $5)... Chase will be giving out an estimated 50,000 purchases. But PIN-based purchases are not eligible among the "qualifying purchases".

Way to go, Chase! You just made merchants furious!

And how will this be paid for? Interchange profits, of course... instead of merchants paying 25-50 cents for PIN debit, they'll have to pay that 1.8+% signature debit fee, so this should be called "Merchants Pick Up The Tab (In Higher Interchange Fees)". And customers will want to sign because of this promotion... so what will be the bottom-line hit to merchants in areas with large amounts of Chase checking customers, and what will be the payoff to Chase (and Visa Inc.)? You can bet on one thing: It won't be pocket change for either.

P.S.: Don't forget that JPMorgan Chase also owns over half of one of the three largest Visa/MasterCard processors (Chase Paymentech), so the payoff to JPMorgan Chase could be even bigger at some merchants. Any wonder why JPMorgan Chase is doing better than Citigroup or Wells Fargo?