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This site features the most comprehensive international breaking news, daily updates and commentaries on the history of merchant interchange fees. The goal in representing millions of merchants and cardholders is to reform an antiquated, costly and unfair payment system and explain why the nearly $40 billion annual merchant interchange fee is a hidden tax on consumers and retailers.
WayTooHigh.com: The Credit Card Interchange Report, is co-edited by Carl Berman and Mitch Goldstone, founders of California-based 30 Minute Photos Etc., the national online boutique photo service, 30minphotos.com and its newest division, ScanMyPhotos.com. Berman and Goldstone are also the lead plaintiffs and class representatives in the multi-billion dollar antitrust class-action litigation against Visa, MasterCard and member banks. This informational web site was created to provide news and commentary updates only. None of the information posted on WayTooHigh.com is intended to constitute legal arguments; it reflects only the opinions of its co-editors and not of any other plaintiffs or other parties involved in the merchant antitrust litigation. The information is not guaranteed to be correct, complete, or current. We make no warranty, express or implied, about the accuracy or reliability of the information posted by WayTooHigh.com or at any other Web site to which this site is linked.
Showing posts with label life takes visa. Show all posts
Showing posts with label life takes visa. Show all posts
Sunday, November 04, 2007
Friday, November 02, 2007
This Holiday, Most Gifts Will Be Gift Cards, According to PayPal (via BW release)
According to the Oct 31, BusinessWire release, "the Nielsen survey [for PayPal] revealed that more shoppers are playing it safe this holiday season by buying gift cards, rather than purchasing tailored gifts for their loved ones. In fact, 64 percent of shoppers said they plan to give gift cards. But recipients don’t seem to mind. Fifty seven percent of respondents said they would actually prefer to receive money or a gift card in place of the traditional present."
In 2006, just under 30% of all holiday shopping was online, this year, according to the PayPal release, it will be 40% which means that the card associations and member banks are poised to take even more money from interchange fees. Nearly all online orders require electronic payments. For our business, 100% of all ecommerce business requires electronic payments.
Why is this so important to our interchange battle?
When you use a credit card, where the acquiring and issuing financial institution are the same, effectively, they mirror gift cards. The gift card is being electronically transacted by the issuing business and ... there are no interchange fees. Just like when you write a paper check, or use a PIN-based debit card in Canada, there are no interchange fees. So, the question is, how can Visa® and MasterCard's® market power still force this $40 billion hidden tax on retailers and consumers?
The banks might counter and explain that gift cards prove there is a choice and that there really is competition. But, not so fast. How are most gift cards paid for? That's right, plastic! And, Visa and MasterCard have nearly an 80% market share of the electronic payment network.
[Commentary, WayTooHigh.com, via survey data from the Oct 31 PayPal BW release]
In 2006, just under 30% of all holiday shopping was online, this year, according to the PayPal release, it will be 40% which means that the card associations and member banks are poised to take even more money from interchange fees. Nearly all online orders require electronic payments. For our business, 100% of all ecommerce business requires electronic payments.
Why is this so important to our interchange battle?
When you use a credit card, where the acquiring and issuing financial institution are the same, effectively, they mirror gift cards. The gift card is being electronically transacted by the issuing business and ... there are no interchange fees. Just like when you write a paper check, or use a PIN-based debit card in Canada, there are no interchange fees. So, the question is, how can Visa® and MasterCard's® market power still force this $40 billion hidden tax on retailers and consumers?
The banks might counter and explain that gift cards prove there is a choice and that there really is competition. But, not so fast. How are most gift cards paid for? That's right, plastic! And, Visa and MasterCard have nearly an 80% market share of the electronic payment network.
[Commentary, WayTooHigh.com, via survey data from the Oct 31 PayPal BW release]
Monday, October 29, 2007
Visa's® 'Anti-Gay' TV Commercial Is Offensive On Many Levels (WayTooHigh.com)
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 ScanMyPhotos.com 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:
"Homophobic"
" 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, WayTooHigh.com, via You Tube-linked Visa 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 ScanMyPhotos.com 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:
"Homophobic"
" 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, WayTooHigh.com, via You Tube-linked Visa commercial]
Friday, October 26, 2007
Fact: Visa®, MasterCard® and Its Member Banks Are Profiteering From Califorina's Wildfires (WayTooHigh.com)
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 About.com [Credit Card Processing for Nonprofits]:
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 About.com [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."
[Commentary: WayTooHigh.com]
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