Crude Oil Nearly Doubled Since February (WayTooHigh.com)

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 (WayTooHigh.com) (Originally posted on May 26, 2006)

[Commentary: WayTooHigh.com]

Repost: Printing The Exact Interchange Fee on Every Electronic Charge Receipt (WayTooHigh.com)

Printing Exact Merchant Interchange Fee on Charge Receipts by Thanksgiving (WayTooHigh.com)

Seventy-two pages, five-pages or one line? (WayTooHigh.com)

Why not post exact interchange fee on receipts? (WayTooHigh.com)

Every credit and debit card receipt should include interchange charge (WayTooHigh.com)

MasterCard® interchange rate schedules on website (via PRNewswire)

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

What's Higher: Gas Prices or MasterCard's® Market Capitalization? (WayTooHigh.com)

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 WayTooHigh.com news and commentary updates, there is a wealth of reasons to be even more worried than was Forbes' reporter.

[commentary: WayTooHigh.com]

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]

The Flood of Banks' Windfall Profiteering at the Pumps Rises (commentary, WayTooHigh.com)

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 (WayTooHigh.com) Dec 16, 2006
  
  [Commentary: WayTooHigh.com

Bank of America® Website: "Fee and Process Explained" (WayTooHigh.com)

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.

[Commentary: WayTooHigh.com]

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]:

• 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]

Whare's The Outrage - $92.00 Oil! (WayTooHigh.com)

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.

[Commentary: WayTooHigh.com]

Are Interchange Fees Set to Soar Upwards Again? (WayTooHigh.com)

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.

[Commentary: WayTooHigh.com]

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

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

Interchange Fees Should Have Gone the Way of the IBM Selectric Typerwriters (WayTooHigh.com)

Unlike the fee structure of interchange rates, it is transparent that the named defendants along with their legal and advocacy teams are regularly reading WayTooHigh.com, 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 WayTooHigh.com 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.


[Commentary: WayTooHigh.com]

Crude-oil futures close at record-high $89.47

Oil Surges Above $88 a Barrel (WayTooHigh.com)

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?

[Commentary: WayTooHigh.com]

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

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.

[commentary: WayTooHigh.com]

Will Banks Dip Into Interchange Cookie Jar to Help Earnings? (WayTooHigh.com)

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.

[Commentary: WayTooHigh.com]

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

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].

[Source: WayTooHigh.com]

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

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

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!

[Commentary: WayTooHigh.com]

"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]

"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 www.unfaircreditcardfees.com.

[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)

More Bank Profiteering From Record Gas Prices (WayTooHigh.com)

Regularly, interchange fee increases take place in the Fall and mid-Spring. We are closely monitoring to see whether Visa® and MasterCard® will be even more brazen and again hike their fees. But, one sector of our economy is posed to create unheard of profiteering for the card associations and its tens-of-thousands of member banks. We also wonder if the financial turmoil in the world credit cards, might create an opportunity for the banks illegally raise prices by agreement as they seek new profits by raising their interchange fees to cover the mortgage meltdown?

As gas prices continue to soar, so too is interchange fee profiteering, due to what we assert are illegal price-fixing by agreement and absolute market power (Visa and MasterCard's network controls about 80% of the electronic payment business).

Rather than rescinding their unjustified hidden-taxes on motorists and our entire economy, we are alarmed to learn that, according to The Wall Street Journal (page 1. Sept 29) [click here to read the article - subscription required], gas prices could rise to $100.00 a barrel. The two WSJ reporters, Peter Fritsch and Kelly Evans, explained how the U.S. economy could withstand $100 a barrel oil, but they were absent in also mentioning exactly what that stratospheric rate would do to the banks' bottom line. Nor did they explain how the banks can possibly justify this extraordinary profiteering as our nation faces such a burdensome economic energy crisis.

Forget, for a moment, ExxonMobil and other gas companies' earnings, and pause to ask why exactly are credit card interchange fees based on a percent of each sale? Even Realtors are dealing and lowering their once standard 6% commissions; in this case the banks are reaping about 1.7% off the top from every credit card charge at the pumps. Could they be earning as much as $2.00 - $3.00 from every fill-up, especially as motorists are now more inclined to use plastic, as they do not have enough cash on hand?

Last year, MasterCard announced they were instituting a $50.00 interchange fee cap at the pumps. Visa, however, has been silent on the issue, and we are unsure whether the fee limit by MasterCard ever took effect.

Either way, since many of the same banks which control MasterCard, also have stakes in Visa, it is really a giant shell game anyway.

[Commentary: WayTooHigh.com]

The Battle Against Interchange Fees is Global [See Website: StopUnfairCardFees.eu

WayTooHigh.com - The Credit Card Interchange Report has been providing daily news and commentary updates on our battle against merchant interchange fees for nearly 2 1/2 years, but our cause is not just domestic within the United States. EuroCommerce is hosting an outstanding website that further cements the critical multi-billion dollar issues that affects all retailers in Europe and across the globe. Next month, we [30 Minute photos Etc. and ScanMyPhotos.com] will be attending and speaking at a photo industry convention in the UK and will be interested in gaining first-hand prospectives from other retailers on how the interchange extortion is affecting them as well.

The below highlights are from the StopUnfairCardFees.eu website. Click here to read more.

• Did you know? Visa and MasterCard argue that the hidden fees - which cost Europe €25 billion every year - are essential to run card schemes. Why then are there some card schemes in Europe which operate successfully without hidden ‘interchange’ fees?
• “My bank told me the fee covers processing costs for Visa and MasterCard. But I read that only 13% of the fees go toward these costs, with the rest going to bank profits, and rewards for the select few cardholders. What’s the deal?”
• Europe’s retailers want the best for Europe’s shoppers – in terms of price, quality, service and choice. But prices in Europe are artificially inflated because of hidden fees for debit and credit cards – fees which all shoppers end up paying for. We believe Europe’s shoppers have the right to know …
• What is happening in Europe is not an isolated case. Visa, MasterCard and the banks that hide behind them try around the world to continue and spread their anti-competitive activities. Yet in some countries, they are no longer able to get away with it.
• According to US Senator Arlen Specter: “We may need to modify our antitrust laws to stop credit card companies from engaging in activities to gouge and jack up prices.”
• According to Philip Lowe, Assistant Governor of the Reserve Bank of Australia: “These fees are not subject to the normal forces of competition and in the RBA’s view were distorting the use of payment methods in Australia.”
• MasterCard and Visa and their interchange fees have also aroused the interest of regulatory authorities and central banks in a range of further countries across the world. These include: Brazil, Columbia, Mexico, South Africa, Singapore, Switzerland, and Israel.
• What is happening in Europe is not an isolated case. Visa, MasterCard and the banks that hide behind them try around the world to continue and spread their anti-competitive activities. Yet in some countries, they are no longer able to get away with it.
• Why is it anti-competitive? Unless constraints are imposed by regulators, payment card companies and their banks can increase interchange rates at any time by any amount. In the words of the European Competition Commissioner, Neelie Kroes, “these high fees are a result of a lack of competition in a market where 95% of cross border payments in Europe are made by two companies. The situation is even bleaker in some Member States, where there is only one single acquiring bank servicing retailers.”
• Why are interchange fees unfair? First of all, Visa and MasterCard do not inform customers of these interchange fees, they simply set them with the banks behind them and charge retailers and their shoppers accordingly. We believe you have the right to know more about these fees. It is even more unfair for shoppers who do not use the credit or debit cards. That’s because these hidden fees are not charged just to cardholders - that is forbidden the rules of by some card schemes and banks. The high cost of card payments must be passed on across all purchases. This drives up the cost of goods and services for all consumers whether they pay with plastic or cash. This has a serious knock on effect for the wider economy.
• What’s it about? Whether you use a credit card or not, you pay a hidden fee on virtually every transaction you make. The fees have an inflationary effect and they add up. They cost European shoppers tens of billions of Euros every year.

[Source: Above abstracts from StopUnfairCardFees.eu]

Riddle: What’s The Difference Between The Cost To Send An Email And An Electronic Payment? $40 billion each year! (WayTooHigh.com)

As our company continues to make news for the super-fast photo scanning business we built that is transforming the photo imaging industry and using technology to slash prices for preserving generations of photo snapshots, we wondered why technology has not also led to rock-bottom and tumbled-down interchange fees?

To be more transparent and divulge just how ghoulish this hidden tax is, Visa® and MasterCard® should post the exact interchange fee for each transaction as a separate item on every debit and credit card receipt. We first raised this issue in January, 2006, but they seem too busy figuring out how to go public to distance the banks from our alleged antitrust violations. If they would only pause from what we assert is their attempt to pass along the liability from this litigation onto the public, and instead, agree to post the exact interchange fees on every receipt, then, all merchants and cardholders would understand why we are so passionate about this issue. There would no longer be a hidden tax, but, rather a very vocal cascade of resistance against the peddlers of these unfair fees.

Why are the merchant interchange fees about 1.7% in the U.S. and as low as zero in other nations? And, as other electronic transactions have been slashed too rock-bottom, why have some of their rates [ex. debit cards] tripled in the past 8-years?

Let us pause for a brief study break and review the historical way of sending ["transmitting"] a traditional letter and the processing of a charge slip. In the previous decade, if you wanted to send a letter, you generally bought stationary, an envelope, postage and drove to the Post Office to mail it; days later it was received. Also about ten years ago, merchants, like us, had to stock up on thick, multi-page, carbon-copy charge card receipts, swipe the payment cards through a manual imprinter, mail it to the processing company on the other coast [Florida]. Then, days later, the transaction - less a substantially lower interchange fee than today - was credited to your bank account. As technology advanced, instead of lowering interchange fees, it has actually leaped ahead.

Today, we all use email, and essentially, it is free. Could you imagine if the two leading credit card associations and its thousands of member banks were also involved with the exploration of the Internet? Using their surreptitious market power and pricing domination, every electronic [email] "letter" would come with a beefed-up fee. But, the actual cost to use the Internet network to transmit an electronic message, must be about the same as the cost to transmit an electronic payment on its network, so why are the banks still granted the potency to exert such immense multi-billion-dollar hidden taxes on merchants, cardholders and our economy?

[Commentary: WayTooHigh.com]

"Dot-Com" Bust, Sub-Prime Mortgage Collapse, Is Interchange Scheme Next? (WayTooHigh.com)

Is another multi-billion dollar bubble about to collapse?

Hundreds of years ago, during Holland's speculative tulip bulb craze that gripped the nation, the laws of economics prevailed and the market for flowers collapsed. During the closing days of the last decade, we again witnessed a market failure from the Internet "dot.com" fiasco. This summer, it was the unchecked financial policies that led to our nation's housing predicament.

Where were the regulators when U.S. President Bush was encourage home ownership? Now, we are saddled with billions of dollars in losses because greed by the financial institutions was elevated above smart planning.

The same thing is again happening with merchant interchange fees.

Due to the banks' unbridled pricing controls over merchant interchange fees, what use to be cost-based is today a fiefdom for non-stop rate increases that retailers and consumers are unable to control. There are no checks to this madness; Visa®, MasterCard® and its thousands of member banks are today's new enemies battling its two core customers - retailers and cardholders. At least with the tulip craze in the early 1700s, there was a fragrant aroma, while today's threatening interchange fees and its electronic payment network is nothing more than a rotten, unfair conspiracy to unlawfully fix prices.

Studying MasterCard and now Visa's IPO "Risk Factors" says it all and flashes the most serious of warnings as they foreshadow what might just happen: the two leading credit card associations could become "insolvent" ["Interchange fees are often the largest component of the costs that acquirers charge merchants in connection with the acceptance of payment cards," according to Visa's SEC filing]

If our class action prevails in this antitrust litigation, the same outcome as with tulip bulbs in Holland, Internet stocks on Wall Street and the housing prices in southern California and other speculative markets might just be a giant foreshadowing of what could happen to this interchange fee debacle.

Today, there is little justification for any interchange fee, let alone upwards of $40 billion dollars each year.

Today's market power of the general purpose card network is without justification. Just look at other nations, even those less industrialized ones and ask why their interchange fees are so much lower than the 1.7% in the U.S.

And, why again are interchange fees for the very costly check writing and clearing process also zero in the U.S.?

[Commentary: WayTooHigh.com]

"Paper or Plastic? Retailers Struggle With Fees as Customers Increasingly Use Bank Cards Over Cash" (The Patriot Ledger)

The following is a reprint from the Steve Adams reported article in The Patriot Ledger on Saturday, Sept 22, 2007 - The Patriot Ledger

-----------------------------------------------------------------

Retailers say they’re the biggest tax you’ve never heard of: They’re transaction fees that credit card companies and banks charge merchants every time a customer swipes a credit or debit card to pay for a purchase.

As dozens of lawsuits challenging the fees grind through the courts and Congress holds off on any action, many mom-and-pop merchants are taking matters into their own hands. Violating the terms of their card agreements, many are requiring minimum purchases - typically $10 - for customers using plastic.

Rockland-based Tedeschi Food Shops has received at least two complaints in recent weeks about franchisees setting minimum purchases, executive vice president Robert Tedeschi Jr. said. The company has notified them that they are violating Tedeschi’s policy.

Still, Tedeschi said he sympathizes with the plight of independent merchants, who lose money every time a customer pays for a small transaction with a card.

‘‘We put a notice out to all franchisees that you can’t do it,’’ Tedeschi said. ‘‘I hate to tell them that, because it’s just killing them.’’

Tedeschi Food Shops typically would make a profit of 2 cents on a $3 gallon of gas, but transaction fees gobble up 9 cents per gallon, causing shops to oftentimes lose money on gasoline sales, Tedeschi said.

As plastic threatens to overtake greenbacks as the predominant form of payment in stores, the stakes are high for merchants, banks and card companies.

A Morgan Stanley report indicated that average transaction fees rose from 1.6 percent of a purchase in 1998 to 1.75 percent in 2004. The report said the dollar volume of fee transactions grew from $9.4 billion to $17.5 billion during that period, through a combination of rising fees and more card transactions. The Merchants’ Payment Coalition, a group of retailers organized to fight the fees, estimates interchange fees hit $30.7 billion in 2005.

Transaction fees consist of three elements. When a customer pays with a debit or credit card, the bank that issued the customer’s card charges the store’s bank a ‘‘merchant discount fee’’ and an ‘‘interchange fee’’ to cover the cost of issuing cards and collecting payments. The merchant’s bank then imposes an additional fee, which is also charged to the merchant.

Credit cards have dozens of fee structures that incorporate factors such as the issuing bank’s fees, whether the customer pays with a credit card, a debit card with signature or a debit card with pin code, and how often the merchant reconciles transactions. Rewards cards typically have higher fees than others.

Regardless of the details, fees can wipe out profit margins and make minor card purchases a losing proposition for merchants.‘‘

If somebody puts a pack of gum on the counter and pays with a credit card, you’re better off if the person just stole it,’’ said Jeff Lenard, spokesman for the Washington-based National Association of Convenience Stores.

According to a survey of its members, convenience stores and gas stations made $4.8 billion in profits in 2006, a figure that was diminished by the $6.6 billion they paid in card fees.‘‘

Essentially the credit card companies made more at the stores than the stores themselves,’’ Lenard said.

The Electronic Payments Coalition, which lobbies on behalf of banks and credit card companies, disputes that fees are inflated and says government regulation would reduce choices for consumers. Executive Director Peter Madigan said the fees reflect investments by banks and credit card companies in technology, enabling millions of transactions to be processed in seconds. Fees are overhead costs for merchants, enabling them to attract business they otherwise wouldn’t get, Madigan said.‘‘

We think it does a lot for the merchant. It brings you in as a customer if you’ve got no money in your pocket,’’ he said.

Critics say Visa and MasterCard enjoy a virtual ‘‘duopoly’’ over electronic payments, enabling them to jack up fees out of proportion to their administrative expenses. The House Judiciary Committee heard testimony in July that the fees violate antitrust laws, and Congress continues to study the issue.‘‘

It’s been a very tight relationship and they have had the ability to do whatever they want with transaction fees,’’ said Pete Bartolik, spokesman for alternative transaction processor Tempo Payments of San Mateo, Calif. ‘‘ The more people use (debit and credit cards), the more prices go up.’’

Madigan said there is ample competition within the industry, with more than 14,000 banks offering debit and credit cards.

Rosetta Jones, vice president of Visa USA, defended interchange fees.‘‘

Visa will continue to protect consumers against some merchants who want to shift their cost of doing business onto consumers by charging a check out fee,’’ Jones said in a prepared statement. ‘‘This approach has already been tried - and according to reports failed - in Australia where check out fees have resulted in increased costs and fewer choices for cardholders.’’

In the meantime, retailers such as CVS and Quincy-based Stop & Shop Supermarket Co. have launched debit cards under their own brands with alternative transaction processors that offer lower fees.

Stop & Shop in 2005 launched a ‘‘PayVantage’’ card that links directly to customers’ checking accounts and also stores their loyalty card information. The transactions are processed by First Data Corp., a Colorado financial services company. After a test-launch at 12 Massachusetts stores, the card is now available at 30 stores.

On Sept. 10, Woonsocket, R.I.-based CVS began test-marketing a loyalty ‘‘rewards payment’’ card at 141 stores in the Indianapolis area. The cards link directly to customers’ checking accounts, cutting Visa and Mastercard out of the loop. It also stores information on purchases typically saved on a CVS ExtraCare card, serving both as a loyalty card and a debit card.

The card is issued by Prospect Heights, Ill.-based HSBC Finance Corp., which is trying to set up loyalty debit card programs with other retailers.

Tempo Payments was founded in 2000 to offer merchants an alternate card processing system. The company charges retailers a flat 15-cent fee per transaction, said Bartolik, its spokesman.

Issued by individual retailers under their brand name, the cards are accepted at 200,000 retail locations nationwide including such chains as Best Buy, Circuit City, Marshalls, T.J. Maxx and Talbots. Customers’ cards can be used not only at the retailer that issued the card, but any other retailer that accepts Tempo.

Boca Raton, Fla.-based National Payment Card has launched its own ‘‘decoupled’’ debit cards that link directly to customers’ checking accounts and is targeting gas stations as retail partners. The company says it can reduce merchants’ transaction fees by more than 80 percent.

Retailers, in turn, typically offer three-cent-per-gallon discounts on gasoline to encourage customers to sign up for the service.

In the 21 states that embed magnetic strips on the back of driver’s licenses, customers can enter their license information on a Web site and swipe the license at stations as a form of payment.

NPC processes the transactions through the Automated Clearing House, a network commonly used for direct deposits and automatic withdrawals from bank accounts.

The company counts several hundred gas stations in southern states as customers, CEO Joe Randazza said. He predicts explosive growth because of merchants’ concerns over fees.‘‘

This is the second-largest expense to a gas merchant (after the cost of fuel),’’ he said.

[source: Copyright 2007, The Patriot Ledger]

Where Are The Pro-Interchange Fee Blogs? (WayTooHigh.com)

Like in baseball, it is easy to keep score, just look at the scoreboard. In politics, there are polls. For interchange fees, there is little other than those regular notices of fee increases.

As retailers continue battling against the two leading credit card associations and its member banks, it is also easy to keep score.

With nearly 800 postings on WayTooHigh.com - The Credit Card Interchange Report, we have yet to profile a single pro-interchange fee blog. Not one. Well, there is always that "pro consumer," "pro competition" group that enjoys the financial support of Visa, but that really shouldn't count.

Where are the merchants championing 1.7% interchange fee rates, and challenging WayTooHigh.com. Where are U.S. retailers thanking Visa® and MasterCard® for charging among the highest rates in the world, while abroad, the interchange fees are 0.7%, 0.5% and even 0.0% - there are no interchange fee for debit PIN-based cards in Canada.

The reason for such silence?

Merchants understand they are being taken on a ride when cardholders present their affinity frequent flyer cards. The merchants, and thus the consumers are paying for these perks and the nearly $40 billion a year in interchange fees.

Since we were the first to launch the merchant interchange litigation back in mid-2005, there have been no pro-interchange fee blogs that we are familiar with. That speaks volumes about our cause and the unfair fees.

*** Stay tuned for our regular news and commentary updates on Visa over the next several months as it attempts to follow MasterCard and try to distance its member banks' liabilities.

[commentary: WayTooHigh.com]

"Mastercard Paid Lobbyist $280,000" (via AP)

"Credit Card Fees Eat Up Merchants’ Profits" (Citizen-Times.com)

From the John Boyle reported Citizen-Times' merchant interchange article, we share this observation about who actually receives the $40 billion dollars each year from interchange fees.

Someone does!

As MasterCard® spokeswoman, Sharon Gamsin was quoted in the article, MasterCard [and the Visa® network] "does not receive revenue from interchange — it is a payment between acquiring and issuing banks to balance costs in the system.” However, let us look at who owns [owned] the two leading credit card associations. That's right! The member banks - the same ones who stand accused by us and millions of retailers through our class-action antitrust litigation of illegal price-fixing.

Many banks are double billing; they are both the "acquiring" and "issuing" bank, so how exactly can they justify the double-billing? If they ever get around to answering that, then, question number two: How are the banks justifying they deserve a percent of evey credit card sale at the gas pumps? Oh yes, when you can illegally fix the prices and own the network, you can get away with anything as long as your customers don't notice. As the first of the new lead plaintiff's, having filed the new merchant interchange class-action in 2005, we notice and are asking the questions.

Even as Visa prepares to follow MasterCard towards seeking to protect its current owners (the banks) from this multi-billion dollar potential liability, whether you say that the card associations or the banks directly earn the interchange fee is more about semantics and the interrelationship between the two.

[Commentary: WayTooHigh.com]

"Study Looks at Merchants’ High Credit Card Fees" (The Journal Record)

"Crude-oil Futures Hit New High Above $83 a Barrel" (via MarketWatch)

With new record gas prices, motorists are forced to more often than ever have to use plastic, rather than pay with cash, as the amount of each fill-up rises. This means that in many cases, the credit card associations' member banks are reaping even more grossly-inflated interchange fees at the expense of all consumers; they continue to reap windfall profits during this national economic energy emergency, and, seemingly, nobody is noticing?

[Commentary:WayTooHigh.com]

"Interchange Fees Are Really "Sky High" (Commentary:WayTooHigh.com)

During an evening flight last evening down from the Bay Area, the pilot on American Airlines announced that they were conducting a test for a new service and that only credit and debit cards would be accepted for in-flight purchases. Imagine that - no cash. The flight attendants used wireless credit card terminals to swipe the magnetic strips on the cards.

[Commentary: WayTooHigh.com]

Barrel of Gas at $81.90 !!!

More windfall profiteering for interchange charges at the gas pumps; A barrel of gas surged to new trading highs today of $81.90 on the New York Mercantile Exchange. How are the credit card associations and its member banks justifying their extraordinary profiteering during our nation's economic energy crisis?

[Commentary: WayTooHigh.com]

Super-charged Greed! (Commentary, WayTooHigh.com)

[repost from April 11, 2006]

"Visa's IPO Use of Proceeds Plan and Interchange Overview (commentary, WayTooHigh.com)

Many of the same banks that owned MasterCard®, own Visa®. And, as with the earlier MasterCard IPO, according to a Reuters news report, Visa plans to set aside a portion of its IPO windfall to open "an escrow account to help cover potentially hefty legal bills."

As mentioned in the prior posting, Visa explains in its SEC filing that among the risk factors for an investment in the company is that they may become "insolvent" due to the merchant's interchange litigation victory. Is this a possible reason for the IPO - to transfer liability onto shareholders and restructure the banks ownership to limit their liability? After all, according to the filing, "Interchange fees are often the largest component of the costs that acquirers charge merchants in connection with the acceptance of payment cards."

For those unfamiliar with our battle against Visa, MasterCard and many of its member banks, here are some points of interest:

• The payment card interchange fee and merchant antitrust litigation alleges anticomptitive, antitrust violations by Visa and MasterCard, which is made up of thousands of banks
• Many banks sat on both the Visa and MasterCard boards and stand accused of illegally fixing the interchange fees by agreement and in coordination with each other.
• Many electronic payment transactions were handled by the same banks, as the issuer and acquirer, meaning they get fees twice.
• There is no real competition; Visa and MasterCard maintain an 80% market power over electronic payment processing.
• Interchange fees have more than doubled in the last 10-years.
• Few customers know about interchange fees because it is virtually impossible for merchants to tell customers what the exact fee is.
• Every consumer pays for these hidden credit card fees, even cash customers because the cost is built into every product - a gallon of milk bought with cash by a mom is also paying to award premium signature card holders' bonus mileage to Europe.
• Interchange fees are one of the worst and most unfair fees paid by American consumers - it's more than six times what people paid in ATM fees.
• Huge profits: Even though the actual cost to process a $1 transaction is virtually the same as that of a $10,000 transaction (buy a soda or a Cartier watch), the interchange fee is based on a percentage of the total. Even Realtors lowered their commissions when housing prices soared.
• The interchange fees are far higher than the actual cost o the transaction they are meant to pay for.
• The technology used to process credit card transactions are today more efficient and less expensive.
• Why are interchange rates higher in the U.S. in most other industrialized nations?
• U.S. interchange fees are close to 2%, while other countries, like the UK are typically 0.7% and Australia averages 0.55%.
• Did you know that merchants are forbidden from disclosing to consumers the fees that are charged?
• Behind closed doors, Visa and MasterCard meet to increase these anti-competitive hidden fees. It seems they are regularly being raised, not lowered as technology creates more efficiencies for speedier electronic payment processing.
• We understand that these price-fixing practices are in violate antitrust laws.
• Few things are more anti-competitive than the credit card market - virtually every other marketplace lowers prices because of competition.
• Study the market dynamics of other counties with significantly lower interchange rates to understand that the banks and card association are still doing well and they have not experienced disruptions in transaction handling processes, despite lower rates.
• We assert that the banks which make up Visa and MasterCard have colluded to set these fees which in any other industry would be in violation of federal antitrust laws.

Repost from Prior Summary - Briefing on Interchange Issues (WayTooHigh.com)

[Commentary: WayTooHigh.com]

"Visa, Inc.® FORM S-4 SEC Registration Statement" (click here to view the SEC filing)

It weighs in at more than 400 pages, but among the critical pages to read begin on page ten [risk factors] of Visa, Inc's® S-4 Registration Statement in advance of its planned IPO early next year.

We remember years ago when the banks explained that interchange fees helped cover losses from fraud, yet that concern is way down on the factors threatening this offering. Instead, this phrase, "...cause us to become insolvent" is higher on the list of risks and is associated with the merchant interchange multidistrict litigation, which might force Visa Inc. to pay substantial damages.

Last evening, CNBC asked whether Bank of America® was using its new [nearly doubling] $3.00 ATM surcharge for non-customers to bail out from the sub prime mortgage disaster? A bigger question is whether the banks, many of which had also owned MasterCard, and reaped billions after its IPO, are using this IPO to not just bail out from their mortgage malaise, but to run for the exit and pawn off the potential litigation liability on to the public? But, remember, the alleged crime of illegal price-fixing by agreement did not occur when the public owned the stock, but rather, under the banks watch.

The CNBC segment discussed how non-customers using the Bank of America ATM network are paying fees twice; talk about double dipping. The same happens billions of times each day with the Visa and MasterCard® payment network too. Interchange fees are paid twice, once to the issuing bank, and then to the acquiring bank, and in many cases, it is the same bank!

[Source: WayTooHigh.com]

"Visa Wins OK From SEC As It Readies IPO" (via Reuters)

"Crude Futures Mark First-Ever Close Above $80" (MarketWatch)

"Bank of America Raises ATM Surcharge" (USA Today)

The Robber Barron's Had Nothing On This Interchange Fee Heist (Commentary, WayTooHigh.com)

This is shocking to merchants; it doesn't make sense, but it is making lots of dollars....

Crude-oil futures climbed into uncharted territory and have now reached $80.00 a barrel...

The result is record, windfall profiteering by Visa®, MasterCard® and its member banks.

Why exactly are interchange fees based on a percent of each transaction.

What, do they think they are selling real estate?

Even real estate brokers lowered their 6% standard commissions when housing prices reached record levels.

What are the banks doing to help during this fiscal energy crisis.

Our earlier proposal to the CEO's of Visa and MasterCard to rescind interchange fees at service stations remains one immediate solution.

See these prior WayTooHigh.com related posts

"Credit Card Fees Siphoning Gas Stations’ Profit" (The Times-Tribune)

An Orgy of Credit Card and Bank Profiteering From Record Pump Prices (WayTooHigh.com)

Oil Surges Past Record High, Above $78 a Barrel; Yields More Windfall Profiteering For Banks (WayTooHigh.com)

Visa® and MasterCard® About $1.50 Per Fill-up

Open Letter to Visa® CEO: suspend gas station credit card interchange fees to help motorists save ~$1.50 per fill-up

"More Windfalls At The Gas Pump" (Forbes)

[source: WayTooHigh.com]

"BASIC INSTINCTS; Cards Train Teenagers To Use Plastic" (NYTimes.com, Aug 25th)

Debit cards targeted at teens could train them how to handle money, but there are better ways...

"Oil Hits Record Near $80 On Tight Supply" (via Reuters)

As our nation faces another economic energy crisis, what exactly are Visa®, MasterCard® and its member banks doing to help? The reality is that as gas reaches $80.00 a barrel, the service stations are forced to pay in most cases, a percent of every tank fill-up in interchange fees. The result is that the banks are realizing a huge multi-billion dollar windfall profit at the expense of motorists and all consumers. Is this how they are helping to cover their real estate loan losses?

Let us keep in mind that the financial credit crunch caused by sub-prime loans is affecting the banks. The Wall Street Journal (Sept 8, page B-14) )reported that the losses to banks could be about$100 billion. Yes, the banks have reserves, but we wonder how that will be impacted when our litigation is resolved; from where will the money come from?

[Commentary: WayTooHigh.com, via news report from Reuters]

"The Dark Secrets of Debit" (Consumer Reports.Org)

The September issue of Consumer Reports details what we have long been warning, that banks try to force consumers to get debit cards, but use it as a credit card.

Click here to view the entire story about "why do banks push debit cards for every purchase you make? Because they stand to make millions--largely at your expense..."

"Debit rewards: More glitter than gold."

According to Consumer Reports, "a Visa Extras roundtrip airline ticket from the U.S. to Europe would require 200,000 points--or $400,000 worth of spending on those debit cards for a ticket with a value capped at $1,100."

[Source, via Sept issue of Consumer Reports.Org]

The Pigs of Greed (Commentary: WayTooHigh.com)

You would think that $40,000,000,000 [ that's 40-billion dollars in annual interchange fees] would be enough to fill the bellies of greed by the two leading credit card associations and its member banks, of which are the defendants in our antitrust price-fixing litigation, but no.

Here is another example of unbridled greed and growing buffet of piggishness.

Last Saturday, we receive a call from a customer in Florida who was not pleased with the nearly 1,000 pictures we scanned for her. Like all orders, it was received, scanned and mailed back the same day, but, she said the scans were "too dark."

Because ScanMyPhotos.com retains all images for 60-days, a quick look at her order revealed that the scans were perfect. But, we've been in business for 17-years because "word-of-mouth" and credibility matters most. In this case, without any discussion, we advised the customer that an instant full-refund was just applied to her charge card. We took a full loss on the order [$49.95, plus delivery charges]. When we issued an electronic refund, it occurred to us just how piggish the merchant interchange cartel is. While we issued a full-refund, the interchange fee charged, remained.

FACT: There are no refunds to cover merchant costs for interchange fees when refunds are initiated.

Nice going, Visa and MasterCard! Can't wait to read read your next PR and marketing profiles about how business friendly you are.

[Source: Commentary, WayTooHigh.com]

We Pause: In Memory of "9/11"

[Photo: EPICCUSA.COM]

In tribute to those who lost their lives, family members and to all of us, we pause in memory of the events of September 11, 2001.

For those WayTooHigh.com readers who might not be familiar with several of our prior grassroots advocacy campaigns, including "Fly With Courage," where we flew from Barcelona to New York City and Los Angeles on September 11, 2002, when few passengers had the courage to travel, we share these memories with you. On that day, the airlines and our nation's commerce were again threatened due to fears placed on the first anniversary since "9/11." The planes we traveled on were empty, the immigration and customs areas empty, airports empty, but our message was heard that it was safe and vital to support the airlines and The Big Apple - as part of our efforts, when we arrived in Los Angeles late that evening, we were profiled on ABC News.

Like everyone, and as native New Yorkers, we too were moved by September 11, 2001 and spent the next two months working to launch a campaign that brought thousands of people from across the country to The Big Apple on Veteran's Day - two months to the day after "9/11." Our journal from that emotional pilgrimage to support the airlines and commerce in New York City can be seen at: epiccusa.com."

(Photo: EPICCUSA.COM)

The City of New York invited us to Ground Zero - see photos

Letters from [current presidential candidate and former] Mayor Rodolph Giuliani, [current SEC Chairman] Chris Cox and others are also posted on the site.

[Source: Carl Berman and Mitch Goldstone, co-founders of EPICCUSA.COM and co-editors of WayTooHigh.com - The Credit Card Interchange Report]

Presidential Candidate Christopher Dodd on Interchange Fees (via UnfairCreditCardFees.com)

Presidential candidate and Senate Banking Committee Chairman Christopher Dodd, D-Conn, recently addressed interchange fees during a Senate hearing. Click here for complete transcript.

"And lastly, I would be remiss if I did not mention one issue likely not to be explored today-- credit card interchange fees. These fees are imposed on merchants and consumers by banks and card associations when a credit or debit card is used to pay for a purchase. Interchange fees are growing exponentially– and the costs associated with these fees are expected to be between $30 and $40 billion this year alone. These opaque fees, assessed on merchants, are passed on, in part or whole, to consumers who have no knowledge or understanding that a fee is even a part of the cost of bread or milk, or any other consumer product. I believe that this is another area that this Committee should examine as part of the series of hearings on credit cards. With that, I would like to introduce the witnesses before the Committee."

[Source: UnfairCreditCardFees.com link]

Presidential Candidates' Position on Credit Card Fees

We will begin posting comments and views as the presidential candidates begin to address credit card fees.

As the first entry, we came across this blog posting from myDD.com about former Senator John Edwards' support of lowering credit card fees. The blogger posted the below comments to address additional concerns that would help the candidate "win over small business owners:"

See this link for complete comments by the Blogger.

Assure that all credit card fees are cost-based.

In short, any fee charged by a credit card company must a) be justified, and b) reflect the cost of whatever service is being performed that the fee is being charged for. This is an issue for the Consumers Union's credit card agenda and for merchants especially. And it's merchant fees where Edwards could find new headway.

If you haven't followed my diaries on the subject of the interchange fee, see my first one here: "The Biggest Reverse Robin Hood Scheme You've Never heard Of." If you've never heard of it, that's not your fault -- the banks which control the credit card associations prefer it that way. So while proposal #5 is just a good idea in any case, it might carry specific political benefits if he put some emphasis on that fee in particular. In practice, this would likely remove the interchange fee from the reward card equation. Rewards on Gold and Platinum cards come from the fees incurred by these transactions. That's also where the banks' never-been-higher profits derive. But if it costs $.50 to send the payment through, don't worry -- they'll take a lot more.

I'm not sure where now but I read recently that only 13% of interchange fees actually goes towards paying the processing transactions -- the rest goes to fund rewards as mentioned above as well as advertising and junk mail. Transactions should be no more expensive than they need to be. The fee as it was originally created was a necessary measure to cover costs. No one here is saying there shouldn't be any interchange fee (although some foreign governments are considering just that).

And though the fee is charged to businesses large and small that have merchant credit card accounts, it is a consumer issue, too because it drives down your purchasing power. It is an artificial form of inflation, where the premium above regular prices goes into the pockets of bank shareholders and toward their next free airline ride. Interchange fees are reflected in the price of nearly everything you buy. As much as $2 of every $100 you spend goes to card issuers -- no wonder interchange has risen a staggering 117% since 2001. Moreover, bringing this fee back to what it was all about in the first place would give smaller merchants more pricing flexibility -- another way to compete for your business, and maybe save you a bit of money. The current system costs the average American family more than $300 a year in interchange fees.

This might also be a good way to reinforce his opposition to the bankruptcy bill, and keep up the fight for working Americans. He has been a good advocate against the 2005 bankruptcy bill, but not everyone has forgotten his voting for a bad one in 2000 that Bill Clinton had to veto. I noticed the Dodd campaign is pushing a quote from Paul Wellstone in 2001, who said the bill "punishes the vulnerable and it rewards the big banks and credit card companies for their poor practices ... We are heading into hard economic times and we're going to make it hard for people to rebuild their lives."

Small business owners might be where Edwards can make up the most support over the next few months I think we can all agree we need bankruptcy reform, and credit card reform. And I know when it comes to merchants, I know how the rising interchange fee is hurting them. If Edwards wants to make some inroads with a group that might be skeptical of him, I can think of no better way than by bringing them into his fight against the credit card industry.

[Source, via MyBB.com - link: http://www.mydd.com/story/2007/9/7/144828/2751

"The Economic Law of GREED" (Commentary: WayTooHigh.com)

With gas prices again surging to record highs - a barrel today is costing more than $77.00 - it seems that even ExxonMobil, Shell and others are somehow able to lower the cost at the pumps.

But, look at the huge merchant interchange fee windfalls and exaggerated profiteering as motorists, truckers and others fill-up at the pumps and are forced to use plastic to charge. While the interchange fees maintain their steep rates, gas prices have actually declined. So, how is it that with gas prices at record highs, the price at the pump (in So. Calif) is about $2.75 for regular?

When a barrel was hovering at about $70.00, the pump price was about $3.25 and more. The Question is: what is artificially keeping gas prices down, and why aren't the credit card associations and member banks also helping to lower their fees too? The Answer, in our opinion: A classic case of illegal price-fixing.

What happened to MasterCard's® plan to cap interchange fees at the pumps to $50.00, and why has Visa® been silent on this issue, and if they agree to putting an interchange fee cap at the pumps, why not on all transactions too?

Interesting Question: Why Only Cap Interchange Fees At The Pumps? (WayTooHigh.com)

[Commentary: WayTooHigh.com]

Will Interchange Fees Increase to Bail Out the Banks? (Commentary:WayTooHigh.com)

Part II

With the growing turmoil in the financial markets, due to unchecked risky loan schemes, we worry that the banks might use their market power to raise interchange fees. Is this possible? Because of the 80% monopolistic anti-competitive grasp that the credit card associations' member banks wield, we would not be surprised.

Angered, yes.

Surprised, no.

Just today, it was reported that Countrywide's stock price plunged below the $18 price that Bank of America may plan to use as the bench mark for its announced $2 billion investment in the largest mortgage lender in the U.S. With all the attention to the damage caused by loans to people earning $40,000 a year, but "qualifying" for $800,000 homes, the banks will be forced to do something. They will refill their swimming pools of cash if the Visa® IPO moves forward, but even that is questionable, especially as they prepare to identify the risk factors to their planned IPO in early 2008.

According to Reuters, the Mortgage Bankers Association announced that "the rate of home loans in foreclosure rose to a record high in the second quarter of 2007 as more homeowners in California, Florida and other states could not refinance their adjustable-rate mortgages."

PART I

Will Merchant Interchange Fee Cash Cow Be Used To Bail Out The Banks? [WayTooHigh.com commentary]

[Commentary: WayTooHigh.com]