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Showing posts with label mastercard. Show all posts
Showing posts with label mastercard. Show all posts
Wednesday, November 14, 2007
Wednesday, November 07, 2007
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]
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]
Tuesday, November 06, 2007
"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)
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?
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?
Monday, November 05, 2007
The Banks Misguided Fee Adventure (WayTooHigh.com)
Citigroup Inc.®* deflected its attention from prudent financial management and instead became greedy.
This Reuter's picture of CitiGroup's leaving Charles Prince is "price-less."
Look back at the bank sponsored bankruptcy reform law of 2005; it made clearing consumer debt much harder. Fewer people were able to file for Chapter 7 protection, which was aimed to add further stability and protections for the financial institutions. Or, was it just a another sweetheart deal from Washington to its hefty campaign contributors and lobbyists? It helped the credit card industry and handed them billions of dollars while debtors had to pay back these "loans." The "Bankruptcy Abuse Prevention and Consumer Protection Act" was little more than a payoff to the banks. Read more.
While the credit card associations and its member banks were cheering, they lost sight of a much bigger storm - sub prime loans that enabled people earning just $40,000 annually to "buy" $800,000 homes and others to with few assets to flip homes. They became little more than renters who were teased with low or no upfront down payments and no income verification requirements.
This Reuter's picture of CitiGroup's leaving Charles Prince is "price-less."
Anatomy of Greed
Look back at the bank sponsored bankruptcy reform law of 2005; it made clearing consumer debt much harder. Fewer people were able to file for Chapter 7 protection, which was aimed to add further stability and protections for the financial institutions. Or, was it just a another sweetheart deal from Washington to its hefty campaign contributors and lobbyists? It helped the credit card industry and handed them billions of dollars while debtors had to pay back these "loans." The "Bankruptcy Abuse Prevention and Consumer Protection Act" was little more than a payoff to the banks. Read more.
While the credit card associations and its member banks were cheering, they lost sight of a much bigger storm - sub prime loans that enabled people earning just $40,000 annually to "buy" $800,000 homes and others to with few assets to flip homes. They became little more than renters who were teased with low or no upfront down payments and no income verification requirements.
Once the intoxicating, phony interest-only mortgages turned into a devilish nightmare, the banks lost billions. It just cost Charles Prince, Citigroup's CEO his job. But, it already ruined millions of dreams and destroyed lives, except for the few with titanium "golden parachutes." Click here for Reuter's update.
Reuters is reporting that "Citigroup may write off $11 billion of sub prime mortgage losses, on top of a $6.5 billion write-down last quarter." Even MasterCard, had set aside $650,000,000 to help cover its legal liabilities.
Reuters is reporting that "Citigroup may write off $11 billion of sub prime mortgage losses, on top of a $6.5 billion write-down last quarter." Even MasterCard, had set aside $650,000,000 to help cover its legal liabilities.
Where is the leadership? Where is the ethics? Rather than covering these huge losses, the inexpensive solution was to not to be greedy in the first place.
The new must-read manual for the banking executives are a new edition topic of: The Idiots Guide To Common Sense, and especially The Idiots Guide To Understanding the Sherman Antitrust Act.
Barron's has a feature profile (Nov 4) on MasterCard® that explains more, including what it asserts is the card association's "low balling earnings indications."
Today, the thousands of banks, which control[ed] MasterCard and own Visa® were thought to have more greed than even the oil companies. The "Bankruptcy Abuse Protection" scheme was wrought with one-sided greed. Now, the mortgage collapse faces similar greed. Both cost billions to address and the newest round, the ongoing misguided fee adventure with anti-competitive merchant interchange rates can become the banks' newest way to squander billions more.
Interchange fees are no longer cost-based - only about 13% of interchange fee costs are used to cover its transaction costs. Along with Visa and MasterCard, the banks too are being accused by us and members of the class action of market power to illegally fix prices. With all their other leaking dikes, a new round of billion-dollar floods is unpreventable and they could again turn to wield their unbridled greed by raiding their interchange cash cow, raising rates and causing more hardship.
The banks rich piggy bank are interchange fees - a $40 billion annual hidden tax on the economy. They schemed in their misadventure to dump their legal liabilities by selling off part of MasterCard on the public. Now a much larger IPO is on the horizon to do the same with Visa. Washington and our economy should take notice. Like with MasterCard, Visa is warning that they too could face insolvency if our litigation is successful.
With the loss of leadership jobs at Merill Lynch and Citigroup and many newly homeless customers in defaults and billions in existing fiscal mismanagement, we urge our readers to prepare for the next economic bail out. This time, it is not about mismanagement, but monumental greed. The new looming concern are those corporate chieftains who are looking more Al Capone-like as a modern day "untouchable" symbol of the collapse of law and order. But, don't look for the banks to be robbing themselves to cover their misadventures; interchange fees are their hedge that we must all be very worried about.
Today, the thousands of banks, which control[ed] MasterCard and own Visa® were thought to have more greed than even the oil companies. The "Bankruptcy Abuse Protection" scheme was wrought with one-sided greed. Now, the mortgage collapse faces similar greed. Both cost billions to address and the newest round, the ongoing misguided fee adventure with anti-competitive merchant interchange rates can become the banks' newest way to squander billions more.
Interchange fees are no longer cost-based - only about 13% of interchange fee costs are used to cover its transaction costs. Along with Visa and MasterCard, the banks too are being accused by us and members of the class action of market power to illegally fix prices. With all their other leaking dikes, a new round of billion-dollar floods is unpreventable and they could again turn to wield their unbridled greed by raiding their interchange cash cow, raising rates and causing more hardship.
The banks rich piggy bank are interchange fees - a $40 billion annual hidden tax on the economy. They schemed in their misadventure to dump their legal liabilities by selling off part of MasterCard on the public. Now a much larger IPO is on the horizon to do the same with Visa. Washington and our economy should take notice. Like with MasterCard, Visa is warning that they too could face insolvency if our litigation is successful.
With the loss of leadership jobs at Merill Lynch and Citigroup and many newly homeless customers in defaults and billions in existing fiscal mismanagement, we urge our readers to prepare for the next economic bail out. This time, it is not about mismanagement, but monumental greed. The new looming concern are those corporate chieftains who are looking more Al Capone-like as a modern day "untouchable" symbol of the collapse of law and order. But, don't look for the banks to be robbing themselves to cover their misadventures; interchange fees are their hedge that we must all be very worried about.
*[Citi is is a named defendant in our merchant antitrust litigation]
Background Links
"Visa's IPO Use of Proceeds Plan and Interchange Overview (commentary, WayTooHigh.com)
Consolidated Amendment to Class Action Complaint (WayTooHigh.com)
Letter to Judge John Gleeson, Re Challenge to MasterCard's Stock Reclassification (WayTooHigh.com)
[commentary: WayTooHigh.com]
Sunday, November 04, 2007
WayTooHigh.com Now Powered By FeedBurner
To ensure you receive real time, live updates from WayTooHigh.com, please review the various feeds on the right side. WayTooHigh.com is now powered by FeedBurner, the leading provider of media distribution and audience engagement services for blogs and RSS feeds. With this addition, WayTooHigh.com will now better commercialize, promote, deliver and share our daily news and commentary updates with even more readers who are following this multi billion dollar antitrust litigation against the two leading credit card associations and its member banks.
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.
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.
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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