speaking of credit cards

[JFeig]

I caught this news article this morning on Yahoo via Reuters:


Retailers sue Visa, claiming price fixing

A group of supermarkets and drugstore chains has sued Visa International and its Visa USA unit, accusing the credit card association of price fixing, restricting competition, and keep companies from negotiating lower rates.

In the lawsuit, which was filed late Thursday in U.S. District Court for the Southern District of New York, the retailers contended that Visa's restrictions allowed it to extract "supracompetitive, artificially inflated" fees, and maintain "monopoly power" in some markets.

San Francisco-based Visa did not immediately return calls seeking comment.

Companies filing the lawsuit included grocers Albertsons Inc. (NYSE:ABS - news), Kroger Co. (NYSE:KR - news), Safeway Inc. (NYSE:SWY - news) and Ahold USA Inc., a unit of Netherlands-based Ahold NV (AHLN.AS), as well as drugstores Walgreen Co., WAG.N> Jean Coutu Group's (Toronto:PJCSVA.TO - news) Eckerd Corp., and Maxi Drug Inc.

The plaintiffs are seeking an injunction and treble damages from Jan. 1, 2004 to the present.

The lawsuit accuses Visa of unlawfully setting interchange fees charged to merchants each time customers use Visa credit card to make purchases, and imposing rules that preclude merchants from negotiating lower fees.

The issue is significant as consumers increase their reliance on cards, even on small purchases.


The outcome will be intresting........

I agree that the agreement we sign with the credit card firms are "Unilateral" in their favor and that there is no real negotiating with them (interbank charges, unscannable card charges, corporate card charges, etc).

[Bob Carter]

Jerome-What these behemoths are suing over is the fact that they want to exercise their significant size advantage and obtain lower rates for themselves, not you or I.

What easily could happen is that they prevail (and they probably will) and they lower their rates substantially due to their size.

Want to hazard a guess what will happen to your rate and my rate?

The processors, as any other business, will simply pass on the additional costs to the people without the ability to negotiate for themselves.

This might be one example of we need to be careful of what we wish for.

How many times do we decry the M's of the world for their "unfair" advantage in buying so much cheaper than we? And we all rail at the fact that "extra" is passed on to us?

Well, hold onto your hats

[JRB]

Had a customer about six months ago purchase a package of picture hangers for 85 cents. Handed me his Visa card.

John

[EllenAtHowards]

Do remember that Visa ain't necessarily Visa anymore. Now it can be non-paper checks instead. My check card says Visa, it is processed like Visa (which is to say that no PIN number is required for the transaction) but there is no monthly statement, 21% carrying charge, etc. It just comes right out of my checking account. So we are not necessarily watching the entire country buying on next month's money (or next year') We have been watching our number of checks drop dramatically. Instead of depositing 6-10 checks a day, we now deposit 6-10 checks a WEEK! The times they are a'changing.(again)

[JFeig]

Ellen, what you have is a "debit card".