CC FIRE Fight

[don]

US 'lobbied Russia on behalf of Visa and MasterCard'

The US lobbied Russia this year on behalf of Visa and MasterCard in an attempt to ensure the payment companies were not "adversely affected" by new legislation, according to American diplomats in Moscow.

A state department cable released this afternoon by WikiLeaks reveals that US diplomats intervened to try to amend a draft law going through Russia's Duma. Their explicit aim was to ensure the new law did not "disadvantage" the two US firms, the cable states.

The revelation comes a day after Visa – apparently acting under intense pressure from Washington – announced it was suspending all payments to WikiLeaks, the whistle-blowing website. Visa was following MasterCard, PayPal and Amazon, all of which have severed ties with the site and its founder Julian Assange in the last few days.

The companies have justified their decision to stop donations on the grounds that WikiLeaks is acting "illegally". Each has quickly become the target of sustained online revenge attacks by disgruntled hackers, with mastercard.com paralysed today.

The cable, dated 1 February 2010, states that the Obama administration took up the companies' plight with senior Russian government officials. Earlier this year Moscow unveiled plans to create a new National Payment Card System (NPCS) that would collect all credit card fees on domestic transactions – depriving Visa and MasterCard of a major chunk of revenue.

A consortium of state-owned Russian banks would administer the system and collect processing fees "estimated at $4 billion a year", the cable claims. Additionally, sending payment data abroad would be forbidden under the law going through Russia's rubberstamp lower house of parliament – another potential blow to the US credit card companies.

In the cable Matthias Mitman, a US diplomat specialising in economic affairs, and based at the Moscow embassy, urged Obama's presidential commission on Russia to take up the issue. Obama agreed to found a new bilateral commission with the Russian president, Dmitry Medvedev, as part of the reset in US-Russian relations.

Mitman comments: "This draft law continues to disadvantage US payment card market leaders Visa and MasterCard, whether they join the National Payment Card System (NPCS) or not. If they join, the NPCS operator will collect the fees, leaving them to collect processing fees only when card-holders travel abroad – a tiny section of the market.

"If they do not join but choose to compete with NPCS cards, they will have to set up payment processing centers in Russia, a very large investment in itself, and compete against a system likely backed by the largest Russian state banks."
The answer, Mitman suggests, is for the Obama administration to actively bat for Visa and MasterCard. "While the draft legislation has yet to be submitted to the Duma and can still be amended, post will continue to raise our concerns with senior GOR officials.

"We recommend that senior USG officials also take advantage of meetings with their Russian counterparts, including through the Bilateral Presidential Commission, to press the GOR to change the draft text to ensure US payment companies are not adversely affected."

http://www.guardian.co.uk/world/2010...isa-mastercard

[shiny!]

Re: CC FIRE Fight

More power to the Russians on this! Last month I stopped accepting CC's in my e-commerce store because the fees have gotten so outrageous- mostly from those "Cash Back" cards. For those who don't know, the "Cash Back" is paid for by the vendors on top of the regular CC fees.

Now I only accept Money Orders and Cashier's Checks. My loyal customers- the ones who really appreciate what I sell and spend good money- have stayed with me. I'm making fewer sales but at higher dollar value, which saves me a bunch of time, and I no longer feel like I'm slaving for VISA & MC.

[zoog]

Re: CC FIRE Fight

...For those who don't know, the "Cash Back" is paid for by the vendors on top of the regular CC fees...

Didn't realize that, good to know.

The US lobbied Russia this year on behalf of Visa and MasterCard in an attempt to ensure the payment companies were not "adversely affected" by new legislation, according to American diplomats in Moscow...

Can't say I'm surprised, and certainly not the first time American corporations have persuaded our government to put political pressure on other governments to protect their business interests there.

[don]

Re: CC FIRE Fight

gunboat diplomacy, Venezuela, 1905

[ThePythonicCow]

Re: CC FIRE Fight

Last month I stopped accepting CC's in my e-commerce store because the fees have gotten so outrageous

It is a bit of an outrage in my view that the Credit Card companies can and do force you to hide their fees.

If you could calculate and display the CC fee for the offered card, in the same way you might display the shipping fee (ground, air, overnight, whatever) the customer desired, then the customer could decide whether to pay an extra 2, 3, 4, whatever per-cent to use their card rather than send a check or money order.

[ThePythonicCow]

Re: CC FIRE Fight

gunboat diplomacy, Venezuela, 1905

That image is not showing for me, don. I suspect that the web site hosting that image drops redirect requests coming from an external web page. So I copied the image (I could still see its URL in this present web page's HTML source) to my server.

Here it is:

gunboat diplomacy, Venezuela, 1905

[shiny!]

Re: CC FIRE Fight

It is a bit of an outrage in my view that the Credit Card companies can and do force you to hide their fees.

If you could calculate and display the CC fee for the offered card, in the same way you might display the shipping fee (ground, air, overnight, whatever) the customer desired, then the customer could decide whether to pay an extra 2, 3, 4, whatever per-cent to use their card rather than send a check or money order.

Vendors are not allowed to charge more for CC sales. The CC companies prohibit it. If you see a business charging extra for CC sales, they are violating the terms of their Merchant Services agreement.

Vendors pay a percentage of each sale, plus extra percentages for "Cash Back" cards, which hit them two months after the sale, plus extra percentages for "Non-Qualified" cards (anything from debit/credit cards, to business cards, to foreign-issued cards), authorization fees, transaction fees, gateway fees... One month when my sales were low and I got a bunch of Cash Back fees from sales two months prior, the total fees were 10% of my gross! That was when I said "Enough!"

PayPal is even worse. They aren't subject to any banking regulations at all. They are notorious for withholding deposits from vendors, and even withdrawing monies after depositing them with no explanation as to why.

The CC companies are greedy SOB's. Whether you're a customer or a vendor, they take their pound of flesh coming and going- hoping that no one gets too upset to play their game anymore. I'm glad the Russians are standing up to them!

[ThePythonicCow]

Re: CC FIRE Fight

Vendors are not allowed to charge more for CC sales. The CC companies prohibit it

That's what I was referring to. Yes, it's an outrage.

PayPal is even worse.

Yes.

[flintlock]

Re: CC FIRE Fight

I've long been on the fence about accepting credit cards in my business. Stories like this convince me I've made the correct choice. I have built up a large base of loyal customers who don't seem to mind.

[shiny!]

Re: CC FIRE Fight

I've long been on the fence about accepting credit cards in my business. Stories like this convince me I've made the correct choice. I have built up a large base of loyal customers who don't seem to mind.

I think you're doing the right thing. The merchant service companies that process credit card sales force you to pay a huge "Early Termination Fee" if you stop taking credit cards before your contract term (usually 3-5 years) is up. Stay independent! That way you can stay flexible.

There are some tricks to surviving these economic times if you're in business for yourself. One is to have your income streams be as diversified as possible. My husband is a teacher. Including my business, I have three part-time jobs, and a plan for another part-time business that I can do on weekends to bring in a little more money.

In case our jobs go up in smoke, we're also working to reduce our expenses and live with as small a footprint as possible. We live in a mobile home that we own outright, so no mortgage or rent payments. We don't spend money on Cable TV or cell phones. Planning ahead for Peak Cheap Oil, we're working to make our "little metal tent" as energy efficient as possible, and we've purchased scooters for commuting instead of using the truck and big old car every day. (My husband's gasoline consumption has dropped from 25 gal/month to 5 gal/month)

I just purchased a book called "Early Retirement Extreme" http://www.amazon.com/Early-Retireme...1915701&sr=8-1 to see if I can learn more ways to trim and live better on less. Ideally, I want us to have a decent quality of life even if we lose half or more of our income.

Disentangling ourselves as much as possible from the mega-corporations like the big banks and credit card companies is part of our strategy for personal independence.