It's been a few weeks since my last entry and to be honest -I've missed you. I was in Africa and in Europe for awhile (roughing it actually). While traveling I had the opportunity to discuss two of the three issues that I've been talking about over the last few weeks with the international community.
The monopoly of credit card companies doesn't exist in the same way in other countries around the world....bottom line.
As I traveled, I made it a point to visit frequently w/ small business owners, retailers, restaurants, and business people. I would often query them about their business accepting credit cards, and as expected most often they didn't have a problem with accepting them.
I pressed them about the fees they paid to process credit cards, and interestingly they said the fees weren't excessive and that the government protected them from being gouged.
I brought up the fact that American businesses pay the highest fees in the world. The responses were startling. One woman who owned a travel sundry store in Spain said, "Americans pay more for many things, and most of the time they get less. Look at American Health Care, so expensive no one can afford it. You can't get much of what you can't buy-huh."
This response was in stark contrast to the normal response that American's have to the same question. Most often Americans can immediately tell you how much they paid in fees last quarter, month, or year. And the amounts are astronomical -- 78,000.00 (3.6%) etc..
Some figures from a recent article in the Boston Herald:
http://www.bostonherald.com/...
The two major credit card companies, Visa and MasterCard, control 80 percent of the U.S. market. Without government control, there is nothing to stop them from doing just what they want.
Credit card companies collected an estimated $48 billion in interchange fees last year. That’s money taken directly from the bottom lines of small businesses. For some retailers, it could have made the difference between hanging on through a difficult year or having to close their doors for good.
Operating like the uncontrolled monopolies they are, card companies dictate interchange fees on a non-transparent, non-negotiable basis. Small businesses often find themselves paying higher rates than larger operations, and all retailers are subject to rate hikes without notice or recourse.
Consumers, of course, bear the brunt of these fees. Businesses can only absorb them for so long and are then forced to pass the expense on to their customers.
I've always found travel an amazing way to gain perspective, but most recently the perspective I'm forced to confront is that the American Ideals I was sold as a child, have been systematically dismantled.
Why do I care about something like credit card fees? Because in essence they're anti-American!
It's at the heart of what is wrong w/ our system. When a monopoly can charge whatever rates it wants, and crush not only competition, but American small business the American Dream is little more than a fake picture of a 5 star resort, used to sell a 2 star timeshare.
It's about time that politicians got off the take from the very companies that aggressively abuse their constituents, and take up for us.
With pending financial legislation, and pending credit card legislation, let's make sure that politicians understand it's time they helped the struggling entrepreneur that in essence defines America.
Tell them to give our small businesses a hand...
Get the Behemoth of Visa / Mastercard of their backs!
For more info on the bad actions of the CC companies I'm including a few links!
http://www.pondtrademag.com/...
How Visa is Tricking Us Out of Our Money and Hurting Consumers & Merchants
http://moneycentral.msn.com/...
http://www.nytimes.com/...