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Wal-Mart Sues Visa For $5 Billion For Rigging Card Swipe Fees
Hugh Pickens DOT Com writes: "Reuters reports that Wal-Mart has sued Visa for $5 billion, accusing the credit and debit card network of excessively high card swipe fees. Wal-mart is seeking damages from price fixing and other antitrust violations that it claims took place between January 1, 2004 and November 27, 2012. In its lawsuit, Wal-Mart contends that Visa, in concert with banks, sought to prevent retailers from protecting themselves against those swipe fees, eventually hurting sales. 'The anticompetitive conduct of Visa and the banks forced Wal-Mart to raise retail prices paid by its customers and/or reduce retail services provided to its customers as a means of offsetting some of the artificially inflated interchange fees,' says Wal-Mart in court documents. 'As a result, Wal-Mart's retail sales were below what they would have been otherwise.' Interchange fees, the industry term for card-swipe fees, have been a major point of contention between retailers and banks. The fees are set by Visa and other card networks and collected by card-issuing banks like J.P. Morgan Chase & Co. Retailers have argued that the fees had been set too high due to a lack of competition with the two payment industry giants.
Wal-Mart also took a shot against Visa over payment card security. Data breaches last year at Target Corp., Neiman Marcus and others have drawn attention to the country's slow adoption of card technology that uses computer chips and PIN numbers and is seen as less susceptible to fraud than the current system of magnetic stripes. 'Wal-Mart was further harmed by anti-innovation conduct on the part of Visa and the banks,' says the lawsuit, 'such as perpetuating the use of fraud-prone magnetic stripe system in the U.S. and the continued use of signature authentication despite knowledge that PIN authentication is more secure, a fact Visa has acknowledged repeatedly.'"
Wal-Mart also took a shot against Visa over payment card security. Data breaches last year at Target Corp., Neiman Marcus and others have drawn attention to the country's slow adoption of card technology that uses computer chips and PIN numbers and is seen as less susceptible to fraud than the current system of magnetic stripes. 'Wal-Mart was further harmed by anti-innovation conduct on the part of Visa and the banks,' says the lawsuit, 'such as perpetuating the use of fraud-prone magnetic stripe system in the U.S. and the continued use of signature authentication despite knowledge that PIN authentication is more secure, a fact Visa has acknowledged repeatedly.'"
Bitch about Walmart employees all you want, but if you want to see a perfect model of a *NON* flashy HQ and *NON* flashy executives who practice what they preach, then Walmart is a perfect example of how to do things.
AntiFA: An abbreviation for Anti First Amendment.
Wal-Mart competes primarily on the illusion of price through loss leaders on a minority of items. The majority of their stock is actually the same or more expensive than many of their competitors. The company's actual strengths are logistics and marketing.
I'm rather sure that Walmart doesn't pay the full 3% that Visa/MasterCard like to charge for transactions
No, they don't in a lot of cases but the amount they do pay is VERY substantial. We're literally talking about billions of dollars here no matter what exact amount Walmart pays.
but when you look at the overhead of transactions in the cryptocurrency markets, you can see how ridiculously overpriced the credit card transactions are. The costs here are near 0, and so should the charges be
The cost of credit card transactions are nowhere near zero. Transaction processing in any form is not cheap, even at high volumes. There are significant costs for both on the front end (credit card machines + computers + accounting + banking fees), and on the back end (computers, customer service, accounting, security (yeah, ironic I know), billing, payment transaction costs, marketing, and more). While I agree completely that credit card companies overcharge, the assertion that their costs are anywhere close to zero is not supported by the facts. Building a payment infrastructure like the one Visa has costs many billions of dollars to build and more billions to operate on an ongoing basis.
Furthermore if you are going to make the absurd comparison between bitcoin and credit cards, you need to account for ALL the costs including currency exchange fees, exchange rate risk, opportunity cost, infrastructure cost (which bitcoin lacks), customer service (which bitcoin lacks), counterparty risk (no one is going to give you a refund), accounting, and the rest of them. Once you account for what bitcoin really costs and what it lacks, the cost of it is actually higher in most cases on a risk adjusted basis. (and if you aren't accounting for risk then you are being really really foolish)
yeah, meanwhile all the heroic family owned businesses in NYC are fighting a new proposed law to give employees at any business with more than 5 employees 5 paid sick days per year separate from vacation days
and i hear they all offer at least some health, pension benefits and the ability to be promoted into management of the family business
Aldi is also a very interesting case study in store efficiency.
Most of their stores that I have seen have four aisles. Coming in the door dumps you into aisle 1. Most traffic in aisles 1 and 3 is heading to the back of the store and most in aisles 2 and 4 is heading to the front.
Every one of the store products has at least two copies of the barcode on the package, and many times more than two. In one extreme case, I saw a barcode turned into package decoration by wrapping it all the way around the bag.
Of course, that last one wouldn't work well if things double-scanned, so the cash registers have a duplicate code lockout on them, and the cashiers are trained to group and count, and use the '@' button on their cash registers.
Checkout lanes have very long conveyor belts on them so that 2-3 customers can be unloading their carts at once without getting in each others' way.
Cashiers sit, rather than stand, in order to lower fatigue and improve productivity.
The till is arranged like a vertical file with a lid that pops open in front of the scanner. This is because, with the cashier seated, a cash drawer would collide with him/her requiring him/her to move his/her seat to slide it all the way open. It pops open driven by a spring at the appropriate moment in the transaction, and closes with less effort than a cash drawer, again, reducing fatigue.
Oh, and last but not least, staff are actually paid decently.
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