Wal-Mart Sues Visa For $5 Billion For Rigging Card Swipe Fees 455
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.'"
Walmart employees, rejoice! (Score:5, Funny)
Re:Walmart employees, rejoice! (Score:5, Interesting)
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.
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I am sure they practice giving themselves minimum wage. link [wikipedia.org]
Re:Walmart employees, rejoice! (Score:5, Interesting)
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
Re:Walmart employees, rejoice! (Score:5, Informative)
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
Walmart is no longer a family owned business. It is one of the worlds largest publicly traded companies. It's been a long time since Sam Walton and his values ran Walmart. As for benefits, they have been charged, repeatedly, about how they intentionally hold rank and file employees below the hours needed to qualify for benefits. So, if they have those great benefits that you list, it's not for the majority of the employees of the largest employer in the US.
Re:Walmart employees, rejoice! (Score:5, Informative)
Tying benefits to employment is stupid (especially with how often people are changing jobs these days). If everybody bought health insurance on their own (or had it provided by the government), then walmart wouldn't see a cost savings by hiring 2 people to work 20-30 hours instead of one to work 40-60, in fact they would probably see a savings since training costs would be reduced, turnover might be reduced (people will stop ditching the PT job as soon as they find something FT), and you might end up with a more effective employee.
IIRC, this essentially came as an unintended consequence of some government wage controls during/following the war. Companies couldn't raise wages to attract talent, so they started offering non-wage benefits. Now it is standard for it to come from your employer, while people buying their own insurance get screwed by high prices. Hard to break free of that system though...everybody expects the benefit, and it costs the company less to provide the benefit than they would have to pay you extra to afford your own insurance. So skilled/in demand workers keep getting their benefits, while the easily replaceable laborers get 30 hour work weeks.
Re:Walmart employees, rejoice! (Score:4, Informative)
"Hard to break free of that system though...everybody expects the benefit, and it costs the company less to provide the benefit than they would have to pay you extra to afford your own insurance."
True. Right now, you do not pay income tax on the value of the employer-provided insurance that is provided by the employer (i.e. that which is not charged to you as premiums or deductibles - employers used to pick up most the tab, and still do pick up some of it). It was usually not even possible for you to get a good answer from HR on the value of that. In the past several years, something akin to the value of that untaxed benefit has started appearing on your W-2 (as information only - not included in your taxable income).
McCain floated a plan in the 2008 U.S. Presidential race to slowly phase out that untaxed-benefit, which would ultimately divorce health-insurance from being mostly employer-provided: it would start including the value of the employer-provided health insurance as taxable income to you, and then provide a tax credit that would cover the majority of this new taxable-income (based on some value of an average health-insurance plan). Over time, that credit would be reduced, under the theory that in a perfect free-market for labor, wages paid would adjust upwards to compensate as previously-health-care-providing employers competed on a tax-neutral playing field against employers that paid 100% in cash (whose employees would purchase their own insurance with after-tax money, just like any other consumer purchase).
This would help to disclose both how much health-insurance costs (theoretically bending the health-case cost curve down), as well as ramping down any tax benefit associated with employer-provided health insurance. Eventually, when there would be no advantage to employer-provided health insurance, people would buy policies on the open market without any connection to their employer, and you would be able to carry that policy with you when you changed employers - no COBRA, because it's not needed.
Of course, that plan did not address all of the other problems with the health insurance market, and of course not all of the problems with delivery of health care in the U.S.. But I liked the plan, because it provided a glide path that seemed to make sense, in reaching a goal of separating the purchase of health-insurance policies from the employer you happen to be working for at the time, when that connection no longer makes any sense.
Re:Walmart employees, rejoice! (Score:5, Interesting)
The Walton family still has control of the company, owning just more than half of its shares.
The Walton family has more wealth than the entire bottom 42% of the US population. http://www.politifact.com/trut... [politifact.com]
They have the control and the wealth. They could pay their employees a living wage and give them decent benefits but it is cheaper to put them on food stamps and Medicaid and have the taxpayer subsidize their employees... this leaves more money for the Waltons.
Re:Walmart employees, rejoice! (Score:5, Insightful)
Small businesses are very very different from large businesses. Most of them are barely scraping by and can not afford to pay somebody to "not work". Every business model is different and in terms of revenue generating vs business support employees the cost varies greatly when people are out.
I want you to imagine your paycheck, right now, whatever it is. Now imagine paying somebody else's paycheck out of that. Now imagine being told that you have to do that even when they call in sick at the last minute. You've just been inside what it's like to run a small business. My wife and I lived on minimum wage for 3 years to make sure we could make payroll every month while starting the business. She now employees 20 people, with vacation time, sick days and benefits and makes about 30% more than she would have if she just went to work for somebody else...without all of the constant risk of bankruptcy. It will now take about 10 years of this income level to make up what we lost (in salary alone) just starting the business in the first place and that's not including the cash investment, which was significant.
But please, tell me again why every business should have to compensate everybody exactly the same. Running a small business is incredibly difficult. Starting one is even harder. 9 out of 10 small businesses fail from LACK of capital. Don't make this more difficult.
If the benefits offered by your employer aren't good enough for you, go somewhere that has the benefits you deserve.
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Maybe it should be harder to start a small business.
If you're paying someone a sub-livable wage, are you giving to society or taking from it?
Other people have to donate resources to support the person making a sub-livable wage, while you profit from the arrangement.
I've worked with small businesses and I know what it's like. But I think that if a business must take from society rather than give to it in order to operate, purely in terms of dollars and cents, then it shouldn't be in operation.
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A ton of people in the food service industry (including casual dining like Applebees), plus a ton of people who drive vehicles for a living (passengers and cargo) are going to be replaced by automated systems in the next 5-15 years. We need to start preparing for it now. But we won't, because politicians don't get elected by telling millions of people that they are pretty much fucked.
Anyone that proposes expanding the Welfare system will be demolished by the Republican party.
Re:Walmart employees, rejoice! (Score:5, Insightful)
Walmart? The retail chain that pays its employees such a low wage that they can't even afford to shop at Walmart, and deliberately cuts back on their employees' hours to avoid having to pay benefits? *this* is the company you hold up as the model of how to run a business?
http://jobs.aol.com/articles/2... [aol.com]
If Walmart is a paragon, what the hell does that make Costco?
Re:Walmart employees, rejoice! (Score:5, Insightful)
Bitch about Walmart employees all you want...
Fine. I will, because I don't give a shit about superficial things like the CEO's office or the car he drives. Walmart is a parasite on virtually every community in which they operate. Not only are their wages too low for their employees to actually live on, they actively promote the subscription to government services (welfare) by those employees. Privatize the profits and socialize the expenses, and then get some gullible apologist to talk about how "humbler" Walmart's leadership is.
Customers may benefit... maybe (Score:5, Insightful)
Because if Walmart wins, they will surely use the money to raise your meager wages instead of buying the CEO a new yacht.
Raise wages? Probably not. Lower prices? Very possibly. Walmart competes primarily on price so anything they can do to lower costs tends to get at least partially passed on to customers in order to keep their competitive advantage. A lot of companies would pocket the savings but in this particular instance it might actually end up benefiting customers.
Plus Walmart beating up Visa on price is almost certainly going to benefit consumers in the long run and Walmart is big enough to actually succeed. The cost of credit card swipe fees gets rolled into the prices we pay for products so if they get lowered at least some of that money will flow through to us as end customers. Not all of course but definitely some.
Re:Customers may benefit... maybe (Score:5, Interesting)
Re:Customers may benefit... maybe (Score:5, Insightful)
I'd add that they also maintain this illusion by sometimes (often?) selling similar-but-inferior products. For instance, a vacuum that is identical to a top-rated cordless vacuum, but with a smaller motor and battery. If you run through there with a bar code scanner on your phone you can see just how many of the products are actually different than the ones available through Amazon and friends.
Re:Customers may benefit... maybe (Score:5, Informative)
I'd add that they also maintain this illusion by sometimes (often?) selling similar-but-inferior products. For instance, a vacuum that is identical to a top-rated cordless vacuum, but with a smaller motor and battery. If you run through there with a bar code scanner on your phone you can see just how many of the products are actually different than the ones available through Amazon and friends.
They are notorious for advertising they will meet any advertised price for the same product. The problem is that many of their products, while similar, are only a model that Walmart sells, at least in electronics.
Re:Customers may benefit... maybe (Score:5, Interesting)
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.
Citation? There is a Safeway, Lucky's, and Wal-Mart equidistant from my house. I went to all three and priced out a typical cart of groceries, and Wal-Mart was significantly cheaper on EVERY SINGLE ITEM. Overall, I save about 20% by shopping there.
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If you're east of the Rockies, you should check out ALDI, even cheaper than Wal-Mart and a lot of high quality items (even if the brands are different at times; often made by the same company).
Re:Customers may benefit... maybe (Score:5, Interesting)
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.
Re:Customers may benefit... maybe (Score:4, Informative)
In North America, the cashier almost always stands.
Re:Customers may benefit... maybe (Score:4, Informative)
Re:Customers may benefit... maybe (Score:5, Interesting)
Citation here:http://www.businessinsider.com... [businessinsider.com]
If you drill down to the actual study, what they found was that Target was cheaper than Wal-Mart by 0.46% for ONE MONTH. The preceding months, Wal-Mart had been cheaper by over 2%. So this was apparently a blip caused by some one-off sales at Target.
Re:Customers may benefit... maybe (Score:5, Informative)
Wal-Mart competes primarily on the illusion of price through loss leaders on a minority of items.
There is a huge amount of publicly available research that proves that what you claim is not true. On a randomly chosen basket of goods, Walmart most of the time is the lowest price option. Not always but often enough that statistically speaking they have an advantage. They built their entire business model on low prices and the systems required to support them. Their lead is not huge but it definitely is there. The primary reason companies like Kmart have had so much trouble is that they are competing on price with Walmart when Walmart's prices are lower and pretty much everyone knows it.
The company's actual strengths are logistics and marketing.
Logistics yes, marketing no. Logistics is only an advantage in retail if you can lower costs and thus prices as a result. And marketing? Nobody is dazzled by Walmart's marketing. People go there because they sell stuff for cheap prices. It's certainly not for the shopping experience. Walmart demonstrably competes on price and always has. They also have the advantage of having a lot of their stores in small towns where there really isn't room for a competitor to come in and displace them. Their scale allows them to negotiate prices in a pretty brutal fashion with suppliers. I have close friends whose job it is to sell to Walmart and it isn't a fun experience. They take some pretty significant measures to keep costs low because their ability to keep their advantage is entirely rooted in price.
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That is what the guy just said - Walmart competes on marketing - meaning that they dont tax everything they sell to spend on harvesting the morons who respond to advertising.
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That doesn't make what he said untrue.
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The company's actual strengths are logistics and marketing.
Logistics yes, marketing no. Logistics is only an advantage in retail if you can lower costs and thus prices as a result. And marketing? Nobody is dazzled by Walmart's marketing. People go there because they sell stuff for cheap prices.
And how do they know that Walmart is the place to go for low prices? How have they solidified themselves in the public mind as the low-cost leader? Marketing!
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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.
This is essentially correct. When a new Walmart opens, that store operates at a loss with really low prices. Then after the consumer base has built up and other competition reduced, prices start rising until they are not significantly lower than that of their competition. They still use loss-leaders to get people in the store, but, they are no less expensive than the rest of the mega market stores.
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And because Wal-Mart's a horrible corporate "citizen", *we* get to make up the wage difference for their employees in the form of food stamps & other government assistance.
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That is some really specious logic there. The odds are those people aren't getting $10 an hour.
"Walmart jobs are poverty-level jobs.
Walmart’s average sale Associate makes $8.81 per hour, according to IBISWorld, an independent market research group. This translates to annual pay of $15,576, based upon Walmart’s full-time status of 34 hours per week. This is significantly below the 2010 Federal Poverty Level of $22,050 for a family of four."
http://makingchangeatwalmart.o... [makingchan...almart.org]
Also, any company can g
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This is significantly below the 2010 Federal Poverty Level of $22,050 for a family of four.
Nice pointless statistic there. There is no reason the federal poverty level for a family of four is relevant to a discussion of the minimum wage.
Lots and lots of minimum wage workers are minors, and dependents. They don't need a living wage. By your own statistic a family with two minimum wage workers would in fact be above the poverty line! Given the 77% female work force participation its clear most families with a minimum wage earner would be multi income.
A single young person can support themselve
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A single young person can support themselves on minimum wage in many but not all US markets.
If they're lucky enough to get full-time work. Since, for the vast majority of employers, that now means health insurance and a bunch of other non-wage expenses, that's going to become even more difficult to find than it has been.
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We need to move forward. It does not matter if the move is good or not we just need to progress forward, for the children and the environment. You do care about the children and the environment, and the puppies. Do not kill the puppies!
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And because Wal-Mart's a horrible corporate "citizen", *we* get to make up the wage difference for their employees in the form of food stamps & other government assistance.
If they raised wages, we would have to pay more on food stamps, because they would hire different people, and their current employees would likely be unemployed. Have you ever been to Wal-Mart? My local store employs a woman in a wheelchair, and two people that appear to have Down's Syndrome. Most of their other employees don't look much brighter. These people get paid $10 per hour because that is what they are worth. If Wal-Mart is forced to raise wages, then they will pull more capable people from other more useful employment, and their current employees would get pink slips.
While there may be a slight element of truth to that I feel that it's more of a corporate management argument. IF the government would raise the minimum wage to a 'living' level then we'd see a slow move away from food stamps. It would also level the low end wage earner playing field and put Walmart (et al) in a position of not being able to lower prices because their employees' salaries are subsidized by taxes (you and me).
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Re:Customers may benefit... maybe (Score:5, Insightful)
IF the government would raise the minimum wage to a 'living' level then we'd see a slow move away from food stamps.
Unlikely. Raising the minimum wage would result in more automation, more outsourcing, and higher unemployment. Most people on food stamps have at least one household adult that is unemployed or underemployed. Young black men have an unemployment rate of 40%. The problem is not "low wages" but "lack of entry level jobs". It is unrealistic to expect an unskilled and poorly educated young man with no work history to compete for a $15/hour job. He isn't going to get it. Instead, he needs an $8/hour job to gain some experience, and learn some basic job skills, like showing up on time and dressing appropriately. Then he can move up. But that won't happen in you remove the bottom rung from the ladder.
Re:Customers may benefit... maybe (Score:5, Insightful)
Raise wages? Probably not. Lower prices? Very possibly. Walmart competes primarily on price so anything they can do to lower costs tends to get at least partially passed on to customers in order to keep their competitive advantage. A lot of companies would pocket the savings but in this particular instance it might actually end up benefiting customers.
I get your point, but I can't wonder how anyone could possibly swallow their "You made our customers poorer, now compensate it by paying damages to us!" with straight face. Not being a US resident, I'll be the first to admit that my awareness of legal happenings in the US is strictly limited, but I was always under the impression that Americans mostly opt for a what is usually called a class action lawsuit whenever something like this becomes public knowledge. The fact that the damages should go to what amounts to a third party is incomprehensible to me.
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First, lawsuit damages always mostly go to a third party. Class action lawsuites the actual end users get pennies on the dollar.
And what Walmart is saying is that the extra costs from Visa were maintained through market collusion between competitors (which is illegal in the US). They were forced to artificially inflate their prices to their customers which resulted in reduced sales and direct damage to Walmart.
Re:Customers may benefit... maybe (Score:4, Insightful)
For one, I don't think that Walmart's margins are so thin that they can't afford...
This is a case where it doesn't matter what you think. Walmart is a master of optimizing prices. Maximizing revenue is a duty to their shareholders. When they see waste, in this case on the transaction fees, they work their hardest to reduce it. That is what's happening here.
Walmart serves a different market from Costco so your bit about amex is not applicable. There was a time 10 or 15 years ago when Walmart tried to start a bank to get in on the interchange rates and government regulators killed the idea.
Re:Customers may benefit... maybe (Score:5, Insightful)
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If they win, why would they lower prices? It is apparent, given their growth during the period in question, that sales continue to increase, meaning people are willing to purchase goods at the higher prices. As such, a much more likely scenario would be to pass the savings on to shareholders instead of consumers.
Re:Customers may benefit... maybe (Score:5, Insightful)
...lower costs tends to get at least partially passed on to customers...
Including my taxes to cover their worker's government assistance.
...might actually end up benefiting customers.
You shouldn't have to do either. Walmart could pay a just wage. Of course that would lower dividends paid to shareholders. So, think of paying higher taxes because many Walmart workers needing assistance as another government transfer payment - from you to Walmart's shareholders.
I'd rather pay more up front and have my taxes be put to better use elsewhere. Pay them a living wage already, FFS.
Re:Customers may benefit... maybe (Score:4, Insightful)
...lower costs tends to get at least partially passed on to customers...
Including my taxes to cover their worker's government assistance.
...might actually end up benefiting customers.
I'd rather pay more up front and have my taxes be put to better use elsewhere. Pay them a living wage already, FFS.
Your taxes will go towards providing assistance to the less fortunate if they were unemployed too. In fact even more tax-funded assistance would be needed. You could just as easily be thanking Walmart for subsidizing our taxes by providing wages to low skilled citizens. (note that I think both of these arguments are silly)
Re:Walmart employees, rejoice! (Score:5, Insightful)
I know everyone likes to hammer on Walmart, but the fact of the matter is I know plenty of people that work at walmart. They have low wage jobs that are typically taken by teenagers and college students but then they have long term employment as well. My aunt started there with no prior experience 30 years ago and made enough to buy a 2 story house and put all of her kids through college as a single mom. Her oldest daughter got a full scholarship from walmart and is now a school teacher. Walmart paid for all of her tuition, her housing and just about all of her expenses. My bests friends wife worked at walmart for 10 years and learned accounting. She now works for the veterans bureau and swears she'd never have gotten the experience required to work there without walmart.
I'm not saying that walmart doesn't have it's problems. But any company that size would. They are not the big bad evil company everyone makes them out to be.
Re:Walmart employees, rejoice! (Score:4, Informative)
I'm not saying that walmart doesn't have it's problems. But any company that size would. They are not the big bad evil company everyone makes them out to be.
Yeah they kind of are the big bad company they are made out to be. Sure they aren't cartoon-character-evil but the choices they have made in how to run their business have some pretty serious negative consequences for which Walmart seems largely unconcerned. I'm not sure I need to repeat the list here but it's not a warm and fuzzy organization.
Buy (Score:2)
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Walmart in San Antonio typically pays cashiers more than any other non-commissioned store based cashier (with the exception of coscto.)
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So? Are they getting enough hours to make a living wage? Wanna make a bet of what percentage of those cashiers are on some form of assistance?
"Walmart workers make, on average, $8.81 per hour, which, according to MIT’s “Living Wage Calculator,” does not qualify as a living wage for a single person in much of the country, and is not a living wage for a single parent with one child anywhere, including Bentonville, Arkansas, the home of Walmart."
http://www.addictinginfo.org/2... [addictinginfo.org]
"Walmart job
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Clash of the Titans (Score:5, Funny)
When one huge evil corporation attacks on another huge evil corporation for being evil, does it cause a rip in space time?
Re:Clash of the Titans (Score:5, Funny)
I don't know about a rip in space time, but walmart's popcorn sales should go up.
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It's about time (Score:5, Insightful)
This is, and has long been, a huge ripoff. I'm rather sure that Walmart doesn't pay the full 3% that Visa/MasterCard like to charge for transactions, 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, but the system is carefully crafted to avoid competition, and that's illegal.
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Cost of transaction processing (Score:5, Interesting)
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)
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you do understand that purchasing things with a little piece of plastic is not a right right? they offer a service to their customers ie) allow for access and convenience to the customers of those customers. Last I checked, Amex charges a higher rate, but is also still present and profitable.
3 percent is what they charge retailers for being too small to demand something less, getting access to a larger customer pool, giving their customer pool more convenience, and assuming any and all risk associated with
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Wal-Mart vs. Visa (Score:5, Funny)
Is there any way they can both lose?
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Yes. By increased government regulation.
Oh, and we lose too.
PINs (Score:3)
"despite knowledge that PIN authentication is more secure"
Visa's probably thinking about all the people who can't seem to remember their PINs and afraid of losing sales from those people.
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For what it's worth, there has been a move toward using the billing zip code like a PIN, especially with pay-at-the-pump gasoline. While this is something that would be known to someone who steals your wallet, most of the fraud is likely from magstripe skimming and card numbers sold on the internet.
Someone who skims your stripe isn't going to know your zip code, at least not at a restaurant or faceplated ATM where most of that happens. Also the CVV number is physically kept on the card, but not in a form w
Canadians: please read (Score:3)
Little travel tip that I, as a Canadian, learned years ago entirely by chance.
If you encounter this security system in the US (still mostly as gas pumps) - 99.5% of pumps will allow Canadians to use a "zip code". Take the first 3 numeric digits in your Postal Code, and add "00" to the end, making a 5 digit "zip code". Works like a charm almost every time. I've only had it fail once. And they do actually use this as a security code, I've tried 55555 and 90210 and nothing else will work. But this one does.
I'm
Re:PINs (Score:5, Funny)
Surely US citizens are not less intelligent then the rest of the world's citizens on average...?
Have you seen our reality shows?
Pot Meet Kettle (Score:2)
Walmart made $13bln US in profits last year ... half of which accrues to the Walton "family."
'The anticompetitive conduct of Visa and the banks forced Wal-Mart to raise retail prices paid by its customers ...
Anti-competitive? Hypocrites.
lol (Score:2)
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credit card != debit card
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Did you ever consider that they don't give flat fees to companies where monthly charges can't be paid with a $20 bill and some change?
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Please... (Score:5, Insightful)
Maybe Walmart is just being stupid. Did they ever consider that?
Walmart is many things but stupid is not among them.
My swipe fees are zero.
No they are not. They might be rolled in with some other charge but you aren't getting it for free. If you pay a flat fee per month then you do a good approximation of zero transaction volume.
Maybe they should have gotten a plan that doesn't suck.
Walmart has more negotiating power than pretty much any retail firm on earth and they squeeze every dime of cost out that they can. If a better deal could have been negotiated it would have been.
Conflicted (Score:2)
I feel so weird saying this... But, Go Walmart? I guess.
Anyway, as another poster pointed out it's about time someone went after them. Maybe taking 5 billion from them will be a real wake up call.
This is new economy (Score:5, Funny)
Since the middle class has been decimated, this is how business of the future will run... now that they've fleeced the rest of us, big companies will sue other big companies and that's their ticket to profitability and stock price rises.
Somebody needs to continue to fight this (Score:3)
The settlement, assuming this article is accurate, includes a broad ligation release that will basically shield the credit card companies from getting sued in the future. So essentially they are giving a token amount to this settlement and getting a huge litigation release that will allow them to continue to screw people essentially forever. I'd opt out of this class if it was me. Walmart, Target and Amazon have all opted out. Hopefully they will all sue individually and force a reasonable outcome this time. Depending upon how this goes Walmart may be doing us all a favor here by trying to force a better settlement.
This is just another example that reinforces my view that class action lawsuits are basically a scam. I have been involved in two where I actually joined the class and in both cases the company being sued and the lawyers came out just fine and the people in the class got pretty much nothing. I had two other instances where I qualified and I just opted out. Not surprisingly those cases also involved making lawyers rich while the people in the class got nothing. In this case the class members are getting next to nothing and giving up a hell of a lot to get it. Can't say I am surprised.
Credit Card Features and Rewards (Score:5, Insightful)
Expect your travel insurance, extended warranty protection, points, cash back, and other credit card features to dry up rapidly if interchange fees are reduced. These perks that have been built up over the years are not free, they are paid for by interchange fees.
What the f*** Walmart? (Score:4, Interesting)
Now, they likely do have some valid complaints here.
But bitching about a slow transition away from magnetic stripe cards when *you are one of the last retailers to install NFC payment terminals* and more importantly *knowingly skipped the start of migration during your last payment terminal upgrade cycle* is bullshit.
Now, I can understand if maybe Walmart were just at the wrong point in the upgrade cycle and hadn't upgraded their terminals in years, but I know for a fact that nearly every Walmart I've been to in the last year has upgraded their terminals in that time period and, despite many of their competitors having NFC payment terminals for a few years, Walmart did *not* upgrade to terminals that were capable of anything but magswipe.
Target appears to have deployed terminals that look NFC-ish but aren't, and did so before the NFC rollout started and hasn't done another deployment since then, so they do have an excuse.
I am torn! (Score:3)
I'm not particularly fond of Wal-Mart. However, as a merchant who suffers the whims of credit-card company policies, I'm really glad to see someone beating up on VISA. As another poster said, Wal-Mart might just be big enough to succeed.
I would love to see a group of large merchants get together and pick one credit card company (let's say MasterCard) and simply refuse to accept it unless security is improved. Yes, customers would complain, but if the merchants spun it correctly as trying to improve customer security and reduce identity theft, I think MasterCard would cave. Then move on to VISA.
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EMV cards are available in the US today. American Express offers EMV versions of virtually all their cards today, you just have to call customer service and ask for one and they'll send one out. Many major banks including Bank of America, Citibank, Chase, US Bank, City National, USAA and Barclaycard as well as some credit unions have started issuing EMV cards as well. CaptialOne is a notable exception as a major credit card issuer that does not yet issue EMV cards in the US (though I've heard they do in Can
Security (Score:3)
I enabled 2FA* for my accounts on multiple crypto-currencies exchanges. I enabled 2FA for my Blizzard account. I also have 2FA for my PayPal account.
But my bank doesn't even support 2FA and neither does VISA.
Funny how the big guys who handle real currencies (aside from PayPal), have less securities in place than the others.
* two-factor authentication [wikipedia.org]
That's Odd (Score:5, Interesting)
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I'm very pro-free market, bu
Worst Company in America...regrets (Score:4, Interesting)
Hrm. I'm glad someone is finally stepping up to confront the assholishness of the credit card processors and their crazy fees. But I just voted for Walmart in the Worst Company in America tourney at http://consumerist.com/tag/wci... [consumerist.com]. I'm starting to think I should have picked Abercrombie & Finch instead.
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Re:Bitcoin (Score:5, Interesting)
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If i remember correctly that kind of law were thrown out by the supreme court because of anti-trust violations. Further more, local merchants (especially in ethnic neighborhoods) have already giving discounts (by waiving sales tax and credit card fees) if you pay in cash.
Re:Bitcoin (Score:5, Informative)
Undoing moderation to post this (sorry) but I have first hand knowledge of this having worked in merchant payment processing and setting up these accounts and terminals for customers. The standard VISA contract prohibits you from charging more for card purchases, however you are totally allowed to offer discounts for cash. You can not market the card as costing more (say, posting a sign saying 3% upcharge for VISA customers) but you are completely welcome to post a sign saying 3% discount for paying in cash, using a loyalty card, showing up dressed as a chicken, or whatever. Promotions and discounts are fine and are considered marketing events - "upcharging" VISA customers is not allowed and considered a penalty to customers. As long as you market correctly you're in the clear. VISA's business manual even has examples of this in their do's and do not's section.
Bitcoin (Score:3)
I was thinking the same thing, install an experimental "bitcoin checkout line". It would probably be too confusing for 99%+ of their customers though.
Wi-Fi in the store (Score:2)
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"a dedicated kiosk to exchange BTC for gift cards but could hold up the queue of guests if used for actual groceries."
Actually that's not a bad idea. Offer refillable gift cards online or at the Customer Service desk at a discount if bought with bitcoins that way people don't slow down the checkouts.
Name of the company vs. its stores (Score:2)
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Run by Paul Blart.
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That's going to change next year.
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most people in the U.S. use EBT cards which i don't think it will change to chip & pin soon.
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and there is no fee for processing SNAP transactions on EBT cards. (It is illegal to charge sales tax or card processing fees on SNAP transactions)
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Each transaction includes a 2.5 - 5% transaction cost that the retailer pays.
Two things..
1) That's a huge percentage for a transaction cost that takes a couple of milliseconds on computer time, mostly by companies that don't receive the transaction fee. A saving account might give you 2% for holding the money for a whole year.
2) It's a percentage, not a fee. The transaction doesn't cost more when the price of the goods is greater.