“What if…” your question were about what are these articles about? Easy, these articles are to determine what would happen if a seemingly unlikely event took place; a chance to sit back and say, “What if…” When you have questions, we have answers.
    And, apparently, “what if…” generates a lot of questions. Naturally, events and people like Mount St. Helens and Krakatoa, 9/11 and Pearl Harbor, the San Francisco and New Madrid earthquakes, the Tunguska Blast, and the rises of Hitler, Stalin, Mao, Idi Amin, Pol Pot and Milosevic, multiple “lost” nuclear warheads, killer tsunamis and communication failures say that everything IS possible. And, as we’ve noted, all of these unlikely events or persons have taken place within the last century. OK, the New Madrid earthquake and Krakatoa volcano are slightly older.
    As I’ve stated in the past, the longer something has not happened, the more likely it is that it will happen.

So, some questions and answers.

    Some collusion between MasterCard and Visa would be nice, especially when highly used rates go up, as in April, 2005. Getting the concept of a blended rate (EMJ*) to merchants can be tough. You’ve picked the right word, collusion. Figure that V/MC are still smarting from the 2003 lawsuit settlement and want to be competitive and will go to extremes for a while to appear so.
    One choice would be a retroactive blend, based on actual card usage, from last week/month, say. Yes, but if you had trouble explaining blended rates, explaining a retroactive credit or charge won’t be easy.
    Why hasn’t there been a class action suit against the Acquirers/ISOs for deceptive practices? Which deceptive practices, he said innocently? An interesting thought! While the brothers of the law are looking for the big, home run, class action cases, there are certainly cases that could be made against an Acquirer/ISO, on behalf of all his/her merchants and their consumers as a class.
    Let’s say you become convinced that an Acquirer/ISO is being, shall we say, dishonest or unethical, in some element of its merchant contract. And, you know how this is being done. The next steps are difficult.
    First, you need willing merchants who feel exploited. Second, you need a knowledgeable consultant to help you document the case. Third, you need a motivated and aggressive lawyer. Hum, this may not be so difficult, after all.
    Why hasn’t there been a class action suit by merchants against V/MC for price gouging? For instance, Visa has a rewards program that builds loyalty for an Issuer’s cards. Guess who pays for this starting April, 2005? The merchant, that’s who. Well, there should be no surprise here; but the term “price gouging” sounds so heavy handed. If you remember that the consumer pays for everything, there is no surprise.
    The method of doing this was not unusual. The Visa Issuers wanted the program; they forced the price of it down on the Acquirers. The Acquirers are indifferent to Issuers, so they forced the price down on the merchants. The merchants will force it down on the consumers in terms of higher prices. What’s more American than that?
    Do you remember the first “what if…” article in this series from 5/1/04? Building loyalty and moving consumers to a desired payment method were discussed. Apparently, it was such a good idea that is was adopted. The same end pays for the program, the consumers, however.

In some of your early “what if…” articles, you used the phrase “equipment whore”. I think I’ve dealt with one, but don’t want my wife or Mom, to know about it. Can you give me a bit more information?

    Well, yes, Pop, but this is just between us, right? The phrase meant someone who was willing to sell a terminal at eight or ten times cost and give a very low discount; as if the seller were more interested in selling the terminal than in the residuals.
    This sales approach requires merchants who demanded “the lowest rates” and don’t understand or care what else is involved in their contracts. This type of merchant is willing to ignore supply costs, all the “assumes” that must be met to get the low discounts, fees for handling chargebacks and all sorts of little add-ons.
    If you think about it, this terminal cost gimmick is often the basis for the Acquirer deceptive practices question above. At a minimum, please watch for the automatic renewals that can raise the terminal price many more fold. Pop, if you are the merchant in this case, there is certain to be an Acquirer/ISO willing to make your dreams come true.
    We were reading your website and your bio. More specifically, we were looking at some of the things you have done and how they have paid off in recent sales (Pulse/TYME = $311 million. Buypass = $90 million.) Thank you for your interest. Read back through the recent “what if…” about something you thought about happening, and think twice about getting process/intellectual rights patents on your ideas and work. You just never know.
    You recently talked about the CAN-SPAM Act of 2003 that took effect on January 1, 2004. You said that rather than seeing a decline in SPAM, you saw more. What gives?
    The best choice seems to be a SPAM blocker. But, be careful how you address messages and what you say. If you use words or phrases that have been blocked, your meaningful message heads for the cyber-trashcan, unread.
    If you have a “What if…” type question, please feel free to send it to me. I’ll try to fit your questions into these articles and give you a thoughtful and innovative answer. Let’s just say there are three guidelines:

• Answers must be limited to the size of this column. That’s a nice way of saying that questions that have long and detailed answers are probably not objects that can be addressed;
• No questions like “How high is up?” can be fully and correctly answered without significant artificial assistance, like lots of beer or EMJ. Always remember, the world cannot end today, because it’s already tomorrow in Australia; and
• This column, as good as it may get, cannot replace a full study and analysis. Again, a nice way of saying I probably can’t solve a specific problem without seeing and knowing all of the details.