This started back here. {and continued here} You can read the back story on the who and the what there.

What happened since then…well…your humble host here on RPN is somewhat of a geek.    He’s pretty good with computers and what-not.   One of his part-time gigs, in college…now remember…this was back in the late 90’s…was doing what came to be called “SEO” for a small, very forward thinking firm.   It’s the concept of making certain websites appeal to search engines for certain search terms.    A couple years later, I blogged about a new search engine Google (this was right after a post about that new music search tool…Napster).  Later “SEO” and google became intertwined as a billion-dollar industry grew up around the practice.   Many of them PR firms…

Now…considering that RPN is something of an anti-PR firm, this is going to be a fun fight, should it continue.   Currently that first post I linked to above and the video which accompany it are the first non-b.s. pages (i.e. ones not done by the astro-turfing campaign) returned for search for their chosen astro-term on the bing/yahoo and the google respectively.  Note to others: bing/yahoo link to my blog post, google finds the youtube video a more compelling search result, take that with a ‘no evil’ grain of salt, if you will.

Which brings us to the whole “A-Hole” thing I mentioned in the title.   It’s a widely known fact that “random disinterested persons” on the internets are rarely that.  Especially on obscure blogs only the most enlightened of humans are barely aware of, if that.   But when one pops right up in the middle of the ointment like a nasty fly, things like this pop up to neutralize it.

Comment by Jack on March 21, 2011 6:20 pmRPN, you’re an a-hole. It doesn’t matter WHO is sponsoring the pushback. Eliminating the ability for credit card providers to charge decent rates on debit and credit card networks will result in rippling surcharges for consumers. Whether or not credit networks are making billions, they will always be seeking to increase their profits. If you cut their ability in one arena, they will seek to make it back in some other area, like the elimination of free checking (mostly at smaller banks). So basically, it’s governmental interference in a place where it’s not needed. The only “nutjob” in this arena is you.

Ouch, that one hurts “Jack”.   Curious points you’ve made here.  They all seem eerily similar to what the official Don’t Make Us Pay website says.

Let’s analyze this in detail, like I learned how back in the day (I’m like a Jedi that went Dark…only in the PR/Advertising world, those roles are reversed).

 It doesn’t matter WHO is sponsoring the pushback.

Yes, it does quite a bit.  ESPECIALLY when the word “us” is in the title.  Most PR campaigns want to set up an “us vs. them” dynamic, because “we” are always the good guys  (psychologically).

Eliminating the ability for credit card providers to charge decent rates on debit and credit card networks will result in rippling surcharges for consumers.

One PR firm’s “decent rates” are one RPN’s “obscene usury”.  How does it makes any sense at all to charge the same PERCENTAGE of a debit card transaction that is completely digital when the only difference between a $1,000 charge and $10 charge is the number of bits?   Yet nowadays, one of those nets the banks $10 and the other one $0.10.

That makes no sense.   Banks needs to play fair.  Not only that, but the current rates currently result in a “rippling surcharge for consumers” of about $450/family year, that proverbial “dollar a day”.   This is expected to double in the next five years as a rapidly increasing percentage of our economy goes digital, and people only want to spend their own money (debit) and not someone else’s (credit) money (a big and very important distinction).

“Rippling surcharges” will now reflect something close to the actual services offered by the banks.  Banks shouldn’t be trying to make billions of dollars just for giving you access to your own money.  That’s what they do as a bank, they aren’t a bank if they don’t do that.   Banks should be making money by making good loans, and good investments.   This is like a supermarket charging you more for charging you, having nothing to do with the service they actually offering (selling food/loans).  

 Whether or not credit networks are making billions, they will always be seeking to increase their profits.

Well, they currently are…making billions.  About $18 of them a year…in pure profit, just by charging people three times as much as it costs to access their own money.   Why do you think they keep paying out those huge bonuses?   They can lose a billion dollars a month on risky investments and still make a yearly profit.   Why do you think they were so willing to risk it all?   They had guaranteed profit.   A 1-2% tax on people accessing their own money.

If you cut their ability in one arena, they will seek to make it back in some other area, like the elimination of free checking (mostly at smaller banks).

It’s called “competition”.   Businesses offer varying services, and charge for them.   Giving you access to your own money is not a service banks should be charging for.  It’s highway robbery.  

So basically, it’s governmental interference in a place where it’s not needed.

No, this is “governmental interference*” precisely where it is needed.  As I’ll mention a third time, making billions of dollars by charging people to access their own money is not a sound, fair, or hopefully very soon legal practice.

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* for those technical wonks, the Frank/Dodd Financial Reform Bill included a clause that ordered the Fed (of Ron Paul “End the Fed” fame) to set these debit interchange rates to something reasonable.  Seems some folks wanted banks to stop ripping them off, so that’s how it technically works.  BTW, the Fed also gives these same banks large loans from time to time, so they follow the rules, when told to do so.