According to the Nilson Report, the 10 largest merchant acquirers of 2013 were:
1. Bank of America
2. Chase Paymentech Solutions
3. First Data
6. Wells Fargo Merchant Services
7. Citi Merchant Services
8. Global Payments
9. Heartland Payment Systems
The only 2 changes in the top 10 were:
First Data fell from 2 to 3
Citi Merchant Services fell from 6 to 7
After years of debating over the law to cap debit card interchange fees and its eventual enactment, a federal court has struck it down. The 21 cent cap is gone but not because it was deemed unfair to banks but because the court thinks the cap should be even lower.
I wrote about the law several times over the last couple years. In the beginning, it was unclear as to what a debit card fee cap really meant, as I myself even explained it incorrectly the first time or two. The majority of folks believed the cap applied to the end user, the merchant, which helped to encourage small businesses,journalists, and even consumers to rally around it.
But when the law actually went into place, not much really changed because it didn’t have much to do with small businesses at all. The debit card reform law capped the amount of interchange fees that an acquiring bank pays a card issuing bank. The merchant wasn’t even involved although the acquirer can pass their new savings on to the merchant, but they don’t have to.
Many acquirers did pass some of the savings on but merchants went and did the opposite of what they promised. Their call to have their swipe fees lowered initially was so that they could lower their retail prices and and pass the savings on to consumers. Consumers believed this logic and supported small businesses to get this law implemented. A study by the Electronic Payments Coalition however, found that 67% of small businesses kept their prices the same or raised them.
There was clearly a lot of misinformation around this law and now it’s been struck down.
Two big misconceptions:
merchants will pay a maximum 21 cent debit swipe fee: Wrong
small businesses will turn their debit card fee savings into lower prices for consumers: wrong
My previous articles about debit card reform:
- The Debit Interchange Fee Battle Continues 2/7/12
- Law to Reduce Debit Card Fees to Retailers has Opposite Effect 12/12/11
- Where’s the Debit Discount? 12/11/11
- Don’t Make Us Pay is Back at it Again 10/21/11
- Revenge for the Durbin Amendment 10/3/11
- Don’t Make Us Pay Goes Quiet 7/11/11
- 15,000 Exempt From the Debit Card Interchange Fee Standards 7/14/11
- And the Misinformation Continues 7/12/11
- Blackjack! 21 Cent Debit Card Interchange Fee Plus 5 Basis Points 6/30/11
- Debit Card Feed Reform to be Finalized June 29 6/28/11
- Save My Debit Card Video Finalists 5/9/11
- Debit Card Reform is Gaining Steam in Canada 4/18/11
- Interchange Regulation and Reduction 4/16/11
- Wells Fargo, Chase, SunTrust Cancel Debit Rewards Program 3/28/11
- https://debanked.com/2011/08/6497526-the-merchant-processing-resource-is-not-hiring/ 3/23/11
- A Few Good Senators Try to Stop the Madness 3/17/11
- Say Goodbye to Debit Cards 3/11/11
- Congressman Steve Israel Replies to Us 2/22/11
- Debit Card Costs May Be Put on the Consumer 2/18/11
- Electronic Payments Industry Changing Forever 12/17/10
Recap of the ETA Expo as it pertains to Merchant Cash Advance:
- Just about every funder has an ACH program or is working on implementing one.
- Many funders are licensed lenders or are working to become licensed in the states where it may be necessary. There actually seemed to be a lot of excitement about this. Funders are finding comfort in being subject to state mandated regulations as it probably raises their legitimacy and it will make their businesses easier to value when trying to raise money or sell.
- The ACH repayment market will be larger than the split-funding market this year. There’s no doubt in my mind about this. That means that ACH funding is now the primary protocol behind Merchant Cash Advance.
- Almost everyone is working hard to build up their technology. I got a personal demo of RetailCapital’s ISO/Agent system in addition to Capital Access Network’s new CapTap. Both are great. Capital Stack also has a beautiful platform.
- Stacking is the issue of 2013 as I heard that word uttered probably every 30 seconds for a whole week. I know the NAMAA folks are talking about it but I don’t know what the consensus is. It’s important to keep in mind that many funders aren’t NAMAA members and that affects NAMAA’s ability to dictate policy. Capital Access Network, the largest funder in the industry isn’t even a member.
- Speaking of NAMAA, they refaced their website and it looks A LOT better. I see only 14 members listed but it’s my understanding that there are closer to 20 of them.
- Factor rates are all over the place. Swift Capital has a new 1.099 program, which has got to be the first one to fall under the 10% threshold aside from Amex’s Merchant Financing. Higher risk deals however still operate in the 1.49 and up range. There is no one-size-fits-all product anymore.
- There were several direct lenders walking around that I had never heard of and they are apparently doing significant monthly volume. More and more people are getting into the funding business.
- It’s exhausting trying to keep up with the news surrounding On Deck Capital. They are on a very deliberate path and what we keeping seeing and hearing is them just checking things off on their to-do list. I bullet-pointed my theory on DailyFunder in response to a few posts.
- Discover and Priority Payments threw great parties.
- New Orleans has a lot of charm.
Make sure to check out my updates and photos that I’ve finally posted from the ETA Expo on DailyFunder and feel free to add your own if you were there.
SafeKey is a nice little feature that American Express is now offering. A password is required in order to make an online purchase with the card. My question is, why isn’t this mandatory for all credit card purchases with all cards? 99% of the time, no one questions whether or not I am the person on the card I’m using. No wonder credit card theft is such a big business and real threat.
“Um, I don’t feel comfortable sending them to you because they’re private.” One of the most interesting things I experienced as a broker and underwriter is the amount of times I heard merchants tell me their bank statements were too private to send in. I understand it’s not exactly the same thing as telling someone your phone number, but if you’re applying for a loan or intend to sell your future receivables, this doesn’t really cross the line as being too personal.
Let’s be honest here, there’s plenty of folks who get defensive over this simply because they’re overdrawn and they don’t want the lender to see it. I’ve heard every trick in the book, “the last 2 months statements are lost and my bank refuses to send me copies”, “I switched bank accounts yesterday and my old bank won’t send me my previous statements now”, or “I’ll send them over as soon as I have 100% final approval on the loan.” These excuses won’t work and they set off red flags with underwriters. Besides, if you lie about something during the application process and then proceed to sign a guarantee on the loan agreement that you’ve disclosed EVERYTHING, then you’ve already placed yourself in breach of contract or worse, you’ve committed fraud.
But on the flip side, just as many applicants are worried that submitting their bank statements could lead to identity theft. Maybe there is a slight chance it does, but probably only if you’re sending them to someone that already has all of your other identifying information like your social security number. That’s the “interesting” part I spoke of earlier because few people flinch when filling out their social security number on the application. Don’t get me wrong, I’m not trying to induce worry in businesses that want money. What am I trying to say is that waiting until late in the application process to do research on the lender or broker is too late. You need to be 100% confident in the recipient of your personal information before you even fill out the preliminary application on the first day.
When it comes to identify theft, Your social security number, name, address, and date of birth is really all it takes for you to be fully compromised. The rebuttal on the bank statements is always “But I don’t want someone to know my bank account number because then they might try to take money out of it.” Really? Have you ever written a check to someone? Have you ever signed up for direct deposit? Have you ever seen a waste basket full of bank receipts next to an ATM machine? I hate to say it but your bank account information is already public and you probably give it out to people on a daily or weekly basis. Routing numbers are shouted from the rooftops and you can see that for yourself at routingnumbers.org. If someone is going to try to debit money out of your account, your bank statements aren’t really necessary. It’s sad, but it’s true. Financial institutions review and audit businesses that debit their customers, but sometimes bad guys slip through the cracks. Generally if an unauthorized debit does happen, you are not liable for the loss. According to FTC.gov:
Since December 31, 1995, a seller or telemarketer is required by law to obtain your verifiable authorization to obtain payment from your bank account. That means whoever takes your bank account information over the phone must have your express permission to debit your account, and must use one of three ways to get it. The person must tell you that money will be taken from your bank account. If you authorize payment of money from your bank account, they must then get your written authorization, tape record your authorization, or send you a written confirmation before debiting your bank account. If they tape record your authorization, they must disclose, and you must receive, the following information:
The date of the demand draft;
The amount of the draft(s);
The payor’s (who will receive your money) name;
The number of draft payments (if more than one);
A telephone number that you can call during normal business hours; and
The date that you are giving your oral authorization.
If a seller or telemarketer uses written confirmation to verify your authorization, they must give you all the information required for a tape recorded authorization and tell you in the confirmation notice the refund procedure you can use to dispute the accuracy of the confirmation and receive a refund.
In the event these rules are violated and a debit happens anyway, the FTC advises this:
If telemarketers cause money to be taken from your bank account without your knowledge or authorization, they have violated the law. If you receive a written confirmation notice that does not accurately represent your understanding of the sale, follow the refund procedures that should have been provided and request a refund of your money. If you do not receive a refund, it’s against the law. If you believe you have been a victim of fraud, contact your bank immediately. Tell the bank that you did not okay the debit and that you want to prevent further debiting. You also should contact your state Attorney General. Depending on the timing and the circumstances, you may be able to get your money back.
It’s important that you know these rules, but it’s twice as important to do a background check on the financial service company before you send them ANYTHING. Your social security number is your crown jewel. Be smart about who you send it to. And as for your mysteriously missing January bank statement? There’s a pretty good chance your story about where it went or why it’s never coming back isn’t going to work. Good luck and safe funding!
Many small businesses that weren’t able to utilize traditional credit card processing services are delighted to find that there are now applications where they can accept credit card payments using a smart phone. However, before you jump on the bandwagon, it only makes sense to do your due diligence as to how to avoid credit card fraud. Just because you can process that card via your cell phone doesn’t necessarily mean you should. You don’t want to get caught holding the bag (and paying for) products after finding out you’ve been “had.”
As a matter-of-fact, not matter what services or devices you use to accept credit cards, as a small business owner you need to institute policies and practices to avoid credit card fraud. Here are some of the basics:
When accepting cards in-person at the point of service.
It is amazing at how just asking one simple question, “Can I see some valid ID?” can make all the difference. Always ask for a valid form of picture identification (such as a driver’s license) before accepting a credit card. If the customer isn’t able to provide ID, then DO NOT process their payment. This means asking for the card and identification BEFORE it is swiped. When you have both the card and identification in hand, check the back of the credit card for the customer’s signature and match that signature with the one on their valid ID. Again, if they haven’t signed their card, or the signatures don’t match, don’t process their payment.
Many small business owners may have an issue instituting the above policies with repeat customers if they have not used the policy previously. Now, this is going to be a decision each individual owner needs to make. You may indeed have long-term customers that deserve your trust, but they may not. At the very least, should you decide to accept their payment without a valid ID and/or their signature is missing on the back of their credit card, let that customer know that this is a “one time pass” and they must be able to provide both next time they make a purchase. You might be hesitant to do so, but letting the customer know that you are pursuing this policy to protect your customers. For example, costs associated with theft (including credit card fraud) must be covered by increases in pricing.
When accepting credit card payments over the phone or online.
The best way to avoid credit card fraud when taking payments over the phone or online is to get all the information you can to identify that the person making the order is, indeed, the owner of that credit card. This means reading off the name exactly as printed on the card. It means not only the full credit card number, but also the 3 digit verification number on the back of the card.
Often a purchaser will want the order shipped to another address. This is why you need to ask for both the billing address and shipping address. It is also why having an address verification feature is critical.
Many credit card processing companies monitor purchasing patterns at your place of business. For example, should there be a sudden increase in the number of credit transactions that can serve as a red flag and you will receive an alert. However, taking steps to avoid theft and fraud (not simply credit card fraud, but also shoplifting, employee fraud, etc.) should always be addressed proactively by small business owners themselves.
– Merchant Processing Resource
How sure is this recovery?
A few months ago, all signs pointed to a roaring recovery. As the data comes in each month, it’s looking less and less like a definitive thing. Sure the unemployment rate is going down, but mainly because hundreds of thousands of people are giving up on searching for jobs. The Wall Street Journal recently analyzed a less popular statistic, the civilian labor participation rate. At present, the percentage of Americans working is at its lowest point since 1981.
At the same time, the nation’s largest banks are cutting back on loans to businesses yet again. It makes one wonder if the explosive growth being experienced in the Merchant Cash Advance industry will start to fizzle out in the 2nd half of this year.
Google Penguin wipes out the survivors
If you used blog networks like BuildMyRank to game Google into ranking your site higher, you probably noticed your website got whacked in late March. After years of spending precious money on marketing, 2012 brought upon the realization that leads generated from organic searches are not only possible, but free. This is of course before you factor in the thousands and tens of thousands that MCA funders and ISOs are spending a month on SEO. But since many SEO tactics are doomed to fail and because Google’s algorithm can change at any time, investing in organic rankings is incredibly risky.
For example, one mid-sized MCA provider secretly shared that they had spent two years and nearly a hundred thousand dollars to get the rankings for the keywords they wanted on Google. Leads were just finally starting to come in on a daily basis when out of nowhere, they got thrown back to page 25. Blog networks were a big part of their strategy and when Google cracked down on them, the MCA provider’s presence on the Internet went down with the ship.
Some MCA companies survived the blog network armageddon only to become extinct on April 24th when Google made a key algorithm change to help defeat web spam. This major update has become notoriously known as Penguin. If you were a victim, you may need an SEO crisis management plan.
In any case, the changes at Google immediately affected unemployment in India, the country that most U.S. companies turn to for SEO services. As their clients sites disappeared from search results, so too did their contracts. At least that is the gag story surrounding a photoshopped image that has been going viral around the Internet.
Debit card savings not being passed along
Remember when all those small business owners got their swipe rates reduced? Oh wait, that didn’t happen. The Durbin Amendment limited the interchange rates, which are the fees that acquiring banks pay to card issuing banks. The rates and fees charged to the small business are still left to the discretion of Merchant Service providers. Sure they can lower the cost if they so choose, but there’s no law that dictates they have to. It seems the Durbin Amendment victory was all one big misunderstanding for America’s retailers. We’ve been following this law since December, 2010. ISO&Agent Magazine just published an article titled, Unintended Results Plague Durbin Amendment. Are they seriously just figuring this out now?
Published by: Merchant Processing Resource
It’s the story that won’t ever die. First it was Dont Make Us Pay and now it’s Where’s My Debit Discount? It’s the latest campaign in an epic struggle between the big banks and congress. Unless you’ve been in a coma for the last two years, the Wall Street Reform and Consumer Protection Act passed on July 21, 2010 and it granted the Federal Government authority to regulate debit card interchange rates. In the year that followed, billions were spent by lobbyists to either diffuse the law or make it stick.
The law has been in effect for several months now but it seems the war isn’t over. The Electronic Payments Coalition is back on the campaign trail to repeal the Durbin Amendment. This time they’re offering proof that consumers are not receiving the savings they were promised.
Without recapping all of the particulars, the news was rampant with misinformation and the chronology of events is difficult to remember. That’s why we have memorialized it with articles that covered the developments of it since December, 2010. How did the war play out? Read below:
Electronic Payments Industry Changing Forever – All points bulletin | December 17, 2010 | In it, we slammed the Federal Government and Senator Dick Durbin for a law we believed would lead to the extermination of the entire banking system. We predicted that rewards on debit cards would immediately disappear, as would the entire concept of debit cards themselves over time. We also surmised that quality, fraud protection, and assurance would suffer.
Debit Card Costs May Be Put on the Consumer – Don’t Make Us Pay | February 18, 2011 | We discovered Dontmakeuspay.org, an organization representing consumers in the fight against debit fee regulation. We encouraged people to sign up.
Congressman Steve Israel Replies to Our Concerns About Debit Card Reform | February 22, 2011 | We signed the dontmakeuspay.org petition and received a letter back from Congressman Steve Israel.
Say Goodbye to Debit Cards | March 11, 2011 | We acknowledged that our predictions were coming true. JPMorgan announced that consumers would likely face a spending cap of $50 – $100 per purchase when using their debit cards.
Debit Interchange Fee Study Act: A Few Good Senators Try to Stop the Madness | March 17, 2011 | At this point our inbox had filled up with emails from people accusing our website of being a secret front for the major banks. The term ‘astroturfing’ came up more than a few times. In our article on this day, we reminded the public that banks employed millions of average Americans, and that they would likely be the ones to suffer if regulations forced monetary losses. We praised the Senators who were trying to muster up support for a bill to put the Durbin Amendment on ice for a few years, while the impact of reform could be studied further. The bill was not successful.
Debit Card Rewards Go the Way of the Dinosaur | March 23, 2011 | JPMorgan announced they will terminate rewards on debit cards for all of their customers as a result of the Durbin Amendment. This affirmed one of our original predictions.
Wells Fargo, Chase, SunTrust Cancel Debit Rewards Program | March 28, 2011 | More of the big banks followed suit.
Interchange Regulation and Reduction | April 16, 2011 | We presented evidence that reform would fail by outlining what happened in Australia when they enacted similar regulations ten years earlier. Small businesses did not save money and consumers did not benefit.
Debit Card Fee Reform is Gaining Steam in Canada | April 18, 2011 | Inspired by the U.S., The Canadian Government Begun Taking Another Crack at Limiting Debit Interchange Fees.
Save My Debit Card Video Finalists | May 9, 2011 | We covered the results of the competition held by dontmakeuspay.org. Some of the videos made by consumers to save their debit cards were pretty funny.
Debit Card Fee Reform to be Finalized June 29 | June 28, 2011 | We made our final prediction on what the interchange cap will be.
Blackjack! 21 Cent Debit Card Interchange Fee Plus 5 Basis Points | June 30, 2011 | Regulations were written as Federal Law. Many sections of the original legislation were clarified, specifically that the fee cap is limited to interchange, the amount card issuing banks make per transaction. There is no cap on the fees that retailers pay at the point of sale. The only party that appears to have been affected are the card issuing banks. Acquiring banks and merchant service providers are not required to lower fees or to pass down the savings to retailers.
And the Misinformation Continues | July 12, 2011 | BusinessWeek had just featured a story about a small restaurant owner that was thrilled that her debit card fees would soon be only 21 cents per transaction. We blasted the story as being factually incorrect since the law did not place any cap on the point of sale. We highlighted the fact that so much misinformation had gone around, that retailers did not realize that interchange fees are the fees acquiring banks pay to card issuing banks. Merchant service providers still control the amount retailers pay. They are not required to share the savings at all. Our e-mails to BusinessWeek did not receive any response.
15,000 Exempt From The Debit Card Interchange Fee Standards | July 14, 2011 | 15,000 banks were apparently exempted from the debit card reform law because they had less than $10 billion in assets. It becomes evident that the law will have strange consequences since it only applies to the largest banks.
Don’t Make Us Pay Goes Quiet | August 7, 2011 | The dontmakeuspay.org consumer movement appeared to have been a secret front for the major banks. A closer look revealed that there may never have been a consumer movement at all.
Revenge for the Durbin Amendment | October 3, 2011 | Bank of America announced a plan to charge their customers a $5 monthly fee to use a debit card.
Don’t Make Us Pay is Back At it Again | October 21, 2011 | Months after the “consumer movement” disappeared, it appeared to rise again when they sent out a mass e-mail.
Where’s the Debit Discount? | December 11, 2011 | The Electronic Payments Coalition (EPC) released a report that illustrated consumers were not experiencing the savings that retailers had promised they would pass down when the debit card fee cap went into effect. The EPC is the same group behind the dontmakeuspay.org movement.
Law to Reduce Debit Card Fees to Retailers Has Opposite Effect | December 12, 2011 | The new law was found to have caused certain retailers to pay higher debit card fees than previously. Retailers began learning that they may not be getting the savings they thought they had won.
We’ve had many negative things to say about the debit card reform law that went into effect a few months ago (AKA the Durbin Amendment). We’ve repeatedly made claims that retailers won’t participate in the savings but for the few that do, those savings won’t be passed on to the consumer.
According to a recent article in the Wall Street Journal, something much worse is happening; Debit card fees are going up!
“Jason Scherr had a lot on his mind the day after he opened his fifth Think Coffee shop in Manhattan last week. The fan was blowing too hard, the classical music was playing a little too loudly—and he was trying to figure out how to get more customers to pay with cash.
Manhattan coffee-shop owner Jason Scherr says his debit-card fees are higher since the Dodd-Frank law.
A new law that was supposed to reduce costs for merchants that accept debit cards has instead sent Mr. Scherr’s monthly processing bills much higher and forced him to reassess the way he does business.
“My choice is to raise prices, discount for cash or get an ATM,” says Mr. Scherr, a lawyer who has been in the coffee-shop business for more than a decade.
Just two months after one of the most controversial parts of the Dodd-Frank financial-overhaul law was enacted, some merchants and consumers are starting to pay the price.
Many business owners who sell low-priced goods like coffee and candy bars now are paying higher rates—not lower—when their customers use debit cards for transactions that are less than roughly $10.
That is because credit-card companies used to give merchants discounts on debit-card fees they pay on small transactions. But the Dodd-Frank Act placed an overall cap on the fees, and the banking industry has responded by eliminating the discounts.
“There will be some unhappy parties, as there always is when the government gets in the way of the free-market system,” says Chris McWilton, president of U.S. markets forMasterCard Inc. He said the company decided that it couldn’t sustain the discounts under the new rate model because the old rates had essentially subsidized the small-ticket discounts.
Merchants now are trying to offset their higher rates by raising prices, encouraging customers to pay in cash or dropping card payments altogether.”
Read the full article at WSJ.com
After months of silence, we received a mass e-mail yesterday from the infamous dontmakeuspay.org:
Tell Your Congressman: Repeal the Durbin Amendment!
You know all too well the harm that the Durbin amendment on debit cards has caused to debit card users like you. Across America, we’re seeing higher fees, the end of free checking and disappearing rewards – without a penny of savings at the cash register.
Fortunately, some members of Congress are standing up for consumers. They’ve introduced legislation that would repeal this harmful amendment and reverse the harm it’s causing for debit card users.
This legislation won’t pass without your help. Click the link to send a letter to your representative, and ask them to co-sponsor this important legislation. And don’t forget to spread the word about this important effort.
Let’s join together and make our voices heard: repeal the Durbin amendment. Don’t make us pay.
The Durbin Amendment doesn’t lower costs for consumers, nor did it hurt the banks as much as it planned. But that isn’t stopping the banks from lashing out anyway. Bank of America is plowing ahead with a $5 monthly debit card usage fee on consumers.
If you don’t use the card, there’s no fee, but if you do, the fee is enforced no matter how little you spend. A solitary purchase of a $1 cup of coffee would bring on the $5 charge, a travesty that has some people outraged.
For those that love to inappropriately translate figures into an APR, that would be the equivalent of 6,000%.
Read more about new debit card monthly fees Here
Electronic Payments Industry Changing Forever – ALL POINTS BULLETIN
Posted on December 17, 2010 at 8:36 PM
Attention business owners and to all those employed in the merchant processing and Merchant Cash Advance industry. The world is changing and not at the ‘global warming will one day kill us all’ pace. It’s happening right now. Remember that little thing called the Wall Street Reform and Consumer Protection Act that passed in July? There was a little itty bitty part in there that we so happened to broadcast and critique in detail on our site, known as the Durbin Ammendment. Take a look the law’s summary, particularly #3. On the evening of December 16th, the Federal Reserve Board delivered an early Christmas present to all the debit card networks and big banks. The gift contained the government’s proposed debit card fee changes, or as some bank executives might tell you, “they mailed us 10 sticks of dynamite.” If you’re serious about this business, read through the 176 page document that every news agency is trying to sum up in 3 paragraphs.
Visa’s stock plunged on the news
Debit cards accounted for 35% of all non-cash transactions in 2009. The proposed changes seek to cap the fee charged for accepting a debit card to a maximum of 12 cents. According to the report issued by the Board, here’s what businesses are paying now:
“Networks reported that debit and prepaid interchange fees totaled $16.2 billion in 2009. The average interchange fee for all debit transactions was 44 cents per transaction, or 1.14 percent of the transaction amount. The average interchange fee for a signature debit transaction was 56 cents, or 1.53 percent of the transaction amount. The average interchange fee for a PIN debit transaction was significantly lower than that of a signature debit transaction, at 23 cents per transaction, or 0.56 percent of the transaction amount. Prepaid card interchange fees were similar to those of signature debit, averaging 50 cents per transaction, or 1.53 percent of the transaction amount.”
Debit interchange fees have always been assessed as a percentage of the sales amount. The larger the transaction size, the higher the fee. Debit cards are most frequently used for smaller purchases but a flat cap on transaction fees regardless of transaction size is a game changer. Now twist this with the fact that interchange fees are almost disappearing altogether and one needn’t think too hard about the unintended consequences.
MasterCard issued a statement immediately. “Experience demonstrates that consumers, not banks or payments networks are the biggest losers as a result of this regulation,” said Noah Hanft, MasterCard’s general counsel. “This type of price control is misguided and anti-competitive, and in the end is harmful to consumers.” Visa hasn’t provided any useful feedback at this time but has openly condemned the report.
The Board acknowledges that some card issuers can’t even cover their own costs with the 12 cent transaction fee in effect. This Board’s direct response to this dilemma is that they simply don’t care. “An issuer with costs above the cap would not receive interchange fees to cover those higher costs. As a result, a high-cost issuer would have an incentive to reduce its costs in order to avoid a penalty.”
Thank you Federal Reserve for the feeble minded, anti-capitalistic solution. “Just lower your costs or we’ll fine you.” The outrage is warranted because the proposal isn’t really a proposal at all. This is the new order granted to the government after the passage of the Wall Street Act back in July. The payment networks and banks may comment on this proposal but effective July 21, 2011, this simply becomes law.
This is the equivalent to forcing all the businesses in America to lower their retail prices under penalty of law as the solution to dealing with consumers whining about the recession.
Additionally, the Board constantly refers to the life cycle of a debit sale to being a 4 party transaction. There is:
* The bank that issued the card to the customer
* The customer
* The business that the customer shops at and uses the debit card
* The acquiring bank that the business uses to accept debit cards
The payment networks are what allow the acquiring banks to communciate with the banks that issued the debit cards. The networks have costs associated with their service, infrastructure, and overhead. The 12 cents per transaction is the combined total that can be charged between both the acquiring bank, payment network, and issuing bank. There’s not a whole lot to go around.
While the Federal Reserve and congress are patting themselves on the back and high fiving eachother for saving the economy (by sticking it to the big banks), the end result will be the loss of millions of jobs, the elimination of debit cards, an increase in other bank fees, the end of all debit rewards programs, the end of electronic payments quality, the end of electronic payments assurance, and the collapse of the free market economy. Give me a high five. Not!
Here’s what will happen and why:
* The Board ignores or does not understand the electronic payments industry business model. The debit card business is not a 4 party transaction. The acquiring bank party encompasses multiple layers and parties in itself. Acquiring bank —> Payment Processor —> Indepedent Sales Office —> Sales Agents. Debit transaction costs are marked up at each level to create a competitive marketplace. The electronic payments industry employs millions of people. With a 12 cent cap and no markup abiliity, those millions of workers will lose their jobs overnight.The majority of this business is commission based, with processors and sales agents directly taking home solely what’s generated on the markup of debit/credit fees of their clients.This is probaby the most blatent and incredibly obvious oversight. There can be no competitive market because costs are fixed and there can be no sales because there is no money for anyone to earn on markups. National unemployment will rise several percent over the course of a few months.
* Rewards debit cards can no longer exist. Card issuing banks currently pay their customers rewards by charging businesses more for accepting a rewards card transaction. Since a bank no longer has that ability, rewards cards can no longer exist.
* Debit cards become a moot point for banks. With no profit incentive to put them in the hands of customers and no ability to compete on price, there is no incentive for debit networks or cards to continue.
* Quality, fraud protection, and assurance will suffer. Banks whose own costs are higher than the imposed cap face fines by the Federal Reserve unless they cut costs. Therefore the government is not only incentivizing poor quality, but in fact making it mandatory.
* Ever hear of too big to fail? This industry is too big to be messing with. These are the actual national and international money networks through which trillions of dollars move through every day. Mandating poor quality, eliminating all competition, and removing profit incentives will de-evolutionize the flow of money altogether.
The Board will review and allow comments through March 31st, at which point this industry will meet its maker. Yes, it’s that’s serious.
Originally published on February 18, 2011.
Back on December 17th, 2010, we published an article outlining the alarming terms of Debit Card Fee Reform. If you haven’t read up on what’s happened, the Federal Reserve has imposed a pricing cap on the cost a retailer pays to do debit card transactions. It’s scheduled to go into effect in July, 2011. The cap is so severe, that it would no longer be financially viable for banks to continue issuing them.
There is of course one solution that would allow banks to continue debit processing and that’s to push the transaction costs to the other party involved, the consumer. This would mean that as a result of the Wall Street Reform Act, consumers will be paying more than ever. How’s that for unintended consequences!
Some people aren’t happy so we’ll cut to the chase and let you know that we found a special gem of an organization, www.dontmakeuspay.org. This website is providing users with up to date information on the new debit card reform law, as well as the proper tools to speak out to politicians. They provide a prewritten letter and automatically address it to the U.S. Senators and Representatives in your state. The full language of it is below:
“As your constituent, I am writing to urge you to stop the debit card interchange rule before it harms debit card users like me.
The only beneficiaries of this harmful rule are retailers, who will take home an additional $14 billion in profits – and consumers will be left to deal with the consequences. The rule does not require that retailers pass along even one penny of their savings to customers. Meanwhile, banks, forced to lose money on debit interchange transactions, will be forced to compensate by increasing fees for deposit customers.
The fact is that retailers receive tremendous benefits when they accept debit cards for payment, including higher sales, lower costs and guaranteed payment. That’s why millions of retailers have chosen to accept debit cards – and that number is growing.
In effect, consumers like me will end up paying for a payments system that provides retailers with extraordinary value.
I don’t want to be forced to pay higher fees, give up my rewards, and lose my free checking account – just so retailers can have an extra $14 billion in profits.
Congress should be in the business of protecting consumers, not forcing us to pay for the costs of giant retailers.
Please repeal this harmful rule before it’s too late.”
We are of course in favor of small business, but it is unlikely that they will reap the supposed benefits either. This is a lose-lose-lose-lose deal. (I think we forgot another ‘lose’ or two). If you’re in favor, sign the letter!
We’ll keep you updated on the developments of this law.
Image Copyrighted by: 123RF
Originally Published on March 11, 2011.
We’ve been saying it since December 2010, that Debit cards will cease to exist when the new Wall Street reform laws go into effect. On February 18th, we argued that the cost of a debit card transaction would shift from the retailer to the customer. You can view that article here: Debit Card Costs May Be Put on The Consumer – Don’t Make us Pay!.
We were right on the mark. Today JPMorgan Chase announced that debit card carrying customers would soon be subject to a purchase cap of $50 – $100 per transaction. As a result, a huge chunk of the U.S. population would no longer be able to make an average size purchae. The new video game system? Too big. A computer? Too much money. A bar tab? Better bring cash…
The reason for such a dramatic change was provoked by Debit card reform. In July 2011, the Federal Reserve will begin enforcing a maximum debit card transaction cost of 12 cents. For card issuing banks, payment networks, acquirers, and ISOs, this 12 cents is too low to be profitable, let alone sustainable. As a result, banks must make up for the loss by charging consumers.
For more information, check out the CNN article.
Originally published on March 17, 2011.
What started as a citizen revolt against Wall Street to both punish them for the previous recession and prevent another one, has now morphed and devolved into a personal battle that threatens to eliminate the use of money altogether.
JPMorgan Chase, one of the largest card issuers in the world recently stated the legislation may force them to limit the amount a consumer can spend in a single debit card transaction to as low as $50. Need a full tank of gas? You better bring cash!
The Durbin Amendment of the Wall Street Reform and Consumer Protection Act will instate a flat 12 cent cap on Debit Card “interchange fees” effective as of July, 2011. The media communicated this cap as a “flat swipe fee”, a term used in such incorrect context that it has even confused executives of major card processors. How can public opinion be formed or swayed when the media and quite possibly the Senators and Congressman that passed the law fail to understand what “interchange fees” actually are and who they are paid to?
The original 176 page study and law can be downloaded here. It outlines on page 7 what they believe to be a 5 party system. It actually refers to it as a 4 party system and then corrects itself in the footnotes.
- Party #1 – The Cardholder/Customer
- Party #2 – The Card Issuing Bank (The bank that gave the customer the card. aka Wells Fargo, Bank of America, etc.)
- Party #3 – The Business/Merchant That is Accepting the Card as Payment
- Party #4 – The Acquiring Bank (The bank that allows the merchant to accept a credit card and services their account)
- Party #5 – The Payment Network (Visa or MasterCard or whichever brand’s logo is indicated on the card or used to transfer information from the merchant’s Acquiring Bank over to the customer’s Card Issuing Bank.)
Party #4 consists of multiple layers including companies that do all or just one of: marketing and underwriting the risk of the debit card accounts, processing the payments, receiving and providing settlement for the transactions, and maintaining the reports while offering support to the merchant.
Add that to the fact that the Federal Reserve at times seems to misuse “interchange fees.” Interchange fees are associated only with Party #2, the Card Issuing bank. The bulk of the report does indeed seem to limit the scope of the 12 cent cap to Card Issuing Banks. That implies and makes evident that the overall swipe fee that merchants pay will not have any such cap at all, but party #2 will be greatly affected. Since the Acquiring Banks are not clearly defined as subject to inclusion in the cap (it’s mentioned vaguely in a few paragraphs and footnotes), then the media frenzied reporting of a “12 cent swipe fee” would not be true at all. The Acquiring Banks and all the layers within them could fill the gap and keep the overall swipe fee that a merchant pays, the same. D’oh!
But Card Issuing banks are up in arms because the cap is impossible to sustain and it is even acknowledged in the report. The report quotes, “An issuer with costs above the cap would not receive interchange fees to cover those higher costs. As a result, a high-cost issuer would have an incentive to reduce its costs in order to avoid a penalty.” With millions of people in the industry, does the Federal Reserve really think that banks have at no point considered how to reduce costs already?
As hard working Americans, we so badly want “Wall Street” and the “Big Banks” to simply be a handful of arrogant individuals in overpriced suits, drinking fine wines, while chatting about their new private jets and weekend trips to Paris. But instead the financial services industry employs millions of individuals, many who make less than $35,000/ year.
How many administrative assistants, customer support reps, technical support reps, risk analysts, underwriters, fraud prevention managers, internal IT & systems support reps, compliance officers, bookkeepers, internal auditors, salesmen, marketers, lawyers, and handlers of human resources do you think are employed in the electronic payments industry?
If these jobs were lost or affected, consider the consequences to the businesses that support them. How many supply companies sell them paper, business cards, printer ink, pens, and staplers? How many accountants do their books? How many IT companies sell them computer hardware and technology? These millions of workers do not starve to death, but rather eat breakfast and lunches at restaurants and cafes near their offices. How many restaurants and cafes depend on their business? How many cleaning services have contracts to maintain their offices? How many dealerships sell these workers cars?
How many of these people are doing the job just to support their families? We are not using the face of the hard working middle class to support our argument, but they will certainly become unwitting victims. While the contributors to our site are involved in the electronic payments industry, we are not executives, higher ups, or even rich. The site’s core message is to guide business owners to get the best deal in an industry that is already highly competitive and tough to understand.
Let us state this: Some banks have excessive profits and some executives in the payment industry are just a little too rich for comfort. But cutting what many experts are saying is $14 Billion dollars worth of revenue as of the result of this legislation isn’t going to affect the big guys, it’s going to clamp down on the little ones.
Didn’t the Article Title Mention Something about Senators?
Some may consider our message to be astroturfing but we’re just explaining the other side of the story. Before we regulate ourselves into a world without debit cards and the loss of a few milliion jobs, we applaud a few good Senators for introducing the Debit Interchange Fee Study Act of 2011. It aims to delay the Durbin Amendment for 2 years until a better system can be created. We like to think of it as taking a deep breath, composing ourselves, and then really trying to tackle the issue.
The sponsors of the Act are:
- Jon Tester D-Montana
- Bob Corker R-Tennessee
- John Kyl R-Arizona
- Ben Nelson D-Nebraska
- Tom Carper D-Delaware
- Chris Coons D-Delaware (What would Christine O’Donnell have done?)
- Pat Roberts R-Kansas
- Mike Lee R-Utah
- Pat Toomey R-Pennsylvania
Everyone wants lower costs but let’s do it right.
Originally Published on March 23, 2011.
And yet another one of our predictions is unfolding….say goodbye to Debit card rewards! Back on December 17th, we specifically stated this would be one of the many casualties caused by the Federal Reserve price cap.
On March 21, 2011 one of the largest card issuers in the world made this announcement: JPMorgan Will Cease Debit-Card Rewards Program Because of Proposed Fee Cap. A quote from the article:
“JPMorgan Chase & Co. (JPM) will stop offering debit-card rewards for almost all of its customers in July to reduce losses from a proposed cap on interchange fees. The company is mailing letters to customers announcing the change, said Tom Kelly, a spokesman for the bank. New York-based JPMorgan said in November it would end rewards for new customers in February.“
Well, we said it once, and we’ll keep on saying it: The Durbin Amendment is bad news!
More articles from us on this topic:
Originally Published on March 28, 2011.
And the damage continues:
“March 26, NEW YORK (CNNMoney) — Debit card rewards programs are vanishing at several major banks.
Wells Fargo said Friday that it will no longer offer its debit rewards program for new customers. This will go into effect March 27 at Wachovia and April 15 at Wells Fargo (WFC, Fortune 500), while existing customers will remain unaffected for the time being.
JPMorgan Chase (JPM, Fortune 500) notified existing customers last week that their debit rewards programs will disappear July 19. The bank eliminated debit rewards for new customers in February.“
See Our Articles on This Topic
Originally Published on April 16, 2011.
As proponents and opponents debate debit card fee reform, few seem to be aware that interchange regulation has been
implemented before and the results were disastrous. In 2000, The Reserve Bank of Australia (RBA) published a 90 page report (A STUDY OF INTERCHANGE FEES AND ACCESS) that outlined their assessment on card payment interchange rates and the impact. It’s central thesis was this: “The study is concerned with the economic efficiency of these [payment] networks. Most importantly, are they delivering the best possible service at the lowest cost to end-users?”
Eerily similar to the U.S. Federal Reserve’s 2010 analysis, the RBA reached the following conclusion: “While a pricing system based on interchange fees still seems to be the most practical arrangement for the credit card network, the levels of interchange fees are high relative to costs and fees of this magnitude are not essential to the continued viability of this network.”
Bolstered by the findings, consumer activitsts groups pushed for regulation and by 2002, the RBA announced that 4 party payment networks such as those operated by Visa and MasterCard would need to make serious changes. Lobbyists groups fought to rally against regulation but came up short. In 2004, strict measures to limit costs became law and with that a series of unintended consequences.
The U.S. should examine the outcome in Australia, a country whose values and economic system is much like our own. 3 years before the Durbin Amendment came to pass, MasterCard did just that. In early 2007, it researched the impact and side effects of regulation in a report titled “Interchange Regulation: Lessons From the RBA Intervention in Australia.” We reviewed the rules that most closely resemble those of the Federal Reserve and have republished MasterCard’s findings below:
Regulatory Measure #1: Reduction of Interchange Costs
Intended Consequence #1: Merchant fees would be reduced, which would then be passed onto consumers, resulting in lower prices for all.
Actual Outcome: 70% of merchants did not realize that any changes had been implemented and thus did not make an effort to pass on savings to consumers. Annual reports actually showed that retailers pocketed the difference instead. This issue has been largely debated in the U.S., with many retailers openly stating that they would not pass on any savings. Proposed New Debit Card Rules May Not Help Consumers Much
Intended Consequence #2: Debit card usage expands while credit usage declines.
Actual Outcome: Debit card usage declined instead. This appears to be the same path the U.S. is on already as implementation of the law approaches. JP Morgan Chase, Bank of America and Citigroup Might Limit Debit Card Purchases
Regulatory Measure #2: Elimination of The “No Surcharge” Rule
Intended Consequence: Merchants would judiciously surcharge for accepting credit cards; and in so doing, make credit usage less attractive than debit usage; which would in turn encourage higher debit card usage.
Actual Outcome: Where surcharging actually occurred, it appeared to be mainly by brand, applied in a way that is not disclosed to consumers, and done mainly outside of retail markets. As of July 2010, the U.S. implemented a similar law under the Durbin Amendment that is already in effect. See an article we wrote on the subject back in December titled “Take Your Rewards Card and Get Out My Store!.”
The outcomes seem to answer questions that we in the U.S. are spending too much time debating. Regulation in Australia was a failure. “Contrary to the RBA’s intention of making the payments system more efficient and increasing competitive intensity, the exact opposite has happened in Australia. In addition, the payments system has actually become more expensive for the average cardholder. While there is no evidence of retail price reduction by the merchants (so confidently predicted by the RBA), there is widespread acknowlegement that issuers have actually increased fees to cardholders to compensate for lower interchange fees since the RBA regulation.”
Consumer rewards programs are already disappearing as reported by CBS News. “Banks to strip debit card rewards; What next?” This is the exact sequence of events that happened abroad. MasterCard addressed this in their report, but did not offer any hard statistics. “For the most issuers, the rewards programs have been downsized, and in some instances very substantially.”
Many believe the shortsighted push for reform has less to do with savings for retailers and consumers and more with to do with a desire for Americans to punish the banks for their role in the financial crisis. The banking industry employees millions of people so the harm intended for rich CEOs is more likely to affect the jobs of the middle class.
There is still hope. A few Senators have proposed the Debit Interchange Fee Study Act of 2011, which seeks to delay regulation for two years. This will allow the Federal Reserve to properly assess the goals they hope to achieve, come up with a better plan of action, and study the likely consequences.
While two years seems fair, we can’t help but point out the chain of events in Australia should be all the evidence we need. Ignorant disdain for the electronic payments industry is a major distraction from the real issues facing our country today. The unemployment rate, the national deficit, and the educational system all lose our full attention every time we quip about debit card fees.
Customers spend more when they pay with plastic. Consumers don’t need to carry bundles of cash in their pocket. Banks employ millions of workers. Everybody already wins. deBanked’s advice? Let’s move on to fix a different system that’s actually broken. We’ll all be better off.
Originally published on April 18, 2011.
Emboldended by the looming implementation of debit card fee regulation in the U.S., Canadians seem to have entered the ring. According to TheSpec, “Canadian retailers are calling on Ottawa to regulate the credit and debit card industry, saying voluntary measures have failed to reduce their costs.”
Previous attempts to lower fees, such as the Voluntary Code of Conduct introduced by the Federal Finance Minister Jim Flaherty have failed to produce any changes. What they hoped to gain from a voluntary code, one can only wonder. However, it does provide the basic framework on which retailers will build their case. Read the below from the Financial Consumer Agency of Canada:
Code of Conduct for the Credit and Debit Card Industry in Canada
The purpose of the Code is to demonstrate the industry’s commitment to:
- Ensuring that merchants are fully aware of the costs associated with accepting credit and debit card payments thereby allowing merchants to reasonably forecast their monthly costs related to accepting such payments.
- Providing merchants with increased pricing flexibility to encourage consumers to choose the lowest-cost payment option.
- Allowing merchants to freely choose which payment options they will accept.
The Code applies to credit and debit card networks, (referred to herein as payment card networks), and their participants (e.g. card issuers and acquirers1).
The payment card networks that choose to adopt the Code will abide by the policies outlined below and ensure compliance by their participants. The Code of Conduct will be incorporated, in its entirety, into the payment card networks’ contracts, governing rules and regulations.
The Code will apply within 90 days of being adopted by the card networks and their participants. Networks and acquirers will have up to nine months to implement Element 1. Issuers will have up to one year to re-issue cards already in circulation that contravene Element 6 or 7.
Requirements for Payment Card Networks
By adopting the Code, payment card networks agree to provide any requested information regarding actions taken by themselves or participants to the Financial Consumer Agency of Canada, for the purpose of monitoring compliance with the Code. In addition, payment card networks agree to pay for the fees associated with monitoring compliance with the Code, as determined by the Financial Consumer Agency of Canada.
1. Increased Transparency and Disclosure by Payment Card Networks and Acquirers to Merchants
The payment card networks and their participants will work with merchants, either directly or through merchant associations, to ensure that merchant – acquirer agreements and monthly statements include a sufficient level of detail and are easy to understand. Payment card networks will make all applicable interchange rates easily available on their websites. In addition, payment card networks will post any upcoming changes to these fees once they have been provided to acquirers.
Payment card network rules will ensure that merchant statements include the following information:
- Effective merchant discount rate2 for each type of payment card from a payment card network;
- Interchange rates and, if applicable, all other rates charged to the merchants by the acquirer;
- The number and volume of transactions for each type of payment transaction;
- The total amount of fees applicable to each rate; and,
- Details of each fee and to which payment card network they relate.
This information must be presented in a manner that is clear, simple and not misleading.
2. Payment card network rules will ensure that merchants will receive a minimum of 90 days notice of any fee increases or the introduction of a new fee related to any credit or debit card transactions. Payment card networks will provide at least 90 days notice to acquirers for rate and / or fee changes and at least 180 days notice for structural changes3.
Notification is not required for fee changes made in accordance with pre-determined fee schedules, such as those based on merchant sales volume, provided that the schedules are included in the merchant’s contract.
3. Payment card network rules will ensure that following notification of a fee increase or the introduction of a new fee, merchants will be allowed to cancel their contracts without penalty.
By signing a contract with an acquirer, a merchant will have the right to cost certainty over the course of their contract. As a result, in the event of a fee increase or the introduction of a new fee, merchants will be allowed to opt out of their contracts, without facing any form of penalty, within 90 days of receiving notice of the fee increase or the introduction of a new fee.
Merchants may not cancel their contracts in relation to fee increases made in accordance with pre-determined fee schedules, such as those based on merchant sales volume, provided that the schedules are included in the merchant’s contract.
4. Payment card network rules will ensure that merchants who accept credit card payments from a particular network will not be obligated to accept debit card payments from that same payment card network, and vice versa.
Payment card networks will not require merchants to accept both credit and debit payments from their payment card network. A merchant can choose to accept only credit or debit payments from a network without having to accept both.
5. Payment card network rules will ensure that merchants will be allowed to provide discounts for different methods of payment (e.g. cash, debit card, credit card). Merchants will also be allowed to provide differential discounts among different payment card networks.
Discounts will be allowed for any payment method. As well, differential discounting will be permitted between payment card networks.
Any discounts must be clearly marked at the point-of-sale.
6. Competing domestic applications from different networks shall not be offered on the same debit card. However, non-competing complementary domestic applications from different networks may exist on the same debit card.
A debit card may contain multiple applications, such as PIN-based and contactless. A card may not have applications from more than one network to process each type of domestic transaction, such as point-of-sale, Internet, telephone, etc. This limitation does not apply to ABM or international transactions.
7. Payment card networks will ensure that co-badged debit cards are equally branded.
Payment card network rules shall ensure that the payment networks available on payment cards will be clearly indicated. Payment card networks will not include rules that require that issuers give preferential branding to their brand over others. To ensure equal branding, brand logos must be the same size, located on the same side of the card and both brand logos must be either in colour or black and white.
8. Payment card network rules will ensure that debit and credit card functions shall not co-reside on the same payment card.
Debit and credit cards have very distinct characteristics, such as providing access to a deposit account or a credit card account. These accounts have specific provisions and fees attached to them. Given the specific features associated with debit and credit cards, and their corresponding accounts, such cards shall be issued as separate payment cards. Consumer confusion would be minimized by not allowing debit and credit card functions to co-reside on the same payment card.
9. Payment card network rules will require that premium credit and debit cards may only be given to consumers who apply for or consent to such cards. In addition, premium payment cards shall only be given to a well-defined class of cardholders based on individual spending and/or income thresholds and not on the average of an issuer’s portfolio.
Premium payment cards have a higher than average interchange rate. They must be targeted at individuals who meet specific spending and/or income levels.
10. Payment card network rules will ensure that negative option acceptance is not allowed.
If payment card networks introduce new products or services, merchants shall not be obligated to accept those new products or services. Merchants must provide their express consent to accept the new products or services.
1 “Acquirers” are entities that enable merchants to accept payments by credit or debit card, by providing merchants with access to a payment card network for the transmission or processing of payments.
2 The effective merchant discount rate is calculated as the total fees paid by the merchant to an acquirer, related to the processing of a specific type of payment card from a payment card network, divided by the total sales volume for that type of payment card.
3 Structural changes are significant changes to the fee structure for a payment card network. This includes the introduction of new types of interchange or other fees, a change to the interchange rate structure or the introduction of a new type of credit or debit card.
There are many similarities with this and reports published in two other countries:
Australia: A Study of Interchange Fees and Access, Year 2000
United States: Debit Card Interchange Fees and Routing, Year 2010
As Canada copies their neighbor to the south to regulate electronic payments, we can’t help but shake our heads. This scenario played out in Australia back in 2004 and the outcome was very different than intended. Debit card costs rose as a result and savings were not passed along to consumers. There is proof that Interchange Regulation and Reduction Will Fail, as outlined in a recent article.
Americans and Canadians enjoy poking fun at eachother’s missteps. This time however, the jokes on both of us. Debit card fee reform will fail and we’ll all be worse off. What did we learn from Australia? Nothing mate.
Debit card fee reform isn’t just a silly debate between businesses and banks. CBS News discusses how consumers will be impacted. Undecided or against this reform? read more and get involved at dontmakeuspay.org. Forceful, harmful regulation isn’t the only solution to lowering the cost of debit card payments.
We would love to hear your feedback!