GLG News by Credit Card Experts

Duncan MacDonaldConsultantDuncan McDonald

Will the new DoJ antitrust guidelines tip the scales to favor Visa & MasterCard?

September 10, 2008

Analysis of:DoJ's new antitrust guidelines meaning for bankcard industry | www.usdoj.gov

The new DoJ antitrust guidelines significantly water down monopoly, per se liability, competition and tie-in standards that have propelled government enforcement and private lawsuits by retailers in recent years against Visa, MasterCard and their issuers.  Undoubtedly, the defendants will point to new guidelines to strengthen the arguments that they have not behaved as a monopoly and that their practices not only have not harmed competition but in fact have imcreased it.  At a minimum, the new guidelines could have a asignificant impact on the settlement amount in the consolidated interchange lawsuits in New York.

Duncan MacDonaldConsultantDuncan McDonald

Will the card industry's survival of tight interchange fee caps in Australia similarly doom the fee in the US and EU?

June 23, 2008

Analysis of:Australia shrugs off RBA intervention | www.laffertycardsinsider.com

The Lafferty study indicates that forced reductions of bankcard interchange fees in Australia have not significantly harmed issuer or network profits.  This is the exact opposite of what industry representatives had predicted.  If Lafferty is on target, interchange pricing could be in for similar mandates in the US and EU.

Richard BialekChief Executive Officer Bialek Group

MasterCard Clouds on the Horizon?

June 4, 2008

Analysis of:MasterCard "buy," target price raised | www.newratings.com

The near-term prospects for MasterCard are positive, despite a weak US economy. MasterCard is riding a trend of payment transactions moving from cash and check to card and electronic media. The challenge to MasterCard comes from potentially disruptive regulatory and technology forces that MasterCard must acknowledge and address.

Richard BialekChief Executive Officer Bialek Group

Credit Card Deal on Target for JP Morgan and Target

May 12, 2008

Analysis of:Target in credit card deal with JPMorgan | www.ft.com

The credit card deal announced between Target and JP Morgan makes sense for both parties.  It allows Target to address shareholder concerns regarding its card business and mitigate potential growing credit losses. It enables JP Morgan to further develop its private label retail card strategy by taking a substantial interest in the Target portfolio, while placing limits on its loss exposure. There is protection for both parties as well as options to further extend the relationship.

Richard BialekChief Executive Officer Bialek Group

Discover Goes Global With Diners Club Acquisition – A Positive Step

April 14, 2008

Analysis of:Diners Club assets sold to US card issuer | www.businesstravelworld.com

The Discover Card acquisition of Diners Club International is a positive step, addressing one of Discover's competitive weaknesses, the lack of a strong global merchant acceptance network. But it is only one component of the comprehensive solution needed to address Discover’s competitive weakness versus Visa, MasterCard and American Express.

Duncan MacDonaldConsultantDuncan McDonald

Prognosis for Visa's coming IPO

March 11, 2008

Analysis of:Rocky Road for Visa's IPO | lafferty.com

Investors, including bankcard issuers, want the Visa IPO to be at least as successful as MasterCard's in '06. Visa's global legal problems, which are especially acute in the US and EU, could burden Visa far into the future. The US credit crunch could hold surprises for Visa, more so if Democrats win the White House in November.

Duncan MacDonaldConsultantDuncan McDonald

Benefits of mortgage meltdown to bankcard industry

November 30, 2007

Analysis of:Did Wal-Mart Crics Make Their Case at Hearings? | www.americanbanker.com

To prevent the mortgage meltdown from spreading to payment cards, Congress will suspend aggressive reforms against bankcard lenders and other government pressure (from the feds and perhaps the DoJ) will help to minimize their risks in the interchange antitrust lawsuits.  Thus what Paulson suggests must be taken away on the mortgage side will be covered on the bankcard side.

Duncan MacDonaldConsultantDuncan McDonald

Europe antitrust threats to MA & Visa interchange

November 30, 2007

Analysis of:US Banks Move into Covered Bonds | www.efinancialnews.com

Efforts by the EC and UK to stop cartel price fixing threaten bankcard interchange The threat will worsen if they allow private class actions to enforce antitrust standards.

Richard BialekChief Executive Officer Bialek Group

Litigation Issues Cloud Visa IPO

September 17, 2007

Analysis of:Visa, preparing for IPO, wins OK from SEC | www.reuters.com

The Visa IPO is a noteworthy transaction that has the potential to reshape the payments industry. It offers Visa and its members the opportunity to unlock billions of dollars in value from the business they have built.  But, the potential return could be materially reduced by pending litigation.

Richard BialekChief Executive Officer Bialek Group

Western Union - Behind and Beyond the Boycott.

September 17, 2007

Analysis of:Immigrant groups launch Western Union boycott | www.latimes.com

Immigrant advocacy groups raise valid issues regarding Western Union. Significantly higher remittance fees  and an underinvestment in the immigrant community are the reasons for the boycott. Beyond the boycott advocacy groups should identify and promote remittance alternatives to Western Union, thereby adding a competitive market force to their efforts.

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