To the millions of merchants across the nation who have been closely following the credit card merchant interchange antitrust battle against MasterCard, Visa, and major banks since 2005, you are familiar with the lead plaintiff role undertaken by Mitch Goldstone and ScanMyPhotos.com. During the historic $7.25 billion settlement, announced in 2012, there continues to be significant news.
Follow along as the CreditUnion Times profiled the David vs. Goliath fight with this update.
The credit union industry has kept a close watch on the litigation involving credit card interchange, but few people know that the merchant who launched the lawsuit against Visa, MasterCard and six major banks is not a huge retailer. In fact, the lead plaintiff in the largest proposed antitrust settlement in U.S. history is actually a small business owner. Mitch Goldstone, president/CEO of ScanMyPhotos.com, an online photo service based in Irvine, Calif., filed the lawsuit in 2005 with his partner, Carl Berman.
“I tried unsuccessfully to reach out to MasterCard and Visa to request they also lower their fees,” he recalled. “Their disregard caused me to study the electronic payment industry and become an expert on interchange fees.”
As an entrepreneur, Goldstone said, he has worked over the years to keep prices down by using new technologies and efficiencies. “When we started, five dollars was the amount charged to scan a single picture, but due to identifying new ways to digitize photographs, we lowered the price, now to just pennies a scan,” he explained. “The same type of technology should have led to lower merchant interchange fees, as the electronic payment network shifted from manual carbon copy imprinted charge receipts to instant, lightning-fast payments. However, some rates actually went up hundreds of percent.”