Payments Volume Growth Boosts Visa’s 2018 Earnings; Key Initiatives To Drive Future Value (October 29, 2018): [Still waiting for fiscal 2019 figures – expected to be 12% to 15% greater]:

In fiscal 2018, Visa’s number of cards (including virtual cards) increased by about 80 million to 3.3 billion. The total [gross purchase] volume [throughput] surpassed a record $11 trillion [just for the Visa banks alone], driven by 182 billion transactions during the year. The company’s payments volume growth remained strong across the globe, with double-digit growth (in constant dollars) in all regions except Europe. [forbes.com website, December 17, 2018]

POP QUIZ

Everyone knows that by paying off their credit card balance in full every month that they are effectively receiving a free loan from the card-issuer (by total $ purchase-volume-throughput about 98% of all card-users do so in fact).

Question 1: How are the world’s aggregate credit/charge-card issuers able to pocket the USD-equivalent of about $2 billion a day ($2,000,000,000) in concealed-credit-charges – about $1 trillion ($1,000,000,000,000) roughly every 18 months – making free loans? Explain your answer.

Question 2: Why does it cost as little as 1% or 50 cents to process a $50 credit/charge-card transaction to pay for gasoline, but up to 6% or $30 (60-times-more) to process a $500 credit/charge-card transaction to pay for dinner at an expensive restaurant? Explain your answer.

Question 3: Why does it cost-in-fact less than 2 cents to process a $1,000 debit-card transaction, but up to $60 (3,000-times-more) to process a $1,000 credit/charge-card transaction? Explain your answer.

Question 4: How are the world’s aggregate credit/charge-card issuers able to pocket $1 trillion ($1,000,000,000,000) in concealed-credit-charges roughly every 18 months without all consumers overpaying by $1 trillion every 18 months? Explain your answer.

Question 5: Where do you believe the money comes from to pay for air miles and membership rewards programs? Explain your answer.

Question 6: About 10% or $200 million a day of the total is a direct commission or handling-fees from VAT and other government sales-taxes that are run through these accounts. How are roughly 25,000 PhD’s in Economics globally able to remain oblivious to it? Explain your answer.

Question 7: Given that virtually every credit/charge-card transaction prima facie offends up to two dozen criminal-law / racketeering laws, how is it that the broadly-defined justice department of every country in the world fails to prosecute the card-issuers? Explain your answer.

Question 8: Does the minimum $10 billion per year ($10,000,000,000) that is kicked-back directly as rewards to card-carrying judges, lawyers, politicians, political-parties, court-system-workers, and the owners and employees of credit-reporting agencies affect your answer to Question 7? Explain your answer.

Question 9: What allegedly-intelligent species on planet Earth has become so habituated to nominal authority over common sense that it can be systematically looted of $1 trillion ($1,000,000,000,000) every 18 months while genuinely believing something as transparently ridiculous and flat-out-stupid as the free loan story? No need to explain your answer.

POP QUIZ

Short-Answer Key

How much is $1 trillion ($1,000,000,000,000)?

Before reviewing the POP QUIZ Short-Answers, and to grasp the enormity of the myriad crimes being committed, it is necessary to first grasp the enormity of the amount of wealth / purchasing-power that is being diverted into the pockets of the entrenched-money-power as an ongoing rake-off from the (mostly-labour-based) income of the masses.

Assume that you need to build, from scratch, (and sell) an automobile that sells for $50,000 in order to obtain $10,000 of gross operating profits. To obtain $1 trillion ($1,000,000,000,000) in such gross operating profits from your productive activities it is necessary to build and sell 100 million (100,000,000) such automobiles!

BMW, to take a closely-representative example, has a market value (2019 market cap) of about $25 billion, and directly employs about 135,000 people worldwide. With $1 trillion you could theoretically purchase forty (40) such corporations and all their collective assembly plants and other infrastructure that would employ over five million workers worldwide.

A typical modern major automobile assembly plant working at more or less full capacity will produce about 1,000 new automobiles per day. So assuming 500 production days every 18 months, it would take the equivalent of 200 such assembly plants to produce 100 million automobiles over 18 months – that’s 200,000 such new cars every day.

If the costs could be directly itemized, then there would be or need to be two hundred (200) such automobile assembly plants worldwide, and all associated labour and manufacturing / sub-assembly plants (steel, aluminium, glass, plastics, chassis, tires, engines, transmissions, batteries, electronics, etc., etc.) all working up to 24/7 to produce the output necessary to obtain $1 trillion of gross operating profit.

If the core component inputs (from digging the ore out of the ground to make the steel, aluminum, etc., to pumping the oil from the ground to make the plastics, to obtaining the sand to create the window glass, etc., etc.) represent the same again as final assembly, then it would be necessary to marshal an army of ten million relatively sophisticated industrial employees and artisans to produce and sell 100 million relatively high-end automobiles to obtain $1 trillion of new discretionary economic power.

The entrenched-money-power obtains the same $1 trillion roughly every 18 months not by building and selling 100 million (100,000,000) relatively high-end automobiles, but by running a few megawatts of electricity each day through an installed computer network that they have built up over a 60-year period, and paid for entirely with a tiny portion of the rake-offs themselves.

So let that sink in for a minute or two. A global computerized-bookkeeping-organization is quietly concealing and skimming the same amount from the global economy, every – single – day, as would require the marshalling of an industrial army of ten million skilled workers at 400 major industrial-scale / world-class factories and assembly plants to produce from scratch and sell 200,000 high-end automobiles, every –  single – day.

They also and concurrently harvest (or double-dip for) another circa $500,000,000,000 ($500 billion) (on the same credit) every 18 months as interest-called-interest on outstanding account balances.

They then tell the public that the reason they have to charge such outrageously high rates on outstanding balances is that they have to cover their losses from the free-riders who take-advantage-of-them by paying their full balances every month.

And all in respect of actual processing costs that are no more than about $10 billion every 18 months. And even that is ten-times-greater than the accumulated inter-generational-family-fortune of the world’s then purportedly richest human and first billionaire Howard Hughes in the early 1970’s.

It is, in essence, a competition among all the card-issuers to see who can tell the most outrageous and in-your-face-stupid-story to the public and get away with it.

And at the end of each 18-month period, the aggregate card-issuers might also send the following group Thank-you Note to their aggregate cardholders:

Dear Cardholder(s): We sincerely want to thank-you for paying an extra $1 trillion into your accounts over the past 18 months to cover our pretended Merchant Fees as such has given us all an extra $1 trillion ($1,000,000,000,000) to spend on corporate jets, limousines, five-star hotels, vacation-resorts, mansions, beach-houses, Ferraris, Porches, Mercedes Benz’s, yachts, art-works, gold, silver, diamonds, etc., and, above all, Bonuses! Bonuses! Bonuses!

But more than that, because of the unique character of that wonderful thing that we here all know as interest (even though we almost never call it that by name) and because we skimmed the extra $1 trillion from your account-payment-stream, not only did we gain that extra $1 trillion as income and profits, but it was also not applied to reduce the true / actual outstanding balances of your accounts, so that after paying in that extra $1 trillion, you still owe us that extra $1 trillion!!! Hey! Life is great and we really really appreciate you taking advantage of us through our free loan system. Here’s looking forward to another great accounting period and another bonus $1 trillion of your earnings over the next 18 months!”

SHORT ANSWERS

Question 1: How are the world’s aggregate credit/charge-card issuers able to pocket the USD-equivalent of about $2 billion a day ($2,000,000,000) in concealed-credit-charges – about $1 trillion ($1,000,000,000,000) roughly every 18 months – making free loans? Explain your answer.

Short answer: They do pocket $2 billion a day as concealed credit charges, but they don’t make free loans. At best they are obscenely expensive loans. The card-issuers are, first, and for obvious reasons, pathologically and obsessively secretive about both the fact and amount of the concealed-credit-charges.

[Update (April 2020) – still waiting / searching for global fiscal 2019 figures, but for US by itself:

Card and Mobile Payment Industry Statistics | The Nilson …
nilsonreport.com:

Visa, Mastercard, American Express, and Discover cards in the U.S. generated $6.698 trillion in purchase volume in 2019, up 8.5% over 2018.

___

Assuming US accounts for 30% of global total, the global total throughput (just for these four card-issuers) would be the USD-equivalent of about $22 trillion. An average 3% Price Discount and corresponding (pretended) Merchant Service Charge (concealed-credit-charge-in-fact) would generate about $660 billion a year or roughly $1 trillion every 18 months – but that does not include the other approximate 25% of card-issuers (gas cards, department store cards, other retail cards, etc.). Nor does it include debit-card fees that are often 20-times greater than actual processing costs (e.g., 40 cents charged versus 2 cents actual cost). The all-in-cost of card-processing-fees (aggregate rake-off) worldwide may in fact already be well in excess of $1 trillion ($1,000,000,000,000) per year. (Of course after a short surge in pre-lockdown sales charged to credit/charge-card accounts, there will be a corresponding steep decline in gross throughput as economic activity declines precipitously.)]

They also use the so-called clearinghouses, principally Visa International and Mastercard International, as de facto decoys to suppress public appreciation of the fact that well over 90% of the gross revenue is split more or less 50/50 between the nominal merchant’s-bank and the card-user’s bank. Whenever you see mention of revenues or profits for Visa or Mastercard they are almost always in reference to the relatively minor (but still absolutely huge) amounts retained or redirected to the clearinghouse (which was until relatively recently owned by the same banks / card-issuers anyway).

As an additional cognitive firewall, when it is necessary or unavoidable to make public reference to them, all of the card-issuers refer to them as Merchant Fees or Merchant-Discount-Fees so as to falsely and fraudulently state or imply that they are paid by the merchants.

The concealed-credit-charges are physically paid to the card-issuer by the card-user at the end of the concealed-credit-charge-accrual-period which the card-issuers call a statement-period or far more commonly a grace-period. The merchants have to agree to the rate and corresponding price discount, but it is the card-users who actually pay them – both in theory and in practice.

Over any significant period it is the corresponding on-going aggregate card-user income that is being harvested. Without that the business it is not feasible (and certainly not at this level).

And all of the card-issuers are legally required to – and do in fact – recognise and record the fees as credit-charges and interest-income received from the card-users and not the merchants. If the card-user does not pay, then the card-issuer never receives the fee at all, and that reality of banking and credit cannot be avoided by a label.

And if you do manage to corner them on it, they will blurt out something like: “It’s not a credit charge – it’s a discount for cash!”. So if a given merchant is required to give a 3% price discount for MasterCard, a 4% discount for Visa, and a 5% discount for American Express, then how much is the price of the merchandise and how much is the discount for cash? Well obviously there is no answer because there is a different concealed-credit-charge depending on the provider of the free-loan.

Questions 2 & 3:

Question 2: Why does it cost as little as 1% or 50 cents to process a $50 credit/charge-card transaction to pay for gasoline, but up to 6% or $30 (60-times-more) to process a $500 credit/charge-card transaction to pay for dinner at an expensive restaurant? Explain your answer.

Question 3: Why does it cost-in-fact less than 2 cents to process a $1,000 debit-card transaction, but up to $60 (3,000-times-more) to process a $1,000 credit/charge-card transaction? Explain your answer.

Short answer: The cost of processing a transaction does not change with the amount or purpose of the transaction. The card-issuers simply adjust their fee-rates (required price discounts) to correspond to the maximum amount that can be concealed within the retail-price-structure of a given consumer-goods-and-services-provider. Margins are very tight for gasoline and so there is only a 1% concealed price discount for card-users. Price sensitivity at expensive restaurants is much lower and so the restaurant owners have to give up to a 6% price discount in exchange for access.

According to industry-trade-publications it costs the card-issuers less than two cents per transaction. The general attitude is: Look, if the broadly-defined public can be kept almost wholly in the dark, and then if absolutely necessary made to believe the story that it costs 60-times more to process a voucher for an expensive dinner at a high-end restaurant than to process one to pay for gasoline, and 3000-times more to process a $1,000 credit/charge-card transaction than a $1,000 debit-transaction, then why shouldn’t we take advantage of that and gouge them to the nth-degree? Yea, that’s it, we’re not really committing a massive and carefully coordinated global-racketeering-fraud, because our victims deserve to be screwed for being so stupid (for being in a stupor).

The public will believe anything that we tell them, so why not get obscenely and near-inconceivably rich for nothing by telling them lies? After all – who is going to stop us?

Questions 4 & 5:

Question 4: How are the world’s aggregate credit/charge-card issuers able to pocket $1 trillion ($1,000,000,000,000) in concealed-credit-charges roughly every 18 months without all consumers overpaying by $1 trillion every 18 months? Explain your answer.

Question 5: Where do you believe the money comes from to pay for air miles and membership rewards programs? Explain your answer.

Short answer: Obviously they are not so able. For the aggregate card-issuers to harvest $1 trillion in concealed-credit-charges every 18 months, all broadly-defined consumers (cash, debit, cheque, credit (whatever)) have to overpay by $1 trillion every 18 months.

The money to pay for broadly-defined membership-rewards and air-miles programs comes from the concealed-credit-charges.

This isn’t bleeping rocket science.

Question 6: About 10% or $200 million a day of the total (rake-off) is a direct commission or handling-fees from VAT and other government sales-taxes that are run through these accounts. How are roughly 25,000 PhD’s in Economics globally able to remain oblivious to it? Explain your answer.

Short answer: Some 25,000 PhD’s in Economics globally are able to remain oblivious to it is because most anyone with a PhD in Economics suffers from a severe case of SDS or Systematized-Delusion-Syndrome:

“A “systematized delusion” is one based on a false premise, pursued by a logical process of reasoning to an insane conclusion ; there being one central delusion, around which other aberrations of the mind converge.” Taylor v. McClintock, 112 S.W. 405, 412, 87 Ark. 243. (West’s Judicial Words and Phrases (1914)).

These economists spend their professional careers obsessing over their logical processes of reasoning without it ever occurring to them that they might perhaps want to spend a little time examining their (false) premises so as to avoid insane conclusions like banks being in the free loan business.

Meanwhile, most bankers are laughing-their-asses-off at us because they make more money skimming the sales-tax revenue than they pay in income taxes! Isn’t that special.

Question 7: Given that virtually every credit/charge-card transaction prima facie offends up to two dozen criminal-law / racketeering laws, how is it that the broadly-defined justice department of every country in the world fails to prosecute the card-issuers? Explain your answer.

Short answer: The hierarchy / superstructure of the majority of nations in the world is comprised of de facto agents of the entrenched-money-power. Just as a convenient starting point, if we could go back in time almost 800 years to the castle of King Edward I (Edward Longshanks), then we would witness a general meeting that went something like this:

King: My Lords, who am I?

One of the Lords: Why thou art king sire.

King: That’s right. And as king, what is my job?

One of the Lords: Well your job is to reign over your kingdom and…

King: NO! My job as king – my real job – is to arrange things today to make absolutely certain that my great-grandson is king seventy-five years from now. And if I succeed, then all of your descendants will also be in the same privileged position as you are now, and it will continue like that forever.

Nothing substantial has changed in the ensuing near-800 years. Virtually everything these people do is to make certain that the little people including and especially the working-poor stay that way forever, so that they and their descendants will lord it over the rest of us, forever.

That is why virtually all truly important positions globally are made by direct appointment. That is why the vast majority of judges are former bank-lawyers or bank-solicitors directly appointed by former bank-directors or bank-solicitors. The entrenched-money-power decides who the people are allowed to choose from in so-called democratic elections, and then those de facto puppets directly appoint the people who occupy the positions that can make a difference. And nobodybut nobody – gets so appointed unless and until the entrenched-money-power has enough on them to make certain that they can be controlled.

The entrenched-money-power has one-year-plans, five-year-plans, ten-year-plans, twenty-five-year-plans, fifty-year-plans,100-year-plans, and quite probably 500-year-plans, and all the money they need to pay for the small armies of analysts and consultants and the all-around-sycophants needed to help them execute those plans, while the average or typical member of the-little-people whose wealth they harvest has at best a five-year-plan based on limited and normally deliberately erroneous / falsified information.

Question 8: Does the minimum $10 billion per year ($10,000,000,000) that is kicked-back directly as rewards to card-carrying judges, lawyers, politicians, political-parties, court-system-workers, and the owners and employees of credit-reporting agencies affect your answer to Question 7? Explain your answer.

Short answer: Yes, absolutely. That’s one important reason why they make the kick-back payments in the first place. Once society’s de facto decision-makers and material administrators are on the gravy-train (and it doesn’t take much) it becomes almost impossible to even get them to see the massive criminality of it – let alone actually do their jobs and act upon it.

It is closely related to the process of looking-the-other-way while the card-issuers wholly ignore the accounting laws and legislative rules on defaults.

Most briefly, this business is so mind-bogglingly lucrative – the greatest free-money-gravy-train in the history of the world – that the only way to control it among the privileged-players (card-issuers) is to require 100% write-offs on any account that has been in arrears for 180-days.

If a card-issuer makes a bad business decision by issuing either too many cards or too much credit in respect of a given account – then that card-issuer is supposed to suffer the loss as a penalty for its bad business decision.

But their collective answer to that is: “NO! NO! NO! – The entrenched-money-power never even pays for its mistakes – let alone be punished for them. Only the little people get punished for their mistakes.”

That is why they disregard the law and purport to sell the defaulted accounts to debt-buyers for as little as four cents on the dollar even though the administrative overhead of it means that they actually lose money overall by doing so.

Everyone would be better off if they were to simply obey the law and write-off the account. The fact and amount of it would still be reported to the credit-reporting agencies, and the defaulting card-user would still find it commensurately more difficult and expensive to (nominally) obtain credit in the future – but the debt would be gone and everyone involved – and I mean everyone – would be vastly better off. It would also avoid or at least limit cascade-failure to their secured debt like car loans and mortgages.

But to the entrenched-money-power it is better to drive thousands upon thousands of people to abject poverty, despair, and even suicide rather than allow the little people to even form the thought that their betters should be or even might be subject to the same rules as themselves.

Question 9: What allegedly-intelligent species on planet Earth has become so habituated to nominal authority over common sense that it can be systematically looted of $1 trillion ($1,000,000,000,000) every 18 months while genuinely believing something as transparently ridiculous and flat-out-stupid as the free loan story? No need to explain your answer.

Short Answer: Humans.

And, here again, after, say, three consecutive cycles (4.5 years) of skimming $1 trillion every 18 months,[1] and stuffing an extra $3 trillion into their pockets as extra / concealed interest income, their outstanding balance interest rates are so high that their aggregate card-holder base still owes them up to another $5 trillion because of it!

Whoever could have guessed that working both sides of the street could be so lucrative?

“Yes, technically you paid us that $3 trillion from your labour income, but because we counted it as interest for our account, we didn’t use it to pay down your outstanding balances, and because our rates are so high, you currently still owe us another $5 trillion.”

Just to be clear, if you take a 4.5-year payment stream and apply it to the same aggregate (ascending) account balance – less the amount by which that balance has been inflated by the pretended merchant fees, then at the end of the 4.5 year period the difference is not $3 trillion but $8 trillion!!! And it is comprised of the relative extra $3 trillion to earned interest income on the banks’ income statements, plus an extra $3 trillion of outstanding balances because the same $3 trillion that went to interest was not used to reduce the outstanding balances, plus another approximate $2 trillion of compounded interest at the 15% to 20% per annum outstanding-balance-rate for 4.5 years on the ever-ascending-balance-difference.

Although, to be fair, $8 trillion is only the theoretical maximum. In practice the total is only somewhere between $6.5 trillion and $7 trillion because the free-riders who pay in full every month don’t incur the 15% to 20% balance rates but would have used it (the concealed-credit-charges) instead to buy down their other lower-rate mortgage debt, car-loan debt, etc.

And even though a reasonably-competent high-school student can easily figure out what is going on from the very figures that the Canadian Bankers Association has supplied to the minimum five-consecutive Parliamentary Investigations into the Credit/Charge-Card Industry in Canada over the past 40 years, the appointed members of those Investigative Committees who belong to the same political parties who (both the individuals and their parties) are receiving direct kick-backs from the concealed-credit-charge revenue have never failed to officially conclude that the Card-Issuer’s official and transparently fraudulent explanation is correct, and that all Canadians need to keep running those purchases through the banks’ free loan system to take advantage of those same banks.

In every case the respective Committee has concluded that the bankers’ public explanation is correct – that they are forced to charge such outrageous rates on outstanding balances because they effectively lose money on every transaction where the card-user pays off their full-balance within the statement / grace-period so as to effectively receive a free-loan from the bank / card-issuer. From the various official conclusions / final-reports (see The Free Loan Story for specific citations):

  • the effective yield to card issuers is below the posted rate on credit cards…
  • ..someone [“interest payers”] is financing credit card balances that are repaid before the end of the grace period..
  • What this discussion does highlight is that the grace period is costly to the card issuer – someone must be paid for the funds used to finance a purchase made with a credit card…
  • This practice is obviously costly for financial institutionsThe bonus card-users receive by taking advantage of the grace period is a cost to the card issuer….
  • So, how do card issuers allow for the cost – the lost potential revenue – from those card-users who take advantage of the grace period?
  • That some cardholders receive what is in effect a free loan should not lead others to believe that they too deserve a free loan.

And all Canadians have to effectively pay the multi-million-dollar costs of these so-called government investigations that simply ratify the bankers’ ridiculous stories!!! Same in virtually all other countries around the world.

Meanwhile, in Canada alone, the constructive trust that just keeps ballooning ever larger from over fifty (50) consecutive years of flagrantly illegal sales-tax-skimming is now, with interest, well into the multiple-trillions of dollars! Compounded interest charges are a double-edged sword.

So when, exactly, are these technical and actual domestic and international racketeering criminals intending to pay it all back?

Bankers: When pigs fly! We’ll let you know. Meanwhile get back to work! After all, if we are ever held accountable to our criminal-law-offences, then everybody knows that the economy will collapse!! HA! HA! HA! HA! HA! HA! HA! HA!

WARNING! – In the maximum 30 minutes it took you to read this eight-page short-answer-key, the global issuers of broadly-defined payment-cards skimmed another minimum $60 million ($60,000,000) from the global economy.

You may now return to your regularly-scheduled programming.

Footnotes / Endnotes

  1. As a snapshot-in-time for measurement purposes – the actual amount is growing so fast that it (credit/charge-card concealed-credit-charges alone) will likely be closer to $1 trillion per year within the next four to five years.