This post was previously removed and now it's back online with minor corrections. We lost 50% of our customers but managed to stay in business. We do not seek any compensation from the companies mentioned as we barely understand whom they are.
I built a small credit card company, we have around 500k users and 2k merchants. We focus primarily on the low-income families, our service is free to users, just merchants have to pay (and our price is 60% lower than visa's) that's how we could outmaneuver pretty much all the big guys in the employee-benefits market. We are a company of just 12 employees now, we live in the cloud, our costs are just a very tiny fraction of the cost our competition faces, they could never compete with us on a level playing field. They were all screwed and they know it, and we received some buyout offers, which we refused.
Then, we started losing some contract for no reason at all. We have the best product, both merchants and users loves us. We start to investigate what was happening, it made no sense. Visa Vale had only 29 (yes, 29) merchants in the city we started losing contracts. They charge 5% per transaction from the merchants and were charging users some fees. So I personally started to talk to companies, merchants and employees to understand what was happening and this is what I found:
Started two months ago, someone started visiting our clients premises (buildings, working sites) and giving handouts to all employees informing that our service was no longer active, that they should migrate to Visa Vale. The handouts were forms that had no information about Visa directly (but it had a field choosing "visa vale" as the provider), they made it in a way that it seemed that the employees were asking for the change, not even the "visa" logo was printed there, they used xerox copies to make it seems like the employees made it, like some sort of petition.
So my partner tried to schedule a meeting with the HR director of one of the companies were this was happening, he didn't want to talk to us. We have a contract with this company for 5 years, this is was just surreal. For our luck, I had a friend that works directly in the HR office of this very company, I called him and asked what was happening, this is what he said: "Look, X (HR director) is getting money from visa vale to ditch your guys and use only Visa Vale for our employees benefits, they are talking to every employee saying that you guys are no longer providing these services" So I called a departament store which we have an excelent relationship, but was canceling our contract, that what's she said: "Look Eduardo, this guy from Visa visited us and we refused to use their product, they want 5 to 7% per transaction but then, he said my Visa credit/debit account would be canceled if I didn't sign only with them, that's why I'm cancelling your contract, sorry. But 40% of our sales are on debit cards you guys are just 8%"
And this is how Visa affiliates works.
The discussion about the matter still can be read here: http://news.ycombinator.com/item?id=4396414
