Visa Cooperates with Department of Justice Antitrust Probe into Debit Card Practices
The antitrust division of the United States Department of Justice is currently investigating Visa on its U.S. debit-card
By: : Linda John
Update: 2023-01-31 03:00 GMT
Visa Cooperates with Department of Justice Antitrust Probe into Debit Card Practices The antitrust division of the United States Department of Justice is currently investigating Visa on its U.S. debit-card practices and competition with other payment networks. The Department has called for documents and related information from the credit-card company. The European Commission has also...
Visa Cooperates with Department of Justice Antitrust Probe into Debit Card Practices
The antitrust division of the United States Department of Justice is currently investigating Visa on its U.S. debit-card practices and competition with other payment networks.
The Department has called for documents and related information from the credit-card company. The European Commission has also told Visa it has opened a preliminary investigation into its incentive agreements with clients. In 2019, Visa settled with the European Union over an antitrust probe into card fees.
The investigation dates back to early 2021, followed reports the United States was investigating whether the credit card company uses anticompetitive practices in the debit card market.
The Justice Department has previously investigated the credit card payments industry but settled with Visa and Mastercard Inc in 2010 when they agreed to allow merchants to offer consumers incentives to use a low-cost credit card.
Later in December, the Federal Trade Commission (in short FTC) ordered that Mastercard to cease practices since the agency stated they have illegally blocked merchants' ability to route e-commerce debit-card transactions over competing networks.
The FTC's action came into play as the Federal Reserve had issued regulations in October 2022, clarifying that debit-card routing choice applies to online transactions the same as in-store transactions and that Visa and Mastercard cannot take steps to block debit-card routing. Tokenization and other practices have kept all but about six per cent of online debit transactions from being routed over competing networks.
U.S. regulators are likely to examine payment methods this year, including credit-card swipe fees, buy now, pay later programs and peer-to-peer payments.
Both Visa and Mastercard have faced increasing scrutiny for their dominance in the credit card market. In 2019, Visa had to settle a European Union antitrust probe over card fees.