Justice Dept. sues Visa for stifling credit and debit card competition

September 24, 2024 Brooklyn Eagle Staff

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NATIONWIDE — VISA, THE CREDIT AND DEBIT CARD GIANT, IS AT THE CENTER OF AN ANTITRUST LAWSUIT from the U.S. Department of Justice, the Associated Press reported on Tuesday, Sept. 22. The DOJ’s lawsuit alleges that the financial services company exploits its size and market dominance to stifle debit card market competition, hurting consumers and businesses financially.

The complaint, filed in Manhattan federal court, asserts that Visa penalizes merchants and banks who don’t use Visa’s own payment processing technology for debit transactions, even though lower-cost alternatives are available. Visa earns an incremental fee from every transaction processed on its own network. The complaint also claims that 60% of debit transactions in the U.S. are processed in this way, allowing the issuer to charge over $7 billion in fees each year for processing those transactions. Visa is accused of mandating volume commitments on merchants and their banks, in what the DOJ calls “disloyalty penalties.” This practice hinders merchants’ ability to use alternative and lower-cost payment processors.

“Merchants and banks pass along those costs to consumers, either by raising prices or reducing quality or service,” said U.S. Attorney General Merrick B. Garland in a statement. “As a result, Visa’s unlawful conduct affects not just the price of one thing — but the price of nearly everything.”

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