Justice Department Investigates Debit Card Visa Practices

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Justice Department Investigates Debit Card Visa Practices


The Department of Justice is investigating whether Visa Inc.

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  se livre à des pratiques anticoncurrentielles sur le marché des cartes de débit, selon des personnes familiarisées avec le sujet.

The department’s antitrust division gathered information and asked whether Visa, the largest U.S. card network, has limited merchants’ ability to route debit card transactions over card networks that are often cheaper, said people. Many of the department’s questions focused on online debit card transactions, but investigators also asked about in-store issues, people said.

The survey highlights the important role of so-called invisible network fees for consumers, lucrative for card companies, but a burden on merchants, who often pass the fees in the form of higher prices to customers.
It comes as Department of Justice antitrust law enforcement officials in all jurisdictions have focused on reviewing digital market activities, including in the financial sector, and the business practices of companies. dominant companies.

In the new investigation, the ministry is examining whether Visa’s practices allow it to illegally maintain a dominant market share, the people said.

A Visa spokesperson declined to comment. The Justice Department did not immediately comment.

Antitrust investigators have asked questions beyond the simple issue of debit card routing, some people said. The department also asked about Mastercard Inc. of

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role in the debit card market, and whether fintech companies are true competitors of Visa and Mastercard, one of the people said.

A Mastercard spokesperson did not comment.

The new civil investigation, launched in recent weeks, follows the department’s investigation into Visa’s proposed acquisition of fintech company Plaid Inc., the sources said. The department sued Visa in November over the Plaid deal, alleging the acquisition would allow Visa to illegally maintain a monopoly on online debit, where the department said it has a market share of around 70%.

Plaid was developing innovative and cheaper payment technology that could have posed a threat to Visa, the government alleged. Visa called the lawsuit misguided, saying Plaid was not in fact a competitor.

The companies abandoned the deal in January, citing the potential length and complexity of the litigation.

The way debit card transactions are routed has been a long-standing point of contention between merchants and card companies. The Durbin Amendment, which is part of the Dodd-Frank Act of 2010, requires merchants to be able to choose from at least two unaffiliated debit card networks to route transactions.

Merchants have claimed for years that they are often unable to route online debit card purchases over smaller networks, such as Shazam or NYCE, when the name of Visa or Mastercard is on the face of a card. . Merchants claim that as a result, they often end up paying higher network fees than they would pay lesser-known networks.

The Justice Department is seeking information on the financial incentives Visa offers to banks that issue cards on its network, according to one of those familiar with the matter. He is investigating whether these incentives encourage banks not to allow routing on other networks, the person said.

The DOJ also asked about debit card routing practices related to new payment methods, one of the people said. This includes when debit cards are used with mobile wallets like Apple Pay and separately when in-store customers pay by tapping on debit cards at payment terminals rather than inserting them.

Separately, the Federal Trade Commission has investigated Visa and Mastercard debit card routing. Senator Richard Durbin and Representative Peter Welch also raised the issue in a letter to the Federal Reserve last summer.

Write to AnnaMaria Andriotis à [email protected] and Brent Kendall at [email protected]

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