Home BUSINESS U.S. Justice Department probing Visa over debit-card practices: WSJ

U.S. Justice Department probing Visa over debit-card practices: WSJ


March 19, 2021

(Reuters) – The U.S. Department of Justice is investigating whether Visa Inc is engaging in anticompetitive practices in the debit-card market, the Wall Street Journal reported on Friday, citing people familiar with the matter.

The department’s antitrust division has been probing whether Visa limited merchants’ ability to route debit-card transactions over card networks that are often less expensive, the WSJ reported.

Many of the department’s questions are focused on online debit-card transactions, but investigators are looking in to in-store issues as well, according to the report.

Visa declined to comment. The Justice Department did not immediately respond to a Reuters request for comment.

Visa shares were down 5.1% at $209.48 on Friday morning.

Merchants have long complained about the high cost of network fees, also called interchange fees, which can be 2% or more of each transaction and go to the financial institutions behind the transactions.

The new probe is also examining whether the payment processor’s practices are allowing it to maintain a dominant market share unlawfully, according to the report.

While such investigations are not unusual, this one comes amid a greater interest in the digital marketplace.

Earlier this year, Visa and fintech startup Plaid Inc called off their planned $5.3 billion merger following a lawsuit from the Justice Department aimed at blocking the deal on antitrust grounds.

The Justice Department had argued that the deal “would eliminate a nascent competitive threat” to Visa, which it said was a “monopolist in online debit transactions.”

In the online sphere, the federal government and groups of states filed five antitrust lawsuits last year against Facebook Inc and Alphabet Inc’s Google.

(Reporting by Niket Nishant in Bengaluru; Additional reporting by Diane Bartz in Washington; Editing by Anil D’Silva and Matthew Lewis)