Its all go for Visa right now, having raised interchange fees in the UK, The Justice Department is now investigating whether it is engaging in anticompetitive practices in the debit card market.
Visa facing DOJ antitrust investigation over Debit cards
The department’s antitrust division has been gathering information and asking whether Visa, the largest US card network, has limited merchants’ ability to route debit card transactions over card networks that are often less expensive, according to people familiar with the matter.
Many of the department’s questions have focused on online debit card transactions, but investigators have asked about in-store issues as well.
The probe highlights the important role of the so-called network fees that are invisible to consumers, lucrative for card companies, but a weight on merchants, who often pass on the fees in the form of higher prices to customers.
It comes as Justice Department antitrust enforcers across administrations have placed an emphasis on scrutinising digital-marketplace activities, including in the financial sector, and on investigating the business practices of dominant firms.
In the new probe, the department is considering whether Visa’s practices are allowing it to maintain a dominant market share unlawfully, the people said.
Visa confirmed the probe in a regulatory filing Friday 19th March. It said it is cooperating with the Justice Department. The company said it hasn’t yet received a civil subpoena from the department but “we have received a notice to preserve relevant documents related to the investigation.”
“We believe Visa’s US debit practices are in compliance with applicable laws,” the company added.
The new civil investigation, launched in recent weeks, follows on the heels of the department’s investigation of Visa’s proposed acquisition of financial-technology firm Plaid Inc., the people said.
The department sued Visa in November over the Plaid deal, alleging that the acquisition would allow Visa to unlawfully maintain a monopoly in online debit, where the department said it holds a roughly 70% market share.
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