Department of Justice sues Visa, alleges the card issuer monopolizes debit card markets
Business
60% of debit transactions in the United States run on Visa’s debit network
NEW YORK (AP) — The U.S. Justice Department has filed an antitrust lawsuit against Visa, alleging that the financial services behemoth uses its size and dominance to stifle competition in the debit card market, costing consumers and businesses billions of dollars.
The complaint filed Tuesday says San Francisco-based Visa penalizes merchants and banks who don’t use Visa’s own payment processing technology to process debit transactions, even though alternatives exist. Visa earns an incremental fee from every transaction processed on its network.
According to the DOJ’s complaint, 60% of debit transactions in the United States run on Visa’s debit network, allowing it to charge over $7 billion in fees each year for processing those transactions.
“We allege that Visa has unlawfully amassed the power to extract fees that far exceed what it could charge in a competitive market,” said Attorney General Merrick B. Garland in a statement.
“Merchants and banks pass along those costs to consumers, either by raising prices or reducing quality or service. As a result, Visa’s unlawful conduct affects not just the price of one thing – but the price of nearly everything.”
In a statement, Julie Rottenberg, Visa’s general counsel, said the lawsuit doesn’t take into account the “ever expanding universe of companies offering new ways to pay for goods and services.”
