Foster City payment processor Visa being probed over abuse of debit-card dominance
by SOURAV D | VIEW 5873
The US Department of Justice has launched a probe on online payment processing giant and debit card provider Visa Inc over accusations that the Foster City, California-based financial services company that facilitates electronic payments mostly through its Visa-branded credit, debit and pre-paid cards, might be engaged in anti-competitive practices in a much-monopolized US debit-card market, a Wall Street Journal report had unveiled late on Friday citing unnamed sources familiar with the subject-matter. Aside from that, the Wall Street Journal report had quoted sources as saying that US Justice Department had been investigating a systemic loophole under which Visa Inc might be able to curb out merchants’ ability to re-route debit-card transactions over other less-expensive card networks by hiking a so-called interchange fee. However, while being asked over the subject-matter, neither Visa Inc nor US Justice Department had commented over the issue, though the report about Justice Department’s investigation on Visa Inc came forth as a sigh of fresh breath for digital marketplaces amid a sharp uptick in e-commerce volumes in a pandemic-era new normalcy.
US Justice Department launches probe on Visa Inc
On top of that, latest Wall Street Journal report that underscored an ongoing probe on Visa Inc over its abuse of dominance in debit-card market, comes over the heels of a cascade of complaints about higher network fees or interchange fees, which could be 2 per cent of more of each transaction.
Meanwhile, an industry group, the Merchants Payments Coalition (MPC) that has long been wrestling a staggering upsurge in so-called swipe fees, had welcomed the probe, while a spokesman for the group, Craig Shearman said late in the day, “The MPC has been concerned about these practices to limit debit routing for years and it’s great to see the Department of Justice looking in to it.
outing for online transactions is particularly important at a time when online shopping has accelerated so rapidly during the pandemic. ”