Federal antitrust regulators accuse Visa of using its market power in payments to stifle competition in the debit card market, raising costs for consumers and businesses.
The U.S. Department of Justice announced a lawsuit against the credit card giant on Tuesday, arguing that Visa is a monopoly that can block competitors from introducing lower-cost debit cards. The department said Visa is also pushing merchants and banks to reach agreements that would penalize companies that process debit-card transactions using different debit cards or payment systems.
“We allege that Visa has illegally amassed the power to collect fees far in excess of what it could charge in a competitive market,” Attorney General Merrick B. Garland said in a statement. “Retailers and banks then pass these costs on to consumers, either by raising prices or reducing quality and service. As a result, Visa’s unlawful conduct affects not just the price of one thing, but the price of nearly everything.”
According to the complaint, more than 60% of debit transactions in the United States are conducted over Visa’s network, and the company earns about $7 billion a year in processing fees. The Department of Justice alleges that by blocking competitors from bringing alternative debit products to market, consumers and businesses will have to pay billions of dollars in additional fees. The civil lawsuit was filed in the U.S. District Court for the Southern District of New York.
Visa did not immediately respond to a request for comment.
In 2020, the bureau blocked Visa’s proposed $5.3 billion acquisition of Plaid, a financial technology provider specializing in online debit payments, on grounds that the deal would harm competition.
