The U.S. Justice Department has filed a lawsuit against Visa, accusing the payments network of maintaining an illegal monopoly over debit payments by imposing exclusionary agreements on partners and stifling competition. The DOJ alleges that Visa’s actions have resulted in American consumers and merchants paying billions of dollars in additional fees, ultimately impacting the price of goods and services. Visa, along with its rival Mastercard, controls the majority of debit transactions in the U.S., generating billions in processing fees annually.
Regulators and retailers have been increasingly scrutinizing the dominance of Visa and Mastercard in the payments industry. In 2020, the DOJ attempted to block Visa’s acquisition of fintech company Plaid, and in March, both Visa and Mastercard agreed to limit their fees and allow merchants to surcharge customers for using credit cards. However, a federal judge rejected the settlement, stating that the networks could afford to provide a more substantial deal.
The DOJ claims that Visa has engaged in exclusionary practices to prevent competition and maintain its market dominance. The lawsuit comes amid a broader push by regulators to address anticompetitive behavior in various industries, including healthcare and finance. Capital One’s recent acquisition of Discover Financial indicates a potential shift in the payments landscape, as more players seek to challenge the dominance of Visa and Mastercard. This story is ongoing, and updates are expected.
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