U.S. Justice Department probes Visa over debit-card practices

A Wall Street Journal report has it that the U.S. Department of Justice is investigating whether Visa Inc is engaging in anticompetitive practices in the debit-card market.

The department’s antitrust division has been probing whether Visa limited merchants’ ability to route debit-card transactions over card networks that are often less expensive, the report noted.

Many of the department’s questions are focused on online debit-card transactions, but investigators are looking in to in-store issues as well, according to the report.

Merchants have long complained about the high cost of network fees, also called interchange fees, which can be 2% or more of each transaction and go to the financial institutions behind the transactions.

The new probe is also examining whether the payment processor’s practices are allowing it to maintain a dominant market share unlawfully, according to the report.

While such investigations are not unusual, this one comes amid a greater interest in the digital marketplace.

Earlier this year, Visa and fintech startup Plaid Inc called off their planned $5.3 billion merger following a lawsuit from the Justice Department aimed at blocking the deal on antitrust grounds.

The Justice Department had argued that the deal “would eliminate a nascent competitive threat” to Visa, which it said was a “monopolist in online debit transactions.”

In the online sphere, the federal government and groups of states filed five antitrust lawsuits last year against Facebook Inc and Alphabet Inc’s Google.


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