June 2, 2023

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Report: DOJ investigating Visa more than debit card business

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Visa is less than investigation by the Division of Justice’s antitrust division more than regardless of whether the firm pushes merchants into extra expensive types of debit card payments

CHARLOTTE, N.C. — Visa is under investigation by the Division of Justice’s antitrust division above whether the firm pushes merchants into much more costly sorts of debit card payments, The Wall Avenue Journal noted Friday.

The investigation is centered on how retailers route debit card transactions when a client can make an on the net transaction, in accordance to the Journal, which cited nameless resources.

San Francisco-dependent Visa declined to comment on the Journal’s report.

Visa earns a payment for each and every transaction that is operate on its community. Even so debit card service fees are strictly controlled soon after Congress handed the Dodd Frank Act following the 2008 fiscal disaster, in what’s identified as the Durbin modification. The reasoning at the rear of the regulation was simply because debit playing cards are generally utilized for scaled-down transactions, where by merchants’ profit margins might be scaled-down, in contrast to high-price transactions that shoppers typically use their credit history playing cards for.

Merchants are supposed to be presented the alternative to run debit card transactions on reduced-charge networks instead of jogging it on Visa’s or Mastercard’s community.

The selection often appears on the pin pads used by buyers when they acquire products at a retail outlet. But that solution is not accessible for on-line transactions, and where these transactions are staying routed could be an anticompetitive observe.

Visa, as the most significant payment network, has faced antitrust investigations in the past. The DOJ blocked Visa’s purchase of the monetary engineering corporation Plaid previously this yr, citing antitrust issues. The corporation has also compensated out billions of dollars over the last two a long time to settle allegations that merchants were overpaying to accept credit and debit cards.

Visa’s stock was down about 5% in afternoon trading on Wall Street Friday.

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