(Reuters) – The US Department of Justice is investigating whether Visa Inc. is engaging in anti-competitive practices in the debit card market, a source familiar with the matter said on Friday.
The department’s antitrust division checked whether Visa had limited the ability of merchants to direct debit card transactions through card networks that are often less expensive, according to the Wall Street Journal, which was the first to report the investigation.
Visa declined to comment. The Justice Department did not immediately respond to a request for comment.
Visa shares fell 4.7% to $ 210.27 on Friday afternoon.
Traders have long complained about the high cost of network fees or exchange fees, which can account for 2% or more of each transaction and go to the financial institutions behind the transactions.
The industrial group Merchants Payments Coalition, which fights against so-called slip fees, called the probe good news. “The MPC has been concerned about these flow route limitation practices for years and it’s great to see the Justice Department looking into this,” said spokesman Craig Shearman. “Targeting for online transactions is especially important at a time when online shopping has accelerated so rapidly during the pandemic.”
Although such investigations are not uncommon, it comes against a background of greater interest in the digital market.
Earlier this year, Visa and startup fintech Plaid canceled the planned $ 5.3 billion merger following a lawsuit by the Justice Department to block the deal on antitrust grounds. In the process, the government called Visa a “monopolist in online debit transactions.”
The Justice Department previously investigated the credit card payments industry, but settled with Visa and Mastercard Inc. in 2010, when they agreed to allow merchants to provide consumers with incentives to use a low-cost credit card.
American Express refused to settle. He took the battle with the Justice Department until the Supreme Court, which decided in 2018 that it is legal for American Express to ban merchants from trying to direct consumers to cheaper cards.
Report by Niket Nishant in Bengaluru; Additional reporting by Diane Bartz in Washington; Edited by Anil D’Silva and Matthew Lewis