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Visa is accused of creating a monopoly in the debit payment market.
The U.S. Department of Justice has filed a lawsuit against Visa, accusing the company of monopolizing the debit payment market. The lawsuit alleges that Visa is abusing its dominant position by hindering the development of competitors and new innovative solutions. According to the agency, more than 60% of debit transactions in the United States go through the Visa network, allowing the company to charge about $8 billion a year for processing transactions.
Visa enters into exclusive agreements with banks and merchants, obliging them to conduct transactions primarily through Visa, otherwise customers face fines. Even if other payment systems offer lower fees, it becomes unprofitable to use them. Such actions strengthen the monopoly and suppress competition.
Visa is also partnering with potential competitors to prevent them from entering the market as independent players, offering them "monetary incentives" and threatening them with additional fines. The prosecutor's office notes that Visa "has illegally accumulated such power that it can charge fees above competitors' prices". Such activities lead to higher prices for consumers.
The Department of Justice said that Visa prefers to monopolize the market rather than invest in innovation. Visa's dominant position allows the corporation to charge high fees and limit competition, which leads to additional costs for American consumers and businesses, and slows down the adoption of innovations in the field of debit payments.
The Ministry of Justice hopes to bring competition back to the debit payment market through the court in order to protect the interests of buyers and businesses.
Visa is a global corporation with global revenue of $18.8 billion and a high operating margin of 64% (according to 2022 data). In North America alone, operating margin reaches 83%. Visa charges about $8 billion in debit transaction fees annually in the United States, and the total volume of payments worldwide through the Visa network is $12.3 trillion.
Source
The U.S. Department of Justice has filed a lawsuit against Visa, accusing the company of monopolizing the debit payment market. The lawsuit alleges that Visa is abusing its dominant position by hindering the development of competitors and new innovative solutions. According to the agency, more than 60% of debit transactions in the United States go through the Visa network, allowing the company to charge about $8 billion a year for processing transactions.
Visa enters into exclusive agreements with banks and merchants, obliging them to conduct transactions primarily through Visa, otherwise customers face fines. Even if other payment systems offer lower fees, it becomes unprofitable to use them. Such actions strengthen the monopoly and suppress competition.
Visa is also partnering with potential competitors to prevent them from entering the market as independent players, offering them "monetary incentives" and threatening them with additional fines. The prosecutor's office notes that Visa "has illegally accumulated such power that it can charge fees above competitors' prices". Such activities lead to higher prices for consumers.
The Department of Justice said that Visa prefers to monopolize the market rather than invest in innovation. Visa's dominant position allows the corporation to charge high fees and limit competition, which leads to additional costs for American consumers and businesses, and slows down the adoption of innovations in the field of debit payments.
The Ministry of Justice hopes to bring competition back to the debit payment market through the court in order to protect the interests of buyers and businesses.
Visa is a global corporation with global revenue of $18.8 billion and a high operating margin of 64% (according to 2022 data). In North America alone, operating margin reaches 83%. Visa charges about $8 billion in debit transaction fees annually in the United States, and the total volume of payments worldwide through the Visa network is $12.3 trillion.
Source
