Visa Targeted in DOJ Investigation for Potential Unfair Debit Card Practices

The Justice Department has reportedly been investigating Visa for potential antitrust and anticompetitive debit card practices, including whether or not the credit card company has been unfairly hiking merchant fees.  

The DOJ is looking into whether or not Visa has been deliberately routing debit card transactions through more expensive card networks than necessary, according to sources that spoke to The Wall Street Journal. The federal investigation is focused on determining antitrust activity via online transactions and in-store purchases. 

Visa has been the target of criticism from merchants over the high fees they pay to accept Visa credit and debit cards at their businesses. Indeed, fees can amount to 2 percent of a transaction, reports Reuters. While everyday consumers may not be aware of these fees, merchants, including many small businesses, are directly impacted, along with credit card companies that reportedly make a lucrative profit from these network fees.  

Now, the ubiquitous credit card company may be in hot water over allegations it conspired to drive these fees higher for merchants by using illegal antitrust activities.  

Under federal law, merchants are supposed to be given the option to use less expensive card networks for debit card transactions, says ABC News. While most in-store purchases provide that option on the pin pad at the point of sale, the option to run a payment card as debit is reportedly less likely to be provided for online purchases.  

Merchant trade groups told reporters that news of the federal government investigating Visa debit card transactions is welcome.  

“The MPC has been concerned about these practices to limit debit routing for years and it’s great to see the Department of Justice looking in to it,” Merchants Payments Coalition (MPC) spokesman Craig Shearman told Reuters. “Routing for online transactions is particularly important at a time when online shopping has accelerated so rapidly during the pandemic.” 

This is not the first antitrust investigation launched over Visa’s business practices. The credit card company was blocked from purchasing a financial technology company just this year, with regulators citing antitrust concerns, reports ABC News. In addition, Visa has reportedly paid out billions of dollars since the year 2000 to settle claims by merchants that they were being hit with unfair fees.  

The credit card company has not responded to the news of the Visa debit card fee antitrust investigation since it was reported by the Wall Street Journal.  

While this is not a class action lawsuit, Top Class Actions will monitor developments in the story to help keep consumers informed.

Does your business accept Visa debit cards? Have you noticed higher network fees for these transactions? We want to hear from you! Tell us about your experience in the comment section below.  

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