On September 24, 2024, the U.S. Department of Justice (DOJ) filed an antitrust lawsuit against Visa, accusing the financial giant of abusing its dominant position in the debit card market to stifle competition and impose unfair fees on merchants.
The DOJ alleges that Visa maintained its monopoly by entering into de facto exclusive agreements with merchants and banks, encouraging them to route most of their debit card transactions through Visa’s network. These agreements allegedly deterred merchants from using competing networks by threatening them with higher fees if they did.
According to the DOJ, Visa’s actions limited competition and increased fees for merchants, leading to fewer choices and higher costs for both businesses and consumers. With Visa processing 60% of all debit card spending in the United States, this lawsuit could have wide-ranging implications for the payment industry.
This lawsuit follows a prior legal battle involving both Visa and Mastercard over interchange fees, where the two companies were accused of overcharging merchants through excessive fees on credit and debit card transactions. As a result, a $5.54 billion settlement fund was established for merchants who accepted Visa or Mastercard branded cards from 2004 through 2019. Merchants are currently filing claims to receive compensation for the inflated interchange fees they paid during this period.
Click here to learn more about the Visa/Mastercard Settlement
