FOR IMMEDIATE RELEASE

Sept. 24, 2024

CONTACT
Carter Dougherty
carter@ourfinancialsecurity.org

                    Lawsuit Against Visa a Vital Step for Consumers and Competition

The just-filed Department of Justice lawsuit against Visa marks a necessary, but not the only, step needed to challenge the anticompetitive practices by the credit card and payment processing company that penalize consumers and restrains robust competition.

“Visa’s strategy is built around reducing choices and raising prices for cardholders while increasing costs for small businesses,” said Patrick Woodall, managing director for policy at Americans for Financial Reform. “Visa wields its market power to extract value from merchants and customers and that ultimately raises prices for everyone.”

The case, focused on debit cards, is an outgrowth of a DOJ investigation into Visa over contract provisions that deter merchants from using other, lower-cost debit processing networks and services as well as efforts to deter new competitors from entering the market. The Visa signature debit cards charge merchants higher interchange fees, also known as swipe fees, than traditional debit point-of-sale transactions. Visa’s practices effectively steer consumers away from less-expensive methods of payment.

“Visa’s ability to collude with card issuers – the banks – to push customers away from better options tells you all you need to know about how market power hurts consumers,” said Christine Chen Zinner, senior policy counsel at AFR. “Visa’s dominant market position has padded the company’s profits but has not delivered better and cheaper service for consumers.”

AFR supports the Credit Card Competition Act, a bipartisan bill that would require large banks, who contract with processors like Visa, to use at least two unaffiliated credit card networks. The legislation mirrors the Durbin Amendment, a 2010 provision that fostered competition in debit card transaction processing.

###