The U.S. Justice Department has filed a civil antitrust suit against Visa, accusing the payments network of maintaining an illegal monopoly over debit payments by imposing exclusionary agreements on partners. The DOJ claims that Visa’s actions have led to American consumers and merchants paying billions of dollars in additional fees. Visa and Mastercard, the two biggest payment networks, have seen a surge in growth over the past two decades, reaching a combined market cap of roughly $1 trillion. Visa, in particular, charges more than $7 billion annually in processing fees.
Regulators and retailers have been increasingly concerned about the dominance of Visa and Mastercard in the market. In 2020, the DOJ filed an antitrust suit to block Visa’s acquisition of fintech company Plaid, and a federal judge later rejected a settlement between Visa and Mastercard that aimed to limit fees and allow merchants to charge customers for using credit cards. The DOJ alleges that Visa has engaged in a deliberate course of conduct to cut off competition and prevent rivals from gaining scale.
The lawsuit comes as part of a broader crackdown by regulators on anti-competitive practices in the financial industry. In February, Capital One announced its acquisition of Discover Financial in a $35.3 billion deal aimed at bolstering Discover’s payments network to compete more effectively against Visa and Mastercard. This story is still developing, and updates are expected.
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