US accuses Visa of monopolizing debit card swipes

Published On Sep 24, 2024, 2:34 PM

The U.S. Department of Justice has filed a lawsuit against Visa, accusing the company of antitrust violations and monopolizing the debit card market. Visa processes over 60% of U.S. debit transactions and allegedly employs tactics such as threatening merchants with high fees and offering financial incentives to suppress competition. The lawsuit aims to dismantle these practices to foster competition in payment processing. This move is part of a broader initiative by the Biden administration to address rising consumer prices, a topic of significance in the upcoming presidential election.

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With the recent lawsuit, Visa could face significant regulatory challenges that may impact its revenue and market position. The allegations of anticompetitive behavior may lead to increased scrutiny and potential fines, which can negatively affect investor sentiment. Additionally, if the court rules against Visa, it may have to change its business practices substantially.

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The U.S. Department of Justice sued Visa for alleged antitrust violations on Tuesday, accusing one of the world's largest payment networks of suppressing competition by threatening merchants with high fees and paying off potential rivals. Visa processes more than 60% of debit transactions in the U.S., bringing it $7 billion each year in fees collected when transactions are routed over its network, the Justice Department said. The company protects that dominance through agreements with card issuers, merchants, and competitors, prosecutors allege.

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