Visa Under Justice Department Investigation For Alleged Antitrust Violations
Financial services company Visa is currently being investigated by authorities from the United States Justice Department for alleged anticompetitive and antitrust violations.
Per a report, Visa is being scrutinized by investigators for antitrust behaviors concerning reports of the company imposing a higher merchant fee.
The Wall Street Journal sources privy to the investigation proceedings, federal authorities are looking to determine whether Visa has deliberately directed debit card transactions through more expensive card networks under its guise.
Allegedly, Visa, along with other card companies, profit from these potentially illegal acts of rerouting card transactions through pricier card networks.
Visa and other companies reportedly earn a lot of money from network fees for every transaction that it processes.
Visa has long been the recipient of criticisms from industry observers and business owners alike for the high service charges they ask from its customers.
Visa debit and credit cards are widely used in financial transactions – with the company charging two percent per successfully processed financial transaction.
The everyday Visa cardholder may be fully not aware of this very high fee, but small and medium-sized businesses who use the company’s offerings as their main financial lifeblood feel the full impact of such high fees.
As of writing, merchant trade groups in the U.S. have voiced their support for the ongoing Justice Department probe.
They expressed their relief that authorities are finally looking into this matter after years of authorities not even batting an eye regarding the situation.
According to federal law, business owners have the right to select to choose less expensive card networks concerning their own business’ debit card transactions.
This can usually be done during in-store card transactions wherein customers will be provided with the option of choosing another card network.
However, the case is totally different for online transactions. Allegedly, Visa limits both customers’ and businesses’ options by not outright offering the option of running a payment card as a debit card for online financial dealings.
As of press time, Visa and its company representatives have been mum on the ongoing Justice Department news.
The company has also faced investigations and tight regulatory oversight over the years for alleged antitrust behaviors.
This latest Justice Department investigation will be its newest addition to its growing list of instances where the company answered to the authorities’ regarding reports of alleged antitrust violations in its operations.
Visa, officially known as Visa Inc., is a multinational financial services company and is one of the world’s most valuable companies with a revenue of $22.97 billion (2019 figures).
The company is known for its financial products and services – with its own Visa-branded cards being used by a large international network of partners through an electronic fund transfer processing system.
Founded more than six decades ago, Visa calls Foster City, California its company headquarters.
Editor’s Note on Visa Antitrust Lawsuit Under Investigation By US Justice Department:
This coverage aims to report on the latest investigation being faced by Visa for its alleged antitrust behaviors.
It is alleged that the company is deliberately taking steps to impose a high service fee on its customers – cashing in more whenever they choose to avail of their services.
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