The Justice Department alleged that Visa charged higher fees to merchants and consumers who used alternative payment networks.
It even squashed competition by partnering with them.
The US Justice Department has filed a civil antitrust lawsuit against Visa, alleging the payment giant’s “illegal” monopoly in debit network markets, which is costing consumers and businesses billions of dollars.
An “Illegal” Monopoly
The lawsuit, filed yesterday (Tuesday) in a New York court, alleges that Visa illegally maintained its monopoly by insulating itself from competition. The payment company also penalised merchants and consumers who do not use its processing technology for debit transactions.
“We allege that Visa has unlawfully amassed the power to extract fees that far exceed what it could charge in a competitive market,” said Attorney General Merrick Garland. “Merchants and banks pass along those costs to consumers, either by raising prices or reducing quality or service. As a result, Visa’s unlawful conduct affects not just the price of one thing – but the price of nearly everything.”
When it comes to payment processing, Visa dominates both the US and global markets. According to the Justice Department, the Visa network processed more than 60 percent of debit transactions in the US, charging more than $7 billion in fees each year.
Prosecutors found that Visa locks up the debit volume, thus insulating itself from smaller and lower-priced competitors. It even muffled competition by partnering with rivals, “offering generous monetary incentives and threatening punitive additional fees.”
The Justice Department further highlighted that Visa coopted the competition as it feared losing market share and revenue or the possibility of being displaced by a competitor.
The Dominance of Visa
The San Francisco-headquartered payments company generated $18.8 billion in operating income at a margin of 64 percent in 2022. North America is its most profitable market, where it managed an operating margin of 83 percent.
In 2023, the Justice Department blocked the $5.3 billion acquisition of financial technology firm Plaid by Visa, calling it a monopolistic takeover. The payments giant ultimately abandoned that acquisition.
Visa has yet to officially respond to the recent antitrust lawsuit.
Meanwhile, the markets have already reacted, as Visa shares dropped about 5.5 percent in value following the Justice Department’s announcement.
“Visa abuses its power over its customers and buys off would-be rivals at the expense of American consumers, merchants, banks, and the competitive process itself,” said Principal Deputy Assistant Attorney General Doha Mekki of the Justice Department’s Antitrust Division. “Today’s lawsuit holds Visa accountable for its conduct in a market that forms the backbone of American commerce.”
The US Justice Department has filed a civil antitrust lawsuit against Visa, alleging the payment giant’s “illegal” monopoly in debit network markets, which is costing consumers and businesses billions of dollars.
An “Illegal” Monopoly
The lawsuit, filed yesterday (Tuesday) in a New York court, alleges that Visa illegally maintained its monopoly by insulating itself from competition. The payment company also penalised merchants and consumers who do not use its processing technology for debit transactions.
“We allege that Visa has unlawfully amassed the power to extract fees that far exceed what it could charge in a competitive market,” said Attorney General Merrick Garland. “Merchants and banks pass along those costs to consumers, either by raising prices or reducing quality or service. As a result, Visa’s unlawful conduct affects not just the price of one thing – but the price of nearly everything.”
When it comes to payment processing, Visa dominates both the US and global markets. According to the Justice Department, the Visa network processed more than 60 percent of debit transactions in the US, charging more than $7 billion in fees each year.
Prosecutors found that Visa locks up the debit volume, thus insulating itself from smaller and lower-priced competitors. It even muffled competition by partnering with rivals, “offering generous monetary incentives and threatening punitive additional fees.”
The Justice Department further highlighted that Visa coopted the competition as it feared losing market share and revenue or the possibility of being displaced by a competitor.
The Dominance of Visa
The San Francisco-headquartered payments company generated $18.8 billion in operating income at a margin of 64 percent in 2022. North America is its most profitable market, where it managed an operating margin of 83 percent.
In 2023, the Justice Department blocked the $5.3 billion acquisition of financial technology firm Plaid by Visa, calling it a monopolistic takeover. The payments giant ultimately abandoned that acquisition.
Visa has yet to officially respond to the recent antitrust lawsuit.
Meanwhile, the markets have already reacted, as Visa shares dropped about 5.5 percent in value following the Justice Department’s announcement.
“Visa abuses its power over its customers and buys off would-be rivals at the expense of American consumers, merchants, banks, and the competitive process itself,” said Principal Deputy Assistant Attorney General Doha Mekki of the Justice Department’s Antitrust Division. “Today’s lawsuit holds Visa accountable for its conduct in a market that forms the backbone of American commerce.”
Arnab is an electronics engineer-turned-financial editor. He entered the industry covering the cryptocurrency market for Finance Magnates and later expanded his reach to forex as well. He is passionate about the changing regulatory landscape on financial markets and keenly follows the disruptions in the industry with new-age technologies.
Relive the best moments from the Finance Magnates Pacific Summit 2024 with our highlights video! ✨
From action-packed moments, insightful speaker sessions, the exclusive Opening Blitz, and immersive workshops, this video captures the energy and excitement of FMPS:24. Whether you attended or missed out, here’s your chance to experience the top moments that made FMPS:24 unforgettable.
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Relive the best moments from the Finance Magnates Pacific Summit 2024 with our highlights video! ✨
From action-packed moments, insightful speaker sessions, the exclusive Opening Blitz, and immersive workshops, this video captures the energy and excitement of FMPS:24. Whether you attended or missed out, here’s your chance to experience the top moments that made FMPS:24 unforgettable.
🎬 Watch, share, and join the conversation!
Don’t forget to use the hashtags #fmps #fmps24 #FMevents when sharing.
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Transformation in the APAC Trading Landscape and Beyond | FMPS:24
Transformation in the APAC Trading Landscape and Beyond | FMPS:24
As the financial services industry experiences rapid and transformative changes, leading fintech experts and policymakers come together to discuss the present and future of retail trading and the evolving regulatory landscape. Join this insightful session for a forward-looking perspective on the trends, innovations, and trader needs that are shaping the future of offerings on a global scale.
Speakers:
Eric Blewitt, CEO, Investment Trends
Rhys Bollen, Senior Executive Leader, Digital Assets, Australian Securities and Investments Commission (ASIC)
Michael Bogoevski, Head of Institutional Sales, CMC Connect
Karin Setchell, General Manager, Product & Investing Solutions, CommSec
#fmps #fmps24 #fmevents #RetailTrading #FintechInnovation #FinancialRegulation #DigitalAssets #GlobalFinance
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As the financial services industry experiences rapid and transformative changes, leading fintech experts and policymakers come together to discuss the present and future of retail trading and the evolving regulatory landscape. Join this insightful session for a forward-looking perspective on the trends, innovations, and trader needs that are shaping the future of offerings on a global scale.
Speakers:
Eric Blewitt, CEO, Investment Trends
Rhys Bollen, Senior Executive Leader, Digital Assets, Australian Securities and Investments Commission (ASIC)
Michael Bogoevski, Head of Institutional Sales, CMC Connect
Karin Setchell, General Manager, Product & Investing Solutions, CommSec
#fmps #fmps24 #fmevents #RetailTrading #FintechInnovation #FinancialRegulation #DigitalAssets #GlobalFinance
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Executive Interviews with Joe Li & Simon Naish | ATFX | FMPS:24
Executive Interviews with Joe Li & Simon Naish | ATFX | FMPS:24
In this Finance Magnates Executive Interview, Joe Li, Chairman at ATFX and Simon Naish, Country Head of Australia at ATFX Connect, discuss ATFX’s strategic growth in the APAC region, particularly focusing on their institutional arm, ATFX Connect. They highlight the importance of Australia as a strategic hub, the challenges of operating in a highly competitive and regulated market, and their plans for regional expansion across APAC. The conversation touches on the integration of advanced technology and multi-asset offerings, the significance of optimal execution tools, and the importance of tailoring solutions to meet the sophisticated demands of institutional clients. They also emphasize their strong regulatory compliance and their commitment to enhancing client experience through innovative tools and infrastructure.
#fmps #fmps24 #fmevents #ATFXConnect #APACFinance #InstitutionalTrading #FinancialTechnology #MarketExpansion
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In this Finance Magnates Executive Interview, Joe Li, Chairman at ATFX and Simon Naish, Country Head of Australia at ATFX Connect, discuss ATFX’s strategic growth in the APAC region, particularly focusing on their institutional arm, ATFX Connect. They highlight the importance of Australia as a strategic hub, the challenges of operating in a highly competitive and regulated market, and their plans for regional expansion across APAC. The conversation touches on the integration of advanced technology and multi-asset offerings, the significance of optimal execution tools, and the importance of tailoring solutions to meet the sophisticated demands of institutional clients. They also emphasize their strong regulatory compliance and their commitment to enhancing client experience through innovative tools and infrastructure.
#fmps #fmps24 #fmevents #ATFXConnect #APACFinance #InstitutionalTrading #FinancialTechnology #MarketExpansion
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Ready to Scale? Regtech in Australia, A Global View | FMPS:24
Ready to Scale? Regtech in Australia, A Global View | FMPS:24
In the effort to elevate Australian fintech on the global stage, RegTech presents a unique and compelling case. Despite the increasing demand for robust compliance solutions, Australia's RegTech sector—ranked third-largest globally—remains underfunded. Join this insightful fireside chat to explore the future of Australia’s RegTech hub and its global potential.
Key discussion points include uncovering the hidden opportunities in RegTech that VCs are overlooking, the necessary steps for increased governmental support, the readiness of the local ecosystem to collaborate across global regulatory regimes, and lessons learned from other leading fintech hubs around the world.
Speakers:
Dickie Currer, National Lead, Tech Australia Advocates
Deborah Young, CEO, The RegTech Association
#fmps #fmps24 #fmevents #RegTech #Fintech #AustralianFintech #GlobalCompliance #TechInnovation
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In the effort to elevate Australian fintech on the global stage, RegTech presents a unique and compelling case. Despite the increasing demand for robust compliance solutions, Australia's RegTech sector—ranked third-largest globally—remains underfunded. Join this insightful fireside chat to explore the future of Australia’s RegTech hub and its global potential.
Key discussion points include uncovering the hidden opportunities in RegTech that VCs are overlooking, the necessary steps for increased governmental support, the readiness of the local ecosystem to collaborate across global regulatory regimes, and lessons learned from other leading fintech hubs around the world.
Speakers:
Dickie Currer, National Lead, Tech Australia Advocates
Deborah Young, CEO, The RegTech Association
#fmps #fmps24 #fmevents #RegTech #Fintech #AustralianFintech #GlobalCompliance #TechInnovation
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Resilience in Trading: From Third Class To World Class | FMPS:24
Resilience in Trading: From Third Class To World Class | FMPS:24
Join Mario Singh, Founder and Chairman of Fullerton Markets, as he shares his life story, highlighting the traits that were required starting without financial knowledge to become a financial and trading expert recognised by world-renowned media like CNBC & Bloomberg.
#fmps #fmps24 #fmevents #trading #onlinetrading #tradingexpert #tradingjourney
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Join Mario Singh, Founder and Chairman of Fullerton Markets, as he shares his life story, highlighting the traits that were required starting without financial knowledge to become a financial and trading expert recognised by world-renowned media like CNBC & Bloomberg.
#fmps #fmps24 #fmevents #trading #onlinetrading #tradingexpert #tradingjourney
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