The United States Department of Justice has filed a lawsuit against Visa, accusing it of monopolizing the debit card market. According to the lawsuit, Visa controls more than 60% of debit transactions in the United States, allowing them to hinder competition and extract hefty fees—more than $7 billion every year. The Justice Department contends that Visa used exclusionary techniques to prevent competitors from entering the market, so retaining its monopoly position.
Attorney General Merrick Garland noted that Visa’s activities boost customer expenses by raising prices for a wide range of goods and services. The lawsuit seeks to restore competition in the debit card business, which is important to US commerce.
This is not the first time Visa has faced legal hurdles; a similar antitrust dispute in 2020 prevented Visa’s acquisition of fintech company Plaid, which was considered as a tactic to safeguard its debit market.
Visa dominates more than 60% of the debit card market in the United States, handling billions of dollars in transactions annually. The DOJ reports that Visa charges over $7 billion in processing fees each year, which retailers and banks pass on to customers through increased pricing or fewer services. This market dominance not only provides Visa enormous influence, but it also stifles competition, which is necessary for a vibrant, innovative payment ecosystem.
According to the DOJ’s lawsuit, Visa has used a network of exclusionary agreements to keep competitors out of the debit card market. These agreements bind banks and merchants to Visa’s network, making it harder for alternative debit card processors to compete. The lawsuit also claims that Visa exploits its financial resources to buy off potential competitors, ensuring they become partners or fail to undermine its supremacy.
