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NEW YORK – The U.S. Department of Justice has filed an antitrust lawsuit against Visa, accusing the financial giant of leveraging its dominance to suppress competition in the debit card market, which it claims costs consumers and businesses billions.
The lawsuit, filed on Tuesday, alleges that Visa penalizes merchants and banks for not using its own payment processing technology even though other options exist. The company profits from every transaction processed through its network.
The DOJ’s complaint states that Visa controls 60% of U.S. debit transactions, and generates more than $7 billion annually in processing fees.
"Visa has unlawfully gained the power to charge fees far above what a competitive market would allow," Attorney General Merrick Garland said. "These costs are passed on to consumers through higher prices or reduced quality and service, impacting the price of almost everything."
The Merchants Payments Coalition (MPC) — which represents retailers, supermarkets, convenience stores, gasoline stations and online merchants opposed to high credit and debit card fees — welcomed DOJ's lawsuit.
“This is further proof that Visa has repeatedly blocked competition,” said Doug Kantor, MPC executive committee member and general counsel for the National Association of Convenience Stores. “While this case focuses on debit cards, it highlights the need for competition in credit card swipe fees, which currently face no competition at all.”
The DOJ’s lawsuit claims Visa hindered competing networks like Star, NYCE, and Shazam, which offer lower fees and better security, from gaining market share. It also accuses Visa of charging higher fees to merchants unless they use its proprietary technology.
Though Congress passed the Durbin Amendment in 2010 to ensure competition in debit card transactions, retailers contend that Visa and Mastercard largely control credit card fees. The Card Competition Act (CCCA) aims to address this by requiring large banks to allow transactions over competing networks, potentially saving consumers and businesses $16 billion annually.
In 2023, swipe fees for credit and debit cards reached $172 billion, becoming one of merchants' largest costs and driving up consumer prices by $1,700 per family, according to the MPC.
