Credit: Getty Images by RUNSTUDIO
The National Retail Federation (NRF) welcomed a lawsuit announced Tuesday by the Department of Justice accusing Visa of violating federal antitrust law in its debit card practices but said the card network’s anticompetitive practices go further. The DOJ has filed a lawsuit against Visa alleging that some of its practices involving debit cards are anticompetitive and have violated the Sherman Antitrust Act. The government agency said Visa made exclusive agreements that hindered expansion of competing networks and also blocked efforts by technology companies to enter the market. The NRF argues the competing networks have lower fees and better security, and have saved merchants and their customers over $8 billion a year.
Total Retail’s Take: Retailers’ dissatisfaction with Visa and Mastercard’s credit card swipe fees has long been a talking within the industry, with the NRF and other trade groups lobbying on their behalf. Now that angst has extended to debit cards as well. The good news is that the DOJ is taking up the cause for retailers and other merchants, which may result in relief when it comes to payment processing fees.
“Visa has blocked competition over both credit cards and debit cards for years to maintain its domination of the payments market and protect the billions of dollars in profits it makes off Main Street merchants and their customers,” NRF Chief Administrative Officer and General Counsel Stephanie Martz said in a press release. “The DOJ is taking action on Visa’s debit card practices but that’s just the tip of the iceberg. This case is a major step forward in fixing our nation’s broken payments market, but it should not be the last. The courts, Congress and federal agencies each have roles to play in bringing competition to credit and debit cards and putting Main Street ahead of Wall Street.”
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