Visa is under investigation by the Department of Justice (DOJ) regarding its US debit card practices, per its latest regulatory filing and a report from The Wall Street Journal. The DOJ is targeting specific allegations that Visa limits merchants’ ability to route debit card transactions to smaller, lesser known, and often less expensive card networks. Visa says its debit card practices are in compliance with applicable laws but that it intends to cooperate with the DOJ.
The DOJ’s probe follows scrutiny into some of Visa’s other practices.
As debit payments continue to grow, there may be tighter rules coming down the pike for large networks if investigators find evidence to support the anticompetition allegations. If the investigation isn’t resolved in Visa’s favor, it could bring about tighter controls to limit card networks’ influence on transaction routing for debit card payments, as seen in international markets. That could mean an expansion of the 2010 Durbin Amendment, a federal law that gives merchants the right to select from at least two unaffiliated networks through which they can route transactions. It’s also worth noting that tighter restrictions may help real-time payments gain momentum among merchants—they circumvent cards altogether, providing a more cost-effective approach to transactions.