Largest Card Network Faces Allegations of Anti-Competitive Practices

September 25, 2024 The U.S. Department of Justice filed a sweeping antitrust lawsuit against Visa on September 24th, accusing the debit-card giant of stifling competition. The suit seeks to open the market to new competitors and challenges Visa’s alleged efforts to monopolize the debit-card sector.

According to the government, Visa paid potential competitors like Apple to limit innovation and penalized merchants who worked with rival card networks. The lawsuit claims Visa has maintained dominance in the debit-card market since 2012 by imposing higher fees on businesses that routed transactions through other networks.

This practice not only harmed businesses but also consumers. Merchants, facing increased fees, passed those costs along to consumers through higher prices for goods and services.

“None of this should come as a surprise,” said Mark Weller, Executive Director of Americans for Common Cents. “For years, companies like Visa have pushed consumers to abandon cash in favor of card payments through aggressive advertising and media campaigns. Small businesses and consumers bear the brunt, as card networks, banks, and payment providers all charge fees, making cash the cheapest payment option,” Weller added.

Weller emphasized the importance of preserving cash as a payment option, especially for vulnerable populations who may not have access to digital payment methods. “Without cash, all transactions are intermediated by financial institutions, which not only increases costs but also opens the door to privacy concerns. These institutions will have access to personal financial details and could restrict certain transactions or exclude individuals from participating in the economy.”

In a rapidly changing payment landscape, Weller advocates for policies that protect consumers’ right to use cash, underscoring that physical currency, including coins like the penny, should remain legal tender for all transactions.