Visa Uses Monopoly Power to Impose Excessive Debit Transaction Processing Fees, Antitrust Lawsuit Alleges

New to ClassAction.org? Read our Newswire Disclaimer

A proposed class action lawsuit alleges Visa’s illegal monopolization of the debit network industry has allowed the company to impose excessively high network processing fees on merchants—which are ultimately passed onto consumers.

Get the latest open class action lawsuits sent to your inbox. Sign up for ClassAction.org’s free weekly newsletter.

The 50-page lawsuit claims that Visa’s market dominance is the result of “intentional and calculated steps” taken to suppress competition. For one, the filing contends, Visa uses its position as the largest debit network provider to leverage merchants and banks into routing agreements that punish these entities with substantially increased fees if they route too many transactions through alternative, more affordable networks.

According to the case, Visa even offers monetary incentives in exchange for entering exclusivity deals.

“Numerous merchants, transacting hundreds of billions of dollars, have signed agreements with Visa to route 100% of their eligible transactions through Visa’s debit network,” the complaint alleges. “In 2023, Visa paid a merchant over $20 million for exclusivity.”

The lawsuit also asserts that Visa has maintained its monopoly power by paying off potential competitors. Digital platforms such as Apple Pay, PayPal, Cash App and Square often have their own processing systems and can operate independently from traditional debit networks, like Visa, the complaint explains.

Per the suit, the defendant has provided lucrative incentives to digital wallet companies on the express agreement they will not develop a competing product that would rival its debit network.

The case contends that Visa’s anticompetitive behavior has allowed it to reap “sky-high” profit margins fueled by “supracompetitive” debit network processing fees. Importantly, merchants offset these fees by raising the prices of their goods and services, and the heaviest burden falls to consumers, the filing says.

The lawsuit seeks to cover anyone in the United States who purchased goods or services with a general purpose Visa-branded debit card during the applicable statute of limitations period and indirectly paid Visa network fees.

Did you know that some class action settlements require no proof to submit a claim? Check out the latest open class action settlements.