Visa CEO Unfazed by DOJ Probe Into Debit
Investors weren’t pleased with Visa’s disclosure of a U.S. Department of Justice inquiry into its debit practices, launched on March 13, in the company’s earnings call this week. Shares of “V” stock were down as much as 5.4 percent late Thursday.
But CEO Joe Saunders was calm and collected in his assessment of the inquiry, going so far as to call the DOJ’s actions anything but surprising.
“In a business as complex as ours, the department’s request is not unexpected,” Saunders said, noting that the DOJ has asked Visa for more information on its business practices four times since 2007. Of those previous instances, Saunders added, “All have been resolved with our full cooperation. We are continuing to provide materials and cooperate with the department.”
Specifically, the U.S. Department of Justice Antitrust Division is asking for additional details about Visa’s PIN-authenticated debit network, as well as “elements of [its] new debit strategies, including the fixed acquirer fee,” Saunders said late Wednesday.
Federal inquiries aside, Saunders also noted that new debit regulations have actually helped Visa expand its debit business, including “an opportunity to add Interlink to existing cards that currently carry our competitor’s brand.”
As is seemingly the case with the contact from the DOJ, Visa seems to have been fully prepared for Durbin: “The impact of the regulation in the U.S. has been significant but almost exactly as we planned for,” Saunders said.
Read the full transcript of Visa’s earnings call at Seeking Alpha.