Lawsuit Accuses Visa of Electronic Payment Monopoly

Visa is reportedly facing an antitrust lawsuit alleging that it has blocked fair competition in the credit and debit card processing market.

MiCamp Solutions, a provider of secure payment processing solutions, has filed a proposed class action targeting Visa in the U.S. District Court for the Northern District of California, the Clayton County Register reported Monday (Dec. 11).

Neither MiCamp Solutions nor Visa immediately responded to PYMNTS’ request for comment.

MiCamp Solutions alleged that Visa had set interchange fees for general-purpose debit and credit card network services at levels that were artificially inflated and above competitive rates, according to the report.

This has given Visa a substantial amount of control over the payment processing marketplace and market power that harms other players in the market, MiCamp Solutions argued, per the report.

The proposed class action is the latest of several antitrust cases aimed at the company, driven by Visa’s dominant position in the payment processing industry, the report said.

It was reported in July that Visa was under continued scrutiny by the U.S. Department of Justice, with a civil investigative demand bringing to light a deepening inquiry into the payment processor’s practices.

Visa said at the time in a regulatory filing made with the Securities and Exchange Commission (SEC) that the DOJ sought more information about debit cards and other payment methods.

The department launched an inquiry in 2021 over Visa’s practices and dominance in certain payment areas. It has also looked into the company’s “steering” arrangement with PayPal to stop consumers from paying with their checking accounts instead of debit and credit cards when using PayPal’s digital wallet.

Also in July, Visa and its rival Mastercard were the targets of an antitrust lawsuit filed by Block, accusing them of conspiring to inflate fees and increase retail prices paid.

That suit stemmed from the Square payment platform’s alleging of inflated interchange fees charged by Visa and Mastercard with their member banks when a customer uses a credit or debit card, according to reports at the time.

Block further claimed that these fees are “highly complex, difficult to calculate, and unavoidable.”