Visa under scrutiny for payouts to Paypal, Square and others

Karthik Subramanian

Visa, which along with Master card is one of the largest credit card companies, is under scrutiny by the Department of Justice (DOJ) for payments that were made to Paypal, Square, and other large companies over the years.

visa

The DOJ would be looking to see whether these payments were made to ensure that these companies continued to process all their transactions through the Visa network and whether this adversely affected other smaller competition. Both Visa and Mastercard have, over the years, been very mindful of competition which has helped them to stay as the top credit card providers for more than a decade. The companies that process payments through their networks would have to pay fees for usage of their network. This fee would vary depending on the number of transactions that a company processes via the network.

Over the years, it is understood that Visa agreed for very low fees to be charged for the transactions made on its network by very large companies like Paypal, Square, and Stripe as they were known for processing huge number of transactions via the network. It is also understood that Visa made payments to these companies though the reasons for such payments are not very clear. It is also understood that the DOJ would be looking to see whether Visa prevented or discouraged the merchants from routing their debit card transactions through other rails and this is again something that is not very clear at this point and if it is indeed true, then it could come under scrutiny for anti-competition laws.

Any of the above practices are likely to have encouraged the large merchants to stick to the Visa network for clearing and these merchants would also have encouraged their users to make payments using Visa cards. Whether these practices are correct as per applicable law and standards is something that the DOJ has to decide when it does the scrutiny. Visa has been growing very strongly over the years with different practices and it has also been very quick to adapt to the changes in the card and payments industries over the years, for which it has to be given credit. It has also been one of the first major companies to support the crypto ecosystem which shows that it always has an eye for emerging trends which has helped it to stay on top of the market for a long time.

Read this next

Digital Assets

AAX ranked world’s second largest spot exchange, only behind Binance

Crypto trading volumes experienced their first surge in activity since March as the majority of digital assets began their recovery from the recent grim price action, according to a new report by Cryptocompare.

Digital Assets

Bitpay teams up with Cardlytics to provide 15% cashback rewards

Crypto payment service provider Bitpay announced a partnership with Cardlytics Inc (NASDAQ:CDLX), which it says will offer more rewards for BitPay cardholders on its platform.

Digital Assets

BlackRock digs further into crypto with spot bitcoin private trust

BlackRock, the world’s largest asset manager with almost $8 trillion in AUM, has launched a spot bitcoin private trust for institutional clients in the United States.

Digital Assets

SEC fines Bloom Protocol, orders refund to BLT token purchasers

Blockchain startup Bloom, which raised $30 million in funds via an initial coin offering (ICO), has agreed to return the money to token purchasers and pay a $300,000 fine, the SEC announced.

Institutional FX

FX volume takes step back at Singapore Exchange in July

The Singapore Exchange (SGX), the country’s paramount exchange operator, has released its monthly volumes across its FX, derivatives and commodities segments for July 2022.

Market News

The Week Ahead: 12 August from David Madden, Market Analyst at Equiti Group

There was a spike in volatility last week when the US CPI report ticked down to 8.5% from 9.1%, missing the forecast of 8.7%. The announcement led to chatter the Fed might not carry out a 0.75% interest rate hike in September.

Digital Assets

Pomelo Pay adds crypto payments capabilities from TripleA

According to a June survey conducted by Deloitte, nearly 75% of retailers plan to accept either cryptocurrency or stablecoin payments within the next two years.

Executive Moves

Talos appoints “boss, mentor, and friend” Neal Pawar as strategic advisor

“Foundational technologies are needed for institutions to fully embrace this potential, however, and in my opinion Talos’s platform is steadily becoming the de facto industry standard for digital asset trading.”

Technology

Avelacom enhances Middle East connectivity amid new market trends

Avelacom found that smaller markets in the region were not sufficiently covered by third-party vendors.

<