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.


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

Retail FX

Italian watchdog red flags Olympus Brokers, UnicoFX and Allfina Group

Italy’s Commissione Nazionale per le Società e la Borsa (CONSOB) has shut down new websites in an ongoing clampdown against firms it accuses of illegally promoting investment products in the country.

Retail FX

XTB revenues hits zł1.45 billion in 2022, Q4 earnings disappoint

Poland-based Forex and CFDs broker, XTB has reported its final results for Q4 of 2022 and the full fiscal year ending on December 31, 2022, showing one of its most successful corporate years.

Executive Moves

Lirunex Limited recruits Waleed Salah as head of MENA sales

Maldives-based brokerage firm Lirunex Limited has secured the services of Waleed Salah, who joined the company in the role of its head of sales for the MENA region.

Executive Moves

Trading 212 parts ways with co-founder Borislav Nedialkov

Trading 212 has a void to fill at its FCA-regulated business in London, following the departure of two key players, Raj Somal and Borislav Nedialkov.

Digital Assets

Binance acquires troubled crypto exchange GOPAX

Binance, the world’s largest digital asset trading platform, has reportedly acquired a majority stake in the troubled South Korea-based cryptocurrency exchange GOPAX.

Digital Assets

Kraken exits Middle East, closes UAE office

Digital currency exchange Kraken will close down its operations in Abu Dhabi, UAE and lay off the majority of its team focused on the Middle East and North Africa.

Industry News

CFTC comments on ION Cleared Derivatives issues after Russian-linked hack

“The ongoing issue is impacting some clearing members’ ability to provide the CFTC with timely and accurate data. As this incident unfolded, it became clear that the submission of data that is required by registrants will be delayed until the trading issues are resolved.”

Industry News

FCA took down 14 times more misleading ads in 2022 thanks to technology

The FCA has made significant improvements to the digital tools it uses to find problem firms and misleading adverts. These improvements have enabled it to work through a much larger number of cases compared with 2021.

Executive Moves

HKEX appoints ex-Goldman Sachs Matthew Cheong to lead platform’s focus on derivatives

“He has worked for a number of the world’s leading investment banks and his experience will be invaluable to HKEX as we continue to enhance our derivatives product offerings and build on our innovative and robust platform business, connecting capital with opportunities.”