DOJ Sues Visa For Locking Out Rival Payment Platforms (theverge.com) 35
The Department of Justice has filed an antitrust lawsuit against Visa, alleging that the financial services firm has an illegal monopoly over debit network markets and has attempted to unlawfully crush competitors, including fintech companies like PayPal and Square. From a report: The lawsuit follows a multiyear investigation of Visa which the company disclosed in 2021. "We allege that Visa has unlawfully amassed the power to extract fees that far exceed what it could charge in a competitive market," Attorney General Merrick Garland said in a statement. "Merchants and banks pass along those costs to consumers, either by raising prices or reducing quality or service. As a result, Visa's unlawful conduct affects not just the price of one thing -- but the price of nearly everything."
Visa makes more than $7 billion a year in payment processing fees alone, and more than 60 percent of debit transactions in the United States run on Visa's network, the complaint claims. The government alleges that Visa's market dominance is partly due to the "web of exclusionary agreements" it imposes on businesses and banks. Visa has also attempted to "smother" competitors -- including smaller debit networks and newer fintech companies -- the complaint alleges. Visa executives allegedly feel particularly threatened by Apple, which the company has described as an "existential threat," the DOJ claims.
Visa makes more than $7 billion a year in payment processing fees alone, and more than 60 percent of debit transactions in the United States run on Visa's network, the complaint claims. The government alleges that Visa's market dominance is partly due to the "web of exclusionary agreements" it imposes on businesses and banks. Visa has also attempted to "smother" competitors -- including smaller debit networks and newer fintech companies -- the complaint alleges. Visa executives allegedly feel particularly threatened by Apple, which the company has described as an "existential threat," the DOJ claims.
Monopoly (Score:2)
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Electioneering not to be dismissed (Score:2)
There may be some correlation from political candidates of all parties to jump on this as 'fighting for the common citizen to not be exploited by big companies'.
If they have a near monopoly on payments as a percentage of electronic payments, then there may be a cause of action for a court to look into.
Not to be excluded here is how much intense lobbying did competitors do to force this before the election because if there is a president of a different political party, this type of DOJ action would be most l
In the USA (Score:5, Insightful)
There's always some corporation who inserts themselves in the middle of things.
Most industrialized countries except the USA have quicker and more efficient electronic payment methods. In the US, these are typically handled by ACH (slow) and Visa/Mastercard.
The US government has been attempting to deploy FedNow for a couple of years now, but the big banks are having none of it. Only smaller banks and credit unions have signed up.
There's too much to lose for the big banks if they started using FedNow, but it is exactly what is needed by consumers and merchants. The only way we can force this is to stop being a customer of large banks.
It used to be that the reason we did business with bag banks was the vast ATM networks we had. Since people are using more electronic transactions and less checks and cash, the reason for having an account at a big bank has diminished.
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The Clearing House Payments Company operates the RTP (Real–Time Payments) service which facilitates instant payments for customers of its member banks.
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Even for ATMs, most people don't realize that the co-op network exists. Most credit unions are in the co-op network allowing nation-wide shared access to 30,000 ATMs and 5,600 branches. https://www.coop.org/Shared-Br... [coop.org]
Can't easily find a co-op ATM? Well, they're inside every single 7-11 for starters!
Additionally, my credit union offers ATM fee refunds up to a certain amount each month, so even if I get dinged with fees from someone else's ATM, those fees will be erased.
There really isn't much of a reason t
I like credit cards (Score:3)
In the United States credit cards are king because we have laws that shift responsibility for most fraud onto the banks instead of the consumer.
If someone cleans out your bank account than unless you can prove it's a bank error you're just screwed, and the same is true for credit cards in Europe.
I also get cash back, which is nice, but I'm also smart enough to know it can encourage me to
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If someone cleans out your bank account than unless you can prove it's a bank error you're just screwed, and the same is true for credit cards in Europe.
Well, that's not what EU banking directives & consequent laws say. Consumer protections, & more importantly enforcement, in the USA leave people in the lurch. Individuals have to initiate & pay for lengthy legal proceedings to perhaps get their money back. In the EU, it all works very differently, e.g. The banks, EU-wide, were forced by law & liability for losses, to tighten up the security of their online transaction & verification systems because they were carelessly cultivating large,
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There's always some corporation who inserts themselves in the middle of things.
It's like my old dachshund. A breed that likes to burrow. Every frigging time I got hot and heavy with the girlfriend the stupid dog would burrow in and get between us. No dog, you do not get 3%! The value of my smooching has done down tremendously when that wet dog nose suddenly appears. How the hell did he get in here anyway, that door was closed!
Ugh, no middle men allowed!
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Yep, seems to be a national problem. If I buy anything online here, I just do a bank-transfer which is free (!) with a pretty simple and pretty secure process that also is fast. US consumer banking is stuck in the last century.
All Credit Card fraud is Visa's fault (Score:4, Insightful)
It is also Congress' fault as they allowed Visa to avoid responsibility for all "Card Not Present" transactions while simultaneously also not requiring Visa to support "Card Present" over the internet -- which they could have easily have done.
The pain that this monopoly has inflicted on everyone is almost beyond belief and it needs to be brought to an end.
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40 years of conservative talk radio as half our political system has not been good
Bill Clinton, Barack Obama, and Joe Biden each had trifectas during the first two years of their respective terms of office, where their party held both houses of Congress.
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The Senate Filibuster would like a word.
Obama briefly had 60 in the Senate, and when he had it, he passed the Afforable Care Act, the Reinvestiment and Recovery Act of 2009, as well as Dodd-Frank.
The previous filibuster-proof majority was in the 1970s. And since the 1950s we've seen abuse of the filibuster rise with a correlated fall in Senate bills actually becoming law - in the 85th Congress (1957 - 1959) the Senate passed over 25% of all bills debated on the floor; by 2010 it was down to less than 3% du
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40 years of conservative talk radio as half our political system has not been good
Bill Clinton, Barack Obama, and Joe Biden each had trifectas during the first two years of their respective terms of office, where their party held both houses of Congress.
Yes, and aside from a few moments, they did fuck-all with those majorities. This is why, for well over a generation, I've referred to the Democrats as one of two things: Complete pansies, or giant hypocrites. They say a lot of really nice things, some halfway decent ideas, but the only ones they ever implement do exactly the opposite of what they promised to do. Granted, at least they pay lip service to the people. The Republican party has been the party of, "Fuck you and fuck your relatives and fuck your d
Visa had all that tech 15-20 years ago (Score:2)
Visa needs to be taken down a peg, every monopoly does. We've had *massive* industry consolidation.
But the reason we're going after Visa isn't because they're really worth going after from a consumer standpoint, we're going after them because we'll get guys like Walmart & Best Buy behind us.
We'd get way, *way* more bang for our buck if the DOJ went after the big meat producers (there's 4 left
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I host a website that publishes the fake and sometimes real identities of scammers. I encourage businesses to get the real, but stolen credit card numbers from scammers and cancel them. Visa has been very good about this. Mastercard doesn't care.
The reactions will be interesting. (Score:3)
Seeing our government actually start to eyeball companies that have developed near monopoly power in the four decades since Reagan's great culling of regulatory powers, I wonder how long it will be before we start seeing backlash. It's gonna be really interesting watching our government try to redevelop its spine after all the years of free-for-all for the business world. I wonder if it'll last?
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Your think this is a free-for-all business environment?
The federal government has added multiple 'consumer protection' agencies, with interesting effects.
When they catch a bank, nameless here to avoid further controversy, they fine it truly insignificant money though it allowed and encouraged it's salespeople to create accounts for customers without their knowledge (and obviously consent), forge email addresses to keep them from seeing bills and statements, enrolled them in all manner of services and 'benef
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I read a great idea a while ago. Instead of fines start seizing stock. Permanently. If the percentage ever goes above 50 the company gets shut down and all of its assets and IP are distributed to its competitors starting with the smallest.
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Your think this is a free-for-all business environment?
The federal government has added multiple 'consumer protection' agencies, with interesting effects.
When they catch a bank, nameless here to avoid further controversy, they fine it truly insignificant money though it allowed and encouraged it's salespeople to create accounts for customers without their knowledge (and obviously consent), forge email addresses to keep them from seeing bills and statements, enrolled them in all manner of services and 'benefits' without their knowledge, took finished and bonuses, and got off with relative slaps on the wrist. $3Billion? More like $30Billion would cause real discomfort, hamper success, and deter future crimes. It takes $3-10Billion to bring a new internal processing platform to production for the big banks and credit card companies. Fine the criminals enough so they miss 1-2 iterations of systems development, and they feel real pain. Like watching the AI revolution pass them by. Or even worse, they have to rely on others to keep up. Paying fees and sharing days.
Actually, maybe a better punishment would be levying a 0.5% reduction in processing fees, a 0.5% increase in savings account interest, 1% reduction in the spread between prime rate and card interest... Additional 0.5% reductions each time caught circumventing these penalties.
Modest fines and harsh words are business-as-usual. Time for real change.
OK, so it may not be a free-for-all, but it certainly appears that way, which most of what you wrote confirms.
BTW, I met several of the executives of that bank you're talking about. You could feel the slime ooze off of them. One of the way higher ups approached us at a big company celebrator rah rah session and said something so absolutely detached from reality that even his trophy wife looked at him like she couldn't believe he said it. Then she looked at us with an apologetic shrug. Those people are on a
Re: The reactions will be interesting. (Score:2)
They still fancy themselves Masters of the Universe.
Paypal (Score:2)
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Sure. On eBay. Also Menufy accepts Paypal so I use Paypal to pay for any carry out orders I do from restaurants that utilize them.
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Paypal has become an option on some credit card terminals, especially in businesses that aren't federal-banking-law friendly (read: cannabis dispensaries).
Apparently we're not done with "security through obscurity" when it comes to half-assed regulations that nobody actually wants, but government is paralyzed to deal with.
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Does anyone actually still use this?
Not since I started use wise.com instead. Everything about Wise is better than PayPal. The fees, the web/app interface, transaction exports, the company itself.
Once I had a technical problem with a transaction. I can't remember what the problem was but I do recall how easy and fast it was to communicate with customer service, who helped me, (I can't remember how anymore) and about 10-12 hours later as I recall, the app updated on my Android with the fix.
Just make the fees a line item on the receipt. (Score:2)
I don't want a settlement, don't even care for a fine, I just wan't transparent swipe fees that are actually paid by those that incur the charge.
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I'm finding more and more restaurants are doing just that. I have visited several in the past few weeks that add a "convenience fee" for using a credit card or offer discounts for paying cash. My optometrist adds 3% to the cost if you use a credit card now. They tacked on 4% to an auto repair I had done back in August.
I seem to recall that credit card companies used to stipulate that vendors were not allowed to accept cards while using those tricks in order to promote zero-cost-to-consumers card usage b
Which part is theirs? (Score:1)
Every debit card I've had in the last decade or two has been MasterCard-branded. But I have no idea who gets a cut of what -- does Visa own all the back-end?
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Not a nickel's worth difference between Mastercard and Visa. Amex cuts out the middle of the bankcard model, they are issuers AND acquirers of much of their business. The few banks that issue Amex look like Visa/MasterCard.
Hey I agree with Visa (Score:2)
Apple is an existential threat to both payment networks AND credit cards.
Ecosystem bundling and having a single provider for services is simply too convenient ... consumer electronic ecosystem will create the largest monopoly in history if allowed and skim more from transactions than Visa ever did.
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