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The United States Department of Justice (DOJ) has initiated an antitrust lawsuit against Visa, accusing the payments giant of maintaining an unlawful monopoly in the U.S. debit payments sector. Filed in a federal court in New York on September 24, the complaint asserts that Visa employs exclusivity agreements and the threat of penalties to block competition and solidify its dominant market position.
Alleged Monopoly in Debit Transactions
According to the lawsuit, Visa holds approximately 60% of the market share in U.S. debit transactions, generating $7 billion in transaction fees annually. U.S. Attorney General Merrick Garland expressed concern over Visa’s monopolistic behavior, stating that this conduct has led to inflated prices across various sectors.
“We allege that Visa has unlawfully accumulated the power to impose fees far beyond what would be possible in a competitive market. These costs are ultimately passed down to consumers through higher prices or reduced quality of goods and services,” Garland said. “Visa’s actions have a ripple effect, influencing the price of nearly everything.”
Stifling Competition
The DOJ also claims that Visa leverages its size and influence to coerce potential competitors into partnerships, effectively stifling any meaningful challenge to its dominance. These practices, the lawsuit alleges, perpetuate higher costs for consumers, even when alternative payment options are available.
Emerging Competition from Stablecoins
In early 2024, analysts began questioning Visa’s market-leading status as the rise of stablecoins—cryptocurrencies backed by fiat currencies—started gaining traction. Sacra co-founder Jan-Erik Asplund noted that stablecoins could eventually outpace Visa due to their convenience, particularly in international payments.
Visa, however, has pushed back against these claims, arguing that the impact of stablecoins is overstated and that the data surrounding their adoption is inconclusive.
While Visa remains a dominant force in U.S. debit payments, the global landscape is shifting. In several markets outside the U.S., stablecoins are becoming more prevalent, overtaking traditional fiat currencies as the preferred payment method.
This lawsuit marks a significant moment for Visa, as regulatory pressures and technological innovations continue to challenge its longstanding supremacy in the payments industry.
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