Justice Department investigates Visa’s fintech relationships

The U.S. Justice Department is probing Visa’s relationships with fintech firms as part of a bigger antitrust investigation of the company, a new report suggests.

Why should we care?
At issue is whether Visa unlawfully gained a dominant market share. Investigators are examining whether financial incentives Visa gave fintech companies like Stripe, PayPal, and Square, kept them from using other card and money-movement networks. The actions are part of a broader antitrust investigation initiated in March. The Justice Department is looking at whether incentives constituted anti-competitive behavior, and the possibility that the fintechs in question promoted Visa-branded cards – at the expense of others – as a result of inducements. Visa stock dropped almost 7% after news broke of the antitrust investigation. At this time, there are no signs that the Department of Justice has come to a conclusion on the results of the probe. This isn’t the first Department of Justice probe of the credit card industry: In 2010, an investigation resulted in a settlement between Visa and Mastercard when the card companies agreed to let merchants offer consumers incentives to use low-cost credit cards.