Visa has legally committed to ensuring that Australian merchants will not receive higher processing costs if they decide to use other debit card networks to process Visa branded dual-network card payments.
The commitment, applied through a court enforceable undertaking, appeases concerns raised by the Australian Competition and Consumer Commission (ACCC).
The competition regulator’s primary concern was that Visa’s strong market position in the credit card acceptance market could be leveraged to limit merchants from using other networks, such as Eftpos.
“The ACCC was concerned that Visa’s dealings with merchants could influence their choice of debit card network, and diminish competition between Visa and Eftpos in relation to debit card acceptance,” ACCC chair Rod Sims said.
The concerns arose following an investigation conducted by the ACCC, which had received complaints that accused Visa of engaging in anti-competitive conduct by offering certain merchants cheaper interchange rates for processing credit card payments if they agreed to process Visa branded dual-network debit card (DNDC) payments through the Visa network.
With the court enforceable undertaking, Visa will no longer offer cheaper interchange ranges to merchants on the condition that they process Visa DNDC payments through the Visa network.
It will also provide written reasons to a merchant for any withdrawal or change to that merchant’s credit strategic merchant rate if that merchant has indicated an intent to process Visa DNDC payments through a network other than Visa; as well as provide merchants with the eligibility criteria for debit and credit strategic merchant rates and allow merchants to choose how negotiations proceed.
At the start of this year, Visa announced it had abandoned plans to merge with Plaid, attributing the move to the United States Department of Justice (DoJ) being too burdensome. The DoJ filed a civil antitrust lawsuit in order to block the transaction as it believed Visa was a monopolist in online debit and Plaid had been developing a payments platform that could challenge Visa’s monopoly.