SAN FRANCISCO – Visa shares slumped almost 5% in after-hours trading yesterday after the cards giant disclosed the U.S. Justice Department is investigating the company’s fee changes made in response to debit interchange regulations that are part of the Durbin Amendment.
“The department requested information from Visa about "elements of our new debit strategies," including a new fixed fee it is now charging merchant banks, Joseph Saunders, CEO of Visa said yesterday during an earnings conference call.
Visa adjusted the network’s fee structure to defend its leading market share after the U.S. rules on debit-card processing took effect in October.
The new probe comes just months after Visa and MasterCard settled antitrust charges with the DOJ over anti-steering regulations that prevented merchants from steering card users to cheaper methods of payment, and after a recent civil antitrust case filed by ATM operators over fees the two card networks charge.
The DOJ’s latest request came in the form of a "civil investigative demand," a process antitrust regulators use to obtain information from companies.
"On March 13, prior to the April 1 implementation date, the US Department of Justice Antitrust Division issued a civil investigative demand requesting additional information about PIN authenticated Visa Debit and elements of our new debit strategies, including the fixed acquirer fee,” said Saunders. “In March we met with the department twice and provided materials in response to the CID. We are confident our actions are appropriate and that our response to the DOJ supports that".
