Visa is under fresh investigation by the U.S. Department of Justice over allegations it is charging retailers more for not using the payment firm's proprietary tokenization technology, Bloomberg News reported on Wednesday (16th August 2023), citing people familiar with the matter.
The DOJ's antitrust probe against Visa, which began in early 2021, is investigating if the company uses anticompetitive practices in the debit card market.
The tokenization technology, launched by Visa in 2014, swaps debit card numbers with tokens that can exclusively be used on a particular device or with a merchant, replacing users' sensitive account information with a unique digital identifier, the report said.
The DOJ declined to comment and Visa did not immediately respond to a Reuters request for comment.
Both Visa and rival Mastercard are facing increasing scrutiny for their dominance in the payments market.
The U.S. Federal Trade Commission started an investigation last October into whether Visa and Mastercard's security tokens restrict debit-card routing in online payments.
Visa disclosed last month that the DOJ's antitrust division had on May 2 demanded additional documents and information on its debit card practices in the United States and competition with other payment networks.
Mastercard also disclosed in April that it was being asked to provide additional information by the DOJ.
In 2019, Visa had settled a European Union antitrust probe relating to card fees.
(@ Reuters : Reporting by Pritam Biswas in Bengaluru; Editing by Pooja Desai)
