The Justice Department alleges that Visa has a monopoly over its debit network, which affects the cost of "nearly everything."

• On Tuesday, the U.S. Department of Justice filed a lawsuit against Visa, the largest payments network globally, accusing it of maintaining an illegal monopoly in the debit payment sector.
• The DOJ accused Visa of imposing "exclusionary" agreements on partners and stifling competition from new firms.
• In the past two decades, both Visa and its smaller competitor MasterCard have experienced significant growth, resulting in a combined market value of approximately $1 trillion.

On Tuesday, the U.S. Justice Department filed a lawsuit against Visa, the largest payments network globally, accusing it of maintaining an illegal monopoly over debit payments through "exclusionary" agreements with partners and stifling competition from emerging companies.

The DOJ alleges that Visa's actions have led to billions of dollars in extra fees for American consumers and merchants, and the antitrust lawsuit filed in New York accuses the company of "monopolization" and other illegal practices.

According to Attorney General Merrick Garland, in a DOJ release, it is alleged that Visa has illegally accumulated excessive fees beyond what it could reasonably charge in a competitive market.

"Visa's unlawful conduct not only increases the price of one item but also affects the price of almost everything, as merchants and banks pass on the costs to consumers, either by raising prices or reducing quality or service, Garland stated."

In the past two decades, Visa and its smaller competitor have experienced significant growth, reaching a combined market cap of approximately $1 trillion. As consumers increasingly use credit and debit cards for shopping and online transactions, these companies have become essential intermediaries, facilitating payments between merchants' banks and cardholders.

In the U.S., more than 60% of debit transactions are processed through Visa, generating over $7 billion in annual fees, as stated in the DOJ complaint.

Regulators and retailers are increasingly paying attention to the dominance of payment networks.

In 2020, the DOJ filed an antitrust suit to prevent Visa from acquiring fintech company Plaid. Despite initially stating they would fight the action, the companies later abandoned the $5.3 billion deal.

In March, Visa and Mastercard reached an agreement to reduce their fees and allow merchants to charge customers for using credit cards, a deal worth $30 billion in savings over five years. However, a federal judge later rejected the agreement, stating that the networks could afford to pay for a "substantially greater" settlement.

"The DOJ stated that Visa uses its power, size, and importance in the debit industry to enforce exclusive deals on merchants and banks. These agreements punish Visa's customers who choose to use a different debit network or alternative payment system."

This story is developing. Please check back for updates.