Visa Receives FTC Letter Over Possible Violations of Durbin
Visa Inc. (V), the world’s largest payments network, said it will provide documents to the U.S. Federal Trade Commission after the agency asked for information on a debit-card service that may have violated the Durbin amendment.
U.S. antitrust regulators asked Visa in a Sept. 21 letter to voluntarily hand over documents related to its PIN Debit Gateway Service, the Foster City, California-based company said today in a filing. Visa said it’s cooperating with the U.S. and responding to its requests for information, and that the revenue in question isn’t material.
The gateway is optional and provided by Visa “to merchant acquirers that want to route transactions to other networks, but do not have connections to those networks,” Darrin Peller, a New York-based analyst at Barclays Plc, wrote in a note today. “We suspect that the FTC’s focus is driven by the recent regulations” and the increased use of the service “given that there are now greater PIN debit routing options,” he wrote.
The request is another in a line of lawsuits and document requests faced by Visa and newly named Chief Executive Officer Charles Scharf as the firm seeks to defend its leading market share in worldwide payments. In May, the company said it was the subject of a U.S. antitrust probe into its pricing for debit- card transactions. Visa continues to provide information to the U.S. in that investigation, according to today’s filing.
The Durbin amendment, named after U.S. Senator Richard Durbin, an Illinois Democrat, is a provision of the Dodd-Frank Act that limits the amount of swipe fees, or interchange, Visa and MasterCard Inc. (MA) can charge on debit-card transactions. The companies collect the money and remit it to their member banks.
Earlier this year Visa, MasterCard and the banks reached a proposed $6.6 billion settlement with merchants over credit-card transaction fees after seven years of litigation.
Visa rose 1.9 percent to close at $142.71 in New York. The shares have climbed 41 percent this year, the fifth most in the 70-company Standard & Poor’s 500 Information Technology Index, which has gained 7.6 percent.
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