Debit cards have become Americans’ preferred non-cash payment method, accounting for over $4 trillion in transactions in 2021. These transactions are processed using debit networks: the technical infrastructure that facilitates the movement of money from a cardholder’s bank account to the merchant’s bank account. Visa, Inc. is the largest debit network provider in the United States. With a steady 83% profit margin on processing fees, Visa generates over $7 billion in annual fees from its U.S. debit network business alone.
On November 20, 2024, Paul LLP Trial Attorneys filed a complaint on behalf of a proposed class of consumers who used their Visa debit cards. The lawsuit alleges Visa used its dominant position to engage in anticompetitive practices designed to stifle competition, increase profits, and monopolize the debit network market at the expense of consumers. Plaintiffs bring this action under Section 16 of the Clayton Act, 15 U.S.C. §26, alleging violations of Sections 1 and 2 of the Sherman Act and various state antitrust and consumer protection laws. Plaintiffs seek injunctive relief, compensatory damages, and all damages available under applicable statutes. On December 16, 2024, the Southern District of New York consolidated various cases under In re Visa Debit Card Legislation and appointed Paul LLP Trial Attorneys, Hartley LLP, and the Joseph Saveri Larm Firm, LLP as Interim Co-Lead Counsel.
How Visa’s Debit Network Works
When you use a debit card to buy something, your bank sends money to the store’s bank. A debit network is an electronic system that sends that money where it needs to go. It connects your bank, the store’s bank, and everyone in between to process the payment.
Visa runs the largest debit network in the US, and most debit cards in the country use it. Even if a card payment technically has more than one network option available, Visa often controls which one actually gets used. That’s because Visa makes deals with banks and stores that push people into using its network. These deals limit the choices that banks and stores can make when it comes to sending and receiving payments. As a result, Visa has control over most transactions.
Here’s the key issue: Visa charges merchants high fees for using its network. The stores usually can’t avoid these fees, so they pass the extra costs on to you by raising their prices. That means you are essentially paying Visa every time you shop, whether or not your card says “Visa” on the front.
Visa’s rules make it difficult for new debit networks to grow. They also block cheaper and newer payment options. That keeps Visa in charge and keeps prices high for everyone.
How Are Visa’s Debit Card Practices Anticompetitive?
Visa uses its power in the debit card market to block competition. It controls over 60 percent of all debit transactions in the United States. That gives Visa major influence over how money moves from your bank to a store.
Visa makes exclusive deals with banks and stores. These deals force merchants to run transactions through Visa, even when cheaper networks exist. Visa also rewards banks and stores that follow these rules. If they don’t, Visa charges higher fees. That setup locks in Visa’s control and shuts out competitors.
To make matters worse, Visa actively blocks new technology. Some companies want to let people pay straight from their bank accounts without using Visa’s network. Visa pays those companies not to offer these options. When they try, Visa threatens to take away rewards or increase costs.
As a result of all this, most debit payments go through Visa, even when better choices are available. You effectively pay for Visa’s control every time you make a purchase. Visa’s rules raise costs for stores, and those costs show up in the prices you pay.
Anticompetitive Effects
Visa’s actions hurt you at checkout. Stores pay high fees to use Visa’s network, and they raise their prices to cover those fees. That means you pay more, no matter how you pay.
Visa’s deals with banks and stores limit options for merchants and consumers. Even though other debit networks could offer lower fees, stores often can’t use them without facing penalties. This stops those networks from growing and from lowering prices or offering better tools.
Visa’s contracts also block newer payment systems. Some apps and wallets could let you pay straight from your bank account, but Visa steps in to stop them. It offers money to stay out of its space or threatens fees if they don’t. That keeps old systems in place and stops better ones from taking hold.
All of this means Visa doesn’t have to compete. It sets fees as high as it wants and makes its own rules to protect its profits. And you keep paying the price in higher costs, fewer choices, and slower progress.
True competition would lower fees and give you more ways to pay. Visa’s behavior keeps that from happening. That’s what this lawsuit is trying to change.
Who Is Eligible to Join the Lawsuit?
You might qualify to participate in this lawsuit if you’ve used a Visa-branded debit card at any point since January 1, 2012. That includes purchases made in stores or online. You don’t need to still have the same card, and you don’t need to remember every transaction.
If your card had a Visa logo or ran on a Visa-owned network (like Plus or Interlink), you might have paid more because of Visa’s high network fees. These fees raise prices across the board, and this lawsuit says that millions of people have paid too much without knowing it.
You could qualify even if you didn’t choose to use Visa. Many banks only offer cards that connect to Visa’s network. Even if other networks are available, Visa’s rules often block stores from using them.
If you want to learn more or look into joining the case, talk to the antitrust lawyers at Paul LLP Trial Attorneys today. We’re leading this lawsuit and offering free consultations. Call (816) 984-8100 or contact us online to get started.
