The ACCC (Australian Competition & Consumer Commission) has accepted a CEU from Visa in relation to concerns that it may have limited competition in the debit card acceptance market through its dealings with large merchants.
The ACCC was concerned that Visa’s strong market position in the credit card acceptance market could be leveraged to limit competition in the debit card acceptance market by tying cheaper ‘strategic merchant rates’ for credit card transactions to commitments from merchants to process Visa branded dual network debit card transactions via the Visa network rather than through eftpos.
The fees paid by a merchant for dual-network debit card payments can vary depending on the debit card network used for processing the transaction. Almost all Visa debit cards are dual-network debit cards that can be processed using either the Visa or eftpos debit card network, Australia’s domestic debit card network.
Since 2017, merchants have been able to choose whether contactless payments made using a Visa branded dual-network debit card are processed by Visa or eftpos, an RBA (Reserve Bank of Australia) initiative known as ‘least-cost routing’.
The ACCC investigated allegations that Visa may have engaged in anti-competitive conduct, amid concerns that Visa could influence merchants’ choice of debit card network, thereby diminishing competition between Visa and eftpos in relation to debit card acceptance.
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