The U.S. Department of Justice (DOJ) is investigating Visa inc. ‘s ties to major fintech companies as part of an ongoing antitrust investigation, the Wall Street Journal reported on Oct. 28.
U.S. Justice Department antitrust investigators are looking into Visa’s incentives for cooperation with fintech companies such as Square, Stripe and PayPal, according to the report. It has been shown that Visa sometimes offers fee reductions or other incentives in exchange for fintech companies trading through Visa rather than other card organization networks. The investigating authorities want to know what role Visa’s partnerships with the fintech companies played.
It is understood to be part of an antitrust investigation of Visa that the US Department of Justice (DOJ) began earlier this year. In March, the DOJ antitrust panel opened an investigation into whether Visa was restricting merchants from using lower-cost networks in the debit-card market. However, there is no information to suggest that the DOJ has reached any conclusions or is nearing completion of the investigation.
The DOJ also launched an antitrust investigation into Visa’s acquisition of fintech platform Plaid in November. By January, Visa and Plaid had abandoned their merger plans.
Visa isa world famous Bank card organization. It started issuing Visa cards as early as 1976. Its predecessor was Bank Americard issued by Bank of America. In 2008, after a restructuring, it went public on the New York Stock Exchange.
Visa reported annual results for the fourth quarter of fiscal 2021 and fiscal 2021 after U.S. stocks closed on Tuesday. Visa’s Q4 net revenue was $6.559 billion, up 29% from a year earlier. Net profit was $3.584 billion, up 68 percent from a year earlier. During the quarter, Visa payments grew 17% from a year earlier.
It’s worth noting that fintech companies including Square and PayPal are also under investigation by the U.S. Consumer Financial Protection Bureau (CFPB) over consumer data protection.
It has previously been reported that the U.S. Consumer Financial Protection Bureau (CFPB) will notify companies such as Amazon, Apple, Facebook, Google, PayPal, and Square to provide information about the company’s payment system data application program, which relates to data collection and profitability, and whether restrictive access and other consumer protection regulations are included. Despite the relatively positive results, investors were under pressure for a long time after the incident because of concerns about Visa and Mastercard.
The CFPB plans to require companies to provide information about how they collect, use and market consumer financial data. In recent years, these big tech companies have started to offer digital payment services that can bring new risks to consumer justice, transparency and competition, while making consumers easier.