FTC acts on Visa over suspected fee abuse to sway credit card firms
The Fair Trade Commission has obliged a Visa group company to adhere to its corrective action plan over suspicions that it effectively forced credit card companies to use the group's credit authorization system.
Visa Worldwide Pte Ltd.'s Singapore headquarters submitted its voluntary plan following the FTC's investigation in accordance with the 'commitment procedure' based on the Anti-Monopoly Law, commission officials announced July 22.
It was the FTC's first administrative action against the credit card industry.
The commission approved the company's plan. Visa Worldwide will be required to report to the FTC on how the plan is implemented for five years.
Visa is the largest international credit card network. Visa Worldwide, based in Singapore, operates the group's business in Asia, including Japan.
Visa, which does not issue credit cards on its own, provides systems necessary for credit card transactions.
It receives license fees from credit card companies that issue cards to consumers as well as from those that process payments made to retailers, restaurants and other businesses.
The FTC investigation focused on Visa Worldwide's actions regarding the group's credit authorization system.
When consumers pay with their credit card, credit card companies that manage affiliated outlets use this system for a fee to check the spending limit or possible fraudulent use with cardholders' credit card companies.
According to the FTC, when Visa Worldwide changed its terms in November 2021 it rendered credit card companies that manage affiliated outlets ineligible for a discount in a type of commission charged for payments in certain industries unless they use Visa's credit authorization system.
After the company announced the change in February 2018, the FTC said almost all credit card companies that had used a rival credit authorization system switched to Visa's system.
The watchdog also shared that Visa received about 10 billion yen ($68 million) annually in fees charged to these companies for using its credit authorization system.
The FTC conducted an onsite investigation of Visa's Japanese subsidiary last July on suspicion that the updated terms restricted free transactions of credit card companies and excluded companies that provide a rival credit authorization system.
It concluded that Visa Worldwide's action constituted a suspected violation of the Anti-Monopoly Law that prohibits unfair trade practices such as 'trading on restrictive terms.'
According to the Japan Consumer Credit Association, the country made about 116 trillion yen in payments via credit cards in 2024.
A survey by the private research company Ipsos found that the Visa brand accounted for about 50 percent of that amount.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Nikkei Asia
3 hours ago
- Nikkei Asia
Toyota to make EVs in Czech Republic, its first in Europe
Toyota to begin EV production in Europe in preparation for tighter environmental restrictions there. (Photo by Eiki Hayashi) SHOTA UEHARA NAGOYA, Japan -- Toyota Motor will start producing electric vehicles at a Czech subsidiary as early as 2028, its first European-built EVs, Nikkei learned Tuesday. The Japanese automaker is expected to make an electric sport utility vehicle at the site, with annual production aimed at around 100,000 units.
Yomiuri Shimbun
4 hours ago
- Yomiuri Shimbun
Japan Releases Guidelines for Stronger Space Defense as It Looks to Protect Its Satellites from Adversaries
The Defense Ministry unveiled on Monday its first-ever guidelines for space defense, meant to lay out the direction for strengthening these defenses. The guidelines clearly state that satellites operated by the Self-Defense Forces will be fully protected, as well as that companies will be ensured safe use of space. According to the guidelines, the government aims to build security in space through public-private partnerships, incorporating private-sector technology. The guidelines raise concerns about countries such as China and Russia, which are developing killer satellites that can attack other nations' satellites, and about the growing militarization of space. Given the increasingly severe security environment in space, the guidelines stress the need to improve defenses to allow for the safe operation of satellites and other assets run by the government, including the SDF, as well as by Japanese firms. One of the core tenants of the guidelines is the need for improved space domain awareness for monitoring the operational status, purpose and capabilities of other countries' satellites. The plan is to build the capacity to detect threats, such as killer satellites and anti-satellite weapons, and to protect Japan's satellites. The guidelines also note the importance of stable satellite communications for military intel, including for detecting and tracking missiles launched by enemy countries, and that such intel should be shared within the SDF. Additionally, the guidelines push for an improved ability to jam enemy countries' communications. To support these efforts, the guidelines insist on a proactive use of innovative technologies from the private sector, where commercial services have significantly advanced. The guidelines also emphasize the need to cultivate experts in the space field, recruit more outside talent and educate staff in the Defense Ministry and the SDF.
Nikkei Asia
4 hours ago
- Nikkei Asia
Japan's state-backed JIC to launch $5.4bn fund for big restructuring deals
Finance Public-private investor sees more Japanese involvement in domestic M&A Japan Investment Corp. has funded companies such as chip materials maker JSR. TASUKU IKEDA TOKYO -- The state-backed Japan Investment Corp. will set up an 800 billion yen ($5.4 billion) fund as early as this year for sweeping business overhauls as Japanese companies log a record pace of mergers and acquisitions. The fund, to be established through subsidiary JIC Capital, is expected to focus on deals topping 100 billion yen with investment horizons of about 10 years.
