Visa faces fresh antitrust challenge over US debit interchange fees

Visa is set to remain embroiled in years of interchange fees litigation after a US federal judge ruled that a 2019 multibillion-dollar settlement does not shield the payments giant from a new wave of antitrust lawsuits targeting its dominance in the debit card market.

Visa faces fresh interchange fees challenge

The decision, handed down by Judge Margo Brodie in Brooklyn, New York, allows merchants to pursue claims that Visa has unlawfully monopolised debit card processing.

The claims echo but remain distinct from a parallel case being advanced by the US Department of Justice (DOJ).

Settlement Does Not End the Story

Visa had argued that many of the merchant plaintiffs should be excluded from the new class action, on the basis that they had already released their claims as part of the record-breaking $5.6 billion “swipe fee” settlement in 2019.

That deal resolved long-running litigation dating back to 2005, which accused both Visa and Mastercard of conspiring to fix interchange fees.

But Judge Brodie rejected Visa’s position, stressing that the “facts are materially different” in the latest round of complaints.

Notably, the new case names only Visa, rather than both card networks, and centres specifically on the debit segment of the market.

This distinction, the court said, prevents Visa from using the earlier settlement as a shield against fresh allegations.

Allegations of Market Monopoly

The October 2024 lawsuit filed by merchants paints Visa as a monopolist, controlling over 60% of US debit transactions and extracting more than $7 billion annually in processing fees.

According to the claim, Visa maintains this dominance not through innovation but by systematically insulating itself from competition.

The merchants allege that Visa deploys exclusionary contracts and punitive fee structures to deter retailers from using alternative debit networks.

The complaint also asserts that Visa has struck deals designed to co-opt potential rivals, offering financial incentives to partners who might otherwise emerge as competitors.

These arguments closely mirror the DOJ’s own antitrust case against Visa, filed a month earlier in Manhattan federal court.

The Justice Department contends that Visa’s practices amount to an illegal maintenance of monopoly power, stifling competition and raising costs for both merchants and consumers.

Visa Pushes Back

Visa, for its part, has dismissed the allegations as unfounded.

Julie Rottenberg, the company’s general counsel, described the DOJ’s case as “meritless,” insisting that consumers face an “ever-expanding universe of companies” offering alternative payment options.

According to Visa, far from being monopolistic, the debit market is experiencing robust competition from fintechs, challenger banks, and mobile wallet providers.

Nonetheless, in June a federal judge denied Visa’s request to dismiss the DOJ case, describing the company’s arguments as “premature.”

That ruling cleared the way for the government’s action to proceed — and now, with Judge Brodie’s decision, Visa must also prepare to face merchants in a parallel class action.

Years of Litigation Ahead

The twin cases place Visa under legal pressure on two fronts: from the federal government seeking structural remedies to open up competition, and from merchants demanding damages for what they claim are inflated fees.

The company’s legal exposure could stretch well into the decade, raising questions not only about potential financial penalties but also about how Visa’s business model might have to adapt.

For merchants, the litigation is a test of whether long-standing frustrations over debit card costs can translate into meaningful change.

For regulators, it is an opportunity to probe whether entrenched players in payments infrastructure can be compelled to cede ground to newer networks and technologies.

Either way, the era when the 2019 settlement was thought to have closed the book on swipe fee disputes is now firmly over.

Visa once again finds itself at the centre of a battle over the economics of everyday payments — and this time, the fight may be even more consequential.