Visa Settles with U.S. Department of Justice and Seven State Attorneys General
SAN FRANCISCO, Oct 04, 2010 (BUSINESS WIRE) -- Visa Inc. (NYSE: V) announced today a settlement agreement with the U.S. Department of Justice (DOJ) and the attorneys general of seven states to resolve antitrust investigations into the company's merchant acceptance rules in the U.S. As part of the settlement, Visa will allow U.S. merchants to offer discounts or other incentives to steer customers to a particular form of payment including to a specific network brand or to any card product, such as a "non-reward" Visa credit card.
Visa's rules always have allowed U.S. merchants to steer customers to other forms of payment and offer discounts to customers who choose to pay with cash, check or PIN debit. The new rules will expand U.S. merchants' ability to discount for their preferred form of payment, though they will not be able to pick and choose amongst issuing banks. The settlement agreement does not address Visa's rule prohibiting U.S. merchants from surcharging consumers.
"As we referenced in our previous public filings, our constructive conversations with the Department of Justice have resulted in an amicable resolution of the Department's broad-based investigation that will lead to Visa making a reasonable modification to our discounting rule," said Josh Floum, General Counsel, Visa Inc. "Visa always has allowed merchants to discount for cash and PIN-debit, and extending the ability to discount by network brand is a reasonable accommodation. The settlement will not impact our ability to continue growing our business by offering innovative payments products that consumers and merchants value above any others. The settlement also gives U.S. merchants new tools to manage their acceptance costs while benefitting from the tremendous value electronic payments deliver."
There is no monetary obligation associated with the DOJ settlement. The investigation brought by the state attorneys general is resolved on the same terms, plus reimbursement of the attorneys' fees and expenses. MasterCard has agreed to enter into the same settlement and will change its relevant rules as well.
The DOJ issued a civil investigative demand to Visa in 2008, seeking information about certain Visa acceptance rules, including those related to surcharging and discounting. A working group of state attorneys general issued a similar civil investigative demand in 2009. Both investigations end today with a consent decree that sets forth the terms of the settlement, subject to court approval.
Visa will make formal rule changes after the court enters a final judgment following a public comment period, but will refrain from enforcing its current discounting rules in the interim. U.S. merchants will receive additional information about the settlement from their acquiring financial institution after the final judgment.
About Visa Inc.: Visa Inc. is a global payments technology company that connects consumers, businesses, financial institutions and governments in more than 200 countries and territories to fast, secure and reliable digital currency. Underpinning digital currency is one of the world's most advanced processing networks--VisaNet--that is capable of handling more than 10,000 transactions a second, with fraud protection for consumers and guaranteed payment for merchants. Visa is not a bank, and does not issue cards, extend credit or set rates and fees for consumers. Visa's innovations, however, enable its financial institution customers to offer consumers more choices: Pay now with debit, ahead of time with prepaid or later with credit products. For more information, visit https://www.corporate.visa.com.
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SOURCE: Visa Inc.