Visa Hit By Japan’s First-Ever Antitrust Action Against Credit Card Industry

Japan’s Fair Trade Commission has taken its first administrative action against the credit card industry, targeting Visa Worldwide Pte Ltd., a subsidiary of Visa Inc.‘s

Singapore operations, over suspected monopolistic practices in the authorization system market.

What Happened: The FTC approved Visa Worldwide’s voluntary corrective action plan following a probe into allegations that the payment giant effectively forced credit card companies to use its proprietary credit authorization system, reported The Asahi Shimbun.

The company must report implementation progress to regulators for five years under the commitment procedure based on Japan’s Anti-Monopoly Law.

Visa, the world’s largest international credit card network, operates through regional subsidiaries including Singapore-based Visa Worldwide, which manages Asian operations. The company doesn’t issue cards directly but provides transaction infrastructure, collecting license fees from card issuers and payment processors.

The investigation centered on Visa’s November 2021 terms changes that rendered credit card companies managing merchant outlets ineligible for commission discounts in certain industries unless they adopted Visa’s authorization system. According to the FTC, nearly all companies using rival systems switched to Visa’s platform after the February 2018 announcement.

The authorization system generates approximately 10 billion yen ($68 million) annually in fees from these companies. When consumers make purchases, card companies use this system to verify spending limits and detect potential fraud with cardholders’ issuing banks.

Visa did not immediately respond to Benzinga‘s request for comment.