Discover fires lawsuit alleging anti-competitive practices at Visa

Discover fires lawsuit alleging anti-competitive practices at Visa

Discover has filed a lawsuit accusing rival card scheme Visa of anti-competitve practices in its debit card business.

Discover, through its Pulse Network unit, is challenging a Visa rule that requires issuers to use its PIN services rather than those provided by alternative networks, alleging that Visa is engaged in "illegal behavior to fend off competitive threats to its debit network services monopoly".

Discover contends that Visa is offering incentives to merchants to route their debit transactions solely over the Visa network, in defiance of a 2010 ruling that allows merchants to choose between one of any two processing networks for their debit transactions.

The suit states: "In order to maintain its monopoly, Visa has undertaken a series of illegal actions that undermine competition - harming rival debit networks, merchants, acquirers, card issuers, and consumers."

Visa has yet to respond to the allegations.

Comments: (3)

A Finextra member
A Finextra member 26 November, 2014, 11:58Be the first to give this comment the thumbs up 0 likes

This should be interesting, given most of the folks at Discover were at Visa until recently and probably wrote most of the rules!

A Finextra member
A Finextra member 26 November, 2014, 13:22Be the first to give this comment the thumbs up 0 likes

I wasn't aware that any of Discover's or Pulse's top leadership came from Visa.  I would venture to say that not a single person at the executive leadership level of Discover or Pulse have every worked a day at Visa.  The claim is that Visa is violation provision in the Durbin Amendment

Douglas Hartung
Douglas Hartung - Diebold - Houston 26 November, 2014, 21:22Be the first to give this comment the thumbs up 0 likes

I'm not aware that ANY of the PULSE leadership team came from Visa.  In fact, there's been rather little change in their leadership for quite some time.  Probably not a good sign for the business.

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