Visa’s grip on the U.S. debit market might be slipping. Could this be the beginning of the end of Visa’s reign?
The U.S. Department of Justice (DOJ) has taken aim at Visa, accusing the payments giant of stifling competition and operating a monopoly in the debit transactions market.
With a massive 60% market share and $7 billion in transaction fees annually, Visa’s dominance is now under legal fire.
Filed on September 24 in a New York federal court, the lawsuit alleges that Visa leverages exclusivity agreements and potential penalties to block out competitors.
U.S. Attorney General Merrick Garland emphasized that Visa’s monopolistic behavior is hitting consumers where it hurts—right in their wallets. Higher prices and reduced service quality have been traced back to Visa’s control over the market.
The DOJ complaint argues:
We allege that Visa has unlawfully amassed the power to extract fees that far exceed what it could charge in a competitive market. Merchants and banks pass along those costs to consumers, either by raising prices or reducing quality or service. As a result, Visa’s unlawful conduct affects not just the price of one thing – but the price of nearly everything.”
Adding fuel to the fire, the DOJ claims Visa is using its size and resources to lure potential competitors into partnerships, further strengthening its market hold.
However, Visa’s position may not be as secure as it seems. Analysts have begun raising alarms about emerging competition, particularly from stablecoins. Co-founder of Sacra, Jan-Erik Asplund, predicted that stablecoins—cryptocurrencies backed by fiat—could soon surpass Visa in international transactions.
Additionally, stablecoins are gaining traction for their convenience, especially outside the U.S., where they’re already overtaking fiat currencies in several markets.
Also Read: The Market Cap of Stablecoins Reaches Two-Year High, Surpassing $161 Billion: CCData
Visa, however, has pushed back on these claims, arguing that stablecoin data is unreliable and that the hype over a potential shift in the global payments landscape is overblown.
As this legal battle unfolds, the question remains: Can Visa maintain its iron grip, or will new challengers, like stablecoins, finally disrupt the status quo?
