Visa, the world’s largest electronic payment network, is being sued by the Australian competition watchdog over alleged abuses of its power.
The Australian Competition and Consumer Commission (ACCC) has launched proceedings against the credit card giant, claiming claims it “misused its market power” to prevent the expansion of dynamic currency conversion (DCC) (DCC) services.
The Commission says Visa has blocked DCC services at Australian ATMs since October2007 and engaged in exclusive deals by providing access to its payment network to banks and retailers on the condition they would only use Visa’s currency conversion system. DCC services allow international cardholders to see the amount their card will be charged, expressed in their home currency. The services use different rates, and the Commission claims Visa earned less when cardholders selected DCC.
Rod Sims, the Chairman of the ACCC, said customers: “are denied the ability to know the cost of transactions in their own currency at the time the transaction is made.”
If Visa loses the case it could face trouble beyond Australia. The ACCC alleges Visa sought to block DCC services “in many parts of the world, including Australia.” Similar litigation could follow should the ACCC be successful.
A Visa spokesman said: “We strongly reject allegations our rules on DCC services infringe competition laws.”
