VISA AND MASTERCARD DEBIT CARDS/BLOOMBERG
Visa and Mastercard are once again in the crosshairs of US antitrust regulators over policies that can prohibit merchants from routing card transactions over alternative debit networks, reported Bloomberg.
At issue is whether Visa and Mastercard and large debit card issuers are blocking retailers from routing some mobile wallet payments and tap-to-pay transactions over alternative networks such as Pulse, NYCE and Star.
A 2010 law known as the Durbin amendment—named for Senator Dick Durbin, an Illinois Democrat who ushered it into existence—limited the amount the largest US banks could collect for debit transactions and required that merchants have at least two options for routing them.
When chip cards began arriving in the US roughly five years ago, they carried so-called application identifiers (AIDs) which allow merchants to route debit transactions to their preferred network.
FTC investigators have asked questions about transactions made with mobile wallets, said the people. Such transactions can automatically route to global AID, which uses Visa and Mastercard networks.
The investigators are also looking into whether the country’s largest debit card issuers are prohibiting transactions that do not require a personal identification number from being routed over the alternative networks.
The FTC has examined issues with debit routing in the past. Visa amended its rules in 2016 in response to an FTC inquiry, clarifying that retailers would not be required to ask cardholders to choose a network for their debit card transactions.