Visa In Court Over Alleged Misuse Of Power
Credit card giant Visa is being sued by Australia's competition watchdog over alleged abuses of its power.
The Australian Competition and Consumer Commission (ACCC) has launched legal proceedings, claiming Visa "misused its market power" to prevent the expansion of dynamic currency conversion (DCC) services.
DCC gives international cardholders the choice of completing a transaction in their home currency or in the local currency of the retail store or cash machine.
The ACC alleges travellers to Australia using a Visa payment card have been given no option but to use Visa's currency conversion system in transactions at Australian cash points since October 2007.
It claims Visa earned less revenue when a cardholder selected DCC services than when a cardholder used Visa's own currency conversion service.
It also alleges Visa "engaged in exclusive dealing" by supplying access to its payment network to Australian banks, and in turn retailers, on condition that they did not use rival currency conversion services.
Rod Sims, chairman of the regulator, said: "The alleged conduct by Visa gives rise to three concerns for the ACCC.
"First, it is alleged that travellers to Australia using a Visa payment card do not get to choose who does their currency conversion when withdrawing cash from an ATM. In particular, they are denied the ability to know the cost of transactions in their own currency at the time the transaction is made.
"Second, the ACCC alleges that Australian retailers were denied the opportunity to share in the revenue from processing DCC transactions at new merchant outlets.
"Finally, it is alleged that Australian suppliers of DCC services were, and continue to be, denied the opportunity to compete with Visa in relation to DCC services at ATMs."
Mr Sims added: "Pursuing companies who misuse their substantial market power, to the detriment of consumers and small businesses in particular, as is alleged against Visa in these proceedings, is an enforcement priority for the ACCC."
Visa has strongly rejected the allegations.