The Justice Department is scrutinizing Visa Inc.’s relationships with large financial-technology companies as part of its antitrust investigation of the card giant, the Wall Street Journal reported. Antitrust investigators are looking into the financial incentives that Visa gave Square Inc., Stripe Inc. and PayPal Holdings Inc. Investigators want to know if those deals kept the payments firms from using other card networks or money-movement technologies. There is no indication that the department has reached any conclusions or is nearing the end of its probe. Visa is by far the biggest card network in the U.S., and for decades it has provided rails that debit- and credit-card payments run on. But Visa and other major networks, including Mastercard Inc., have long been concerned about competition from newer payments firms. Square, Stripe and PayPal have all grown rapidly, enabling millions of businesses to sell their goods quickly and easily to people around the world. To send transactions over Visa’s rails, fintech firms pay fees that Visa sets. (That model is similar to that of other major networks.) Some fintech companies enable payments that bypass Visa and other major card networks. For example, some allow payments to travel from one bank account to another, without using card rails. Visa has at times offered to lower fees or give other rewards in exchange for fintech firms sending more transactions over Visa rails rather than other networks or technologies. Pricing arrangements of interest to the Justice Department include one where Visa offered financial incentives to PayPal. Investigators are looking into whether those incentives convinced PayPal to encourage people to make payments via Visa-branded cards. (Subscription required.)
