financemagnates.com
The US Justice Department (DOJ) is reportedly launching a probe on payments giant Visa and its current relationships with large fintech companies. According to The Wall Street Journal, citing people familiar with the matter, the investigation is part of the Department’s antitrust inquiries of the card company.
Specifically, authorities want to know more about the financial incentives granted by Visa to Square, Stripe, and PayPal. “Investigators want to know if those deals kept the payments firms from using other card networks or money-movement technologies, the people said,” the WSJ noted.
However, there is no information on whether the authorities had reached a conclusion or not on the matter or if its inquiries are coming to an end at this stage. Moreover, the WSJ pointed out that the US Justice Department had been investigating a deal arranged by Visa with Square’s Cash App since six years ago.
“Visa offered to lower fees for Square and to send performance payments to the company that would get bigger when Square sent more transactions over Visa,” anonymous sources told the media outlet. So far, the DOJ’s antitrust investigation had just been limited to saying that Visa has been compliant with the applicable laws. “We believe Visa’s U.S. debit practices are in compliance with applicable laws,” the DOJ commented at the time.
Visa Deals with Fintech Firms This Year
In terms of recent deals with fintech firms, Deserve announced today that it had received a strategic investment from Visa to expand its credit-card-as-a-service for financial institutions, fintechs, and brands. Visa joins other investors like Mission Holdings, Mastercard, Ally Ventures, Goldman Sachs Asset Management, and Sallie Mae to bolster Deserve’s offerings.
Also, Visa entered into a definitive agreement in July for the acquisition of Currencycloud, a UK-based business-to-business payments startup. Visa is an existing partner and investor in Currencycloud, which is valued at £700 million, inclusive of cash and retention incentives.