Uh-oh, it looks like someone is in trouble (*grabs popcorn*). Visa Inc. (V) is reportedly being investigated by the US Department of Justice over its methods for routing debit card transactions.
According to the 2010 Durbin Amendment law, banks must include two networks on their debit cards (this can be a major one like Visa or Mastercard and a smaller one like Star or Pulse). The DoJ argues that Visa’s debit card technology makes it harder for online transactions to be routed over alternative networks, hence limiting competition in the online transactions market. Visa, meanwhile, claims its debit practices are in accordance with the law and that it faces plenty of competition from rival Mastercard. Sounds like a bickering couple to us!
News of the antitrust probe didn’t go down well with investors — Visa’s shares dropped 6.2% on Friday, their biggest daily drop in nearly a year.