Visa AP (Australia) Pty Limited and Visa Worldwide Pte Limited

The Australian Competition and Consumer Commission (ACCC) has accepted a court enforceable undertaking from Visa AP (Australia) Pty Limited and Visa Worldwide Pte Limited (together Visa) in relation to concerns that Visa may have limited competition in relation to debit card acceptance through its dealings with large merchants.

The Visa entities are subsidiaries of Visa Inc., a global payments technology company which provides transaction processing services (primarily authorisation, clearing and settlement services) to financial institutions and merchants in Australia and elsewhere.

The ACCC investigated allegations that Visa may have engaged in anti-competitive conduct, by offering certain large merchants cheaper interchange rates (known as ‘strategic merchant rates’) for processing credit card payments if they agreed to process Visa branded dual-network debit card payments through the Visa network.

Since 2017, merchants have been able to choose whether contactless Visa dual network debit card (DNDC) payments made in store are processed by Visa or eftpos. The ACCC had concerns that Visa’s strong market position in the credit card acceptance market could allow it to harm competition in the debit card acceptance market.

To address the ACCC’s concerns, Visa provided the ACCC with a section 87B undertaking that it will:

• not terminate, withdraw or change a merchant’s credit strategic merchant rate or credit segment interchange rate, or otherwise increase the total costs associated with a merchant’s acceptance of Visa credit payments, following a merchant’s decision to process Visa DNDC payments through a network other than the Visa network;
• not offer a credit strategic merchant rate to a merchant on condition that the merchant processes Visa DNDC payments through the Visa network, and will not consider a merchant’s Visa DNDC payments volume or processing decisions in assessing that merchant’s eligibility for a credit strategic merchant rate;
• provide written reasons to a merchant for any withdrawal or change to that merchant’s credit strategic merchant rate, if that merchant has indicated an intent to process (or has already commenced processing) Visa DNDC payments through a network other than Visa;
• publicise the ability of merchants to process Visa DNDC payments through a network other than the Visa network without affecting their credit strategic merchant rate;
• prior to commencing negotiations, provide merchants with eligibility criteria for debit and credit strategic merchant rates and allow merchants to choose how negotiations proceed;
• include an appropriate dispute resolution framework in Visa’s agreements with merchants;
• provide annual training to Visa staff that engage with merchants in respect of obligations contained in the undertaking and compliance obligations under the Competition and Consumer Act 2010 (Cth); and
• appoint and fund an independent auditor to conduct an annual audit of Visa’s compliance with the undertaking.