The ACCC has slapped credit and debit card giant Visa with a court-enforceable undertaking to stop it from offering cheaper rates to merchants for processing transactions through its own network.

The consumer watchdog had been concerned that Visa was using its branded dual network debit cards – which can be processed either through eftpos or Visa’s network and are a “must have” form of payment for many merchants – to limit competition by offering merchants a discount on rates in exchange for committing to processing the transactions via Visa rather than eftpos.

This would limit competition in the market and disadvantage eftpos to Visa’s benefit, said ACCC chair Rod Sims.

Rod Sims, ACCC.

“Australian consumers use debit cards every day when buying goods or services, and COVID-19 has accelerated the transition from cash to card payments. With this in mind, the importance of competition in card acceptance markets is vital to both merchants and consumers alike.

“This undertaking is an important step to ensuring that Visa and other debit card network providers are able to compete on their merits to provide debit card acceptance services to merchants,” he said, adding that merchants will now be able to freely choose which network to process payments with and not need to fear that Visa would raise its costs in response.

Visa has accepted the undertaking, but not admitted to breaching any competition laws.