Visa Hit By Japan's First-Ever Antitrust Action Against Credit Card Industry

Japan’s Fair Trade Commission has taken its first administrative action against the credit card industry, targeting Visa Worldwide Pte Ltd., a subsidiary of Visa Inc.‘s V Singapore operations, over suspected monopolistic practices in the authorization system market.

What Happened: The FTC approved Visa Worldwide’s voluntary corrective action plan following a probe into allegations that the payment giant effectively forced credit card companies to use its proprietary credit authorization system, reported The Asahi Shimbun.

The company must report implementation progress to regulators for five years under the commitment procedure based on Japan’s Anti-Monopoly Law.

Visa, the world’s largest international credit card network, operates through regional subsidiaries including Singapore-based Visa Worldwide, which manages Asian operations. The company doesn’t issue cards directly but provides transaction infrastructure, collecting license fees from card issuers and payment processors.

The investigation centered on Visa’s November 2021 terms changes that rendered credit card companies managing merchant outlets ineligible for commission discounts in certain industries unless they adopted Visa’s authorization system. According to the FTC, nearly all companies using rival systems switched to Visa’s platform after the February 2018 announcement.

The authorization system generates approximately 10 billion yen ($68 million) annually in fees from these companies. When consumers make purchases, card companies use this system to verify spending limits and detect potential fraud with cardholders’ issuing banks.

Visa did not immediately respond to Benzinga's request for comment.

Why It Matters: FTC officials concluded the updated terms constituted suspected violations of unfair trade practices by restricting free transactions and excluding rival authorization providers. The watchdog conducted onsite investigations of Visa’s Japanese subsidiary in July 2024.

This regulatory scrutiny comes as Visa faces mounting competitive pressure from stablecoins and digital payment alternatives. Recent reports indicate stablecoins now process approximately $800 billion monthly in transactions, approaching Visa’s $1.1 trillion monthly volume. The U.S. Senate’s passage of the GENIUS Act establishing stablecoin frameworks could intensify competition for traditional card networks.

Japan’s credit card market represents significant volume, with approximately 116 trillion yen ($788 billion in payments processed in 2024, according to the Japan Consumer Credit Association.

Visa stock has gained over 13% year-to-date, outpacing Mastercard Inc. MA at 7.60%, though both lag broader technology sector gains. Compare Visa and Mastercard on price trend, growth, momentum, and quality with Benzinga’s Stock Edge Rankings.