WASHINGTON -- The Federal Trade Commission has asked Visa for information regarding possible violations of new rules for debit-card processing that took effect under the Dodd-Frank Act’s Durbin amendment, the card company said this afternoon.
The FTC's Bureau of Competition made the request in a Voluntary Access Letter on Sept. 21, which asked Visa to supply documents and information on a voluntary basis. Visa said the request focuses on the "purposes, implementation, and impact of" its "optional PIN Debit Gateway Service." The company said it is cooperating with the bureau, and that revenue from the service is not material.
Visa initiated a new pricing strategy earlier this year intended to protect its dominant share in the debit-card market in response to a part of the regulation that took effect in April that requires banks to include multiple processing networks on their cards.
In the past, a card-issuing credit union or bank might have used Visa exclusively to process debit transactions authorized with a consumer's signature and Visa's Interlink debit network to authorize transactions made with a PIN. Those deals are no longer allowed under the Durbin amendment, meaning that the same credit union had to either add a PIN debit network that isn't operated by Visa, such as MasterCard's Maestro network, to its cards or replace Interlink entirely with a different provider.
The aim was to give merchants more control over their processing costs by giving them more options over which networks to route the transactions made in their stores.