Tokyo, 18 July, /AJMEDIA/
Japan’s antitrust watchdog on Wednesday probed the Japanese unit of global credit card brand Visa Inc for allegedly pressuring card companies to use only its credit information system, sources familiar with the matter said, a practice that could stifle competition and disadvantage consumers.
The Visa unit is suspected of charging higher fees to credit card companies that did not use its network to check credit information, forcing them to stop using its rivals’ networks or switch to using its network, according to the sources.
The Japan Fair Trade Commission conducted an inspection at the office of Visa Worldwide Japan Co in Tokyo as the alleged practice would violate the country’s antimonopoly law, they said.
The law prohibits companies in a dominant position from imposing unfair trading terms on firms with a weaker standing. The watchdog can issue cease and desist orders or impose a penalty if it finds a violation.
Visa is the most used credit card brand in Japan, accounting for about half of the market share, according to major credit card company Sumitomo Mitsui Card Co.
Visa’s practice is likely aimed at excluding competitors from the market, which could keep fees high and increase the burden on consumers and shops that use the service, the sources said.
Most domestic credit card companies use networks run by either Visa or NTT Data Japan Corp when checking credit information, according to the sources.
The watchdog also plans to look into Visa’s Singaporean unit overseeing the company’s operations in the Asia-Pacific region, as it suspects the unit had some involvement in the practices under investigation, the sources said.
The JFTC investigation will also check if Visa’s U.S. headquarters played a role, they said.
The total amount of credit card transactions in Japan in 2023 stood at about 105 trillion yen ($670 billion), according to the Japan Consumer Credit Association.
