Japanese regulators find Visa pressured firms, hiked fees

South China Morning Post

3 days ago

Japan 's antitrust watchdog said on Tuesday it had told Visa Worldwide to reform its business practices after concluding that the firm restricted and pressured card companies to use its credit information system.
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It marks the first administrative action taken by the Japan Fair Trade Commission against a credit card company. The commission said the global credit card brand's
Singaporean unit, which manages the Asia-Pacific region including Japan, had charged higher fees to other credit card firms that did not use its network to check credit information.
The commission said the Visa unit has submitted plans to improve its practices, adding that it has accepted the plans. The company was exempted from facing fines or other punitive measures under the antimonopoly law.
According to the Japan Consumer Credit Association, as of 2020, the Visa credit card brand accounted for about half of the market share in Japan. The total amount of credit card transactions in the country in 2024 stood at 116 trillion yen (US$785 billion).
Credit card transactions involve an issuing company and management company, which both utilise a trusted reference system when a transaction is made, according to the watchdog.
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Interchange fees, typically set by global brands, are paid by the management company to the issuing company during a transaction, while the issuing company pays a service charge to a different company – in this case Visa Worldwide – providing the reference system.