Visa Faces Japan's First-Ever Antitrust Action Over Credit Card Industry Practices

Japan's Fair Trade Commission has taken its first administrative action against the credit card industry, targeting Visa Worldwide Pte Ltd. for suspected monopolistic practices in the authorization system market. Visa has agreed to a voluntary corrective action plan, requiring it to report implementation progress to regulators for five years. The investigation centered on Visa's terms changes that forced credit card companies to adopt its authorization system. The move comes as Visa faces mounting competitive pressure from stablecoins and digital payment alternatives.

Japan's Fair Trade Commission (FTC) has initiated its first administrative action against the credit card industry, specifically targeting Visa Worldwide Pte Ltd. over suspected monopolistic practices in the authorization system market. The FTC approved Visa's voluntary corrective action plan, which requires the company to report implementation progress to regulators for the next five years [1].

The investigation focused on Visa's November 2021 terms changes, which 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 [1].

This regulatory scrutiny comes as Visa faces mounting competitive pressure from stablecoins and digital payment alternatives. Stablecoins now process approximately $800 billion monthly in transactions, approaching Visa's $1.1 trillion monthly volume [1]. The U.S. Senate's passage of the GENIUS Act establishing stablecoin frameworks could further 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 [2]. Visa's stock has gained over 13% year-to-date, outpacing Mastercard Inc. MA at 7.60%, though both lag broader technology sector gains [1].

References:
[1] https://www.benzinga.com/markets/equities/25/07/46593164/visa-hit-by-japans-first-ever-antitrust-action-against-credit-card-industry
[2] https://www.scmp.com/news/asia/east-asia/article/3319180/japanese-regulators-find-visa-pressured-firms-hiked-fees