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said it had been informed of the DOJ investigation. "We
Insider’sreport have received a notice to preserve relevant documents
related to the investigation," the company wrote.
on payments On Sen. Durbin's radar

Sen. Durbin raised the issue of PINless debit in a July 2020
letter to Federal Reserve Board Chairman Jerome Powell.
Interchange in Citing CMPSI's analysis, he asked the Fed to investigate
whether the large bank debit card issuers and the card
brands are putting up unnecessary roadblocks to merchant
the crosshairs choice in debit card routing.

transactions has increased dramatically during the
By Patti Murphy "Because the volume of online 'card-not-present'
ProScribes Inc. COVID-19 pandemic, the need to address obstacles to
PINless debit competition has grown more urgent," Durbin
he major card brands are on the hot seat. Under wrote.
pressure from Sen. Dick Durbin, D-Ill.,Visa and
Mastercard postponed for a year interchange Durbin, who chairs the powerful Senate Judiciary
T rate changes that were slated for April 2021. Committee and is Senate Democratic Whip, has been on a
This followed news that the financial software giant Intuit tear against the major card brands. Last month, he, along
is suing the two brands in federal court, alleging price fix- with Rep. Peter Welsh, D-Vt., fired off letters to the CEOs
ing, and that the U.S. Department of Justice launched an of Mastercard and Visa urging them to put the brakes on
investigation into whether Visa is stifling competition in interchange rate increases hikes for the second year in a
the debit card market. row. Both companies quickly acquiesced.

Visa confirmed the DOJ investigation following a Wall The two lawmakers made a similar request last year, which
Street Journal report that antitrust investigators are resulted in a one-year (now two-year) hold on increases.
gathering information to determine whether Visa is Both sets of letters complained that planned interchange
limiting merchants' ability to route debit card transactions increases for online purchases were a bad deal for small
over less expensive regional PIN debit networks, like NYCE merchants who have been moving online in droves in
and Shazam. The primary focus is online transactions but response to the COVID-19 pandemic-related brick-and-
not to the exclusion of how in-store transactions are routed, mortar closures.
according to sources quoted by the Wall Street Journal.
Last month, Durbin also delivered a stinging indictment
The Durbin Amendment to the 2010 Dodd-Frank Act, of the two card giants during a Judiciary subcommittee
which ushered in regulation of debit card interchange, hearing on competition policy and antitrust reform.
also requires that merchants be able to choose from two Referring to interchange as "swipe fees," he argued it is
unaffiliated networks, such as Visa and the Shazam regional "far in excess of any reasonable measure of cost, and far
ATM/POS network, for routing debit card payments. higher than what would [be] charged in a competitive
market. But Visa and Mastercard are so dominant in the
To accommodate growing preferences for debit cards for payments market that merchants couldn't stay in business
contactless and ecommerce payments, the various networks without using their cards. Where is the policing authority
have come up with the option known as PINless debit. to stop this duopoly from doing this to every merchant and
PINless debit is primarily used for low-dollar purchases. A retailer in America?"
2018 Federal Reserve study put the average value at $37.76.
No legislation related to interchange has been introduced
But there's a catch: for PINless debit to work, the card- in the current Congress. But given Durbin's leadership
issuing bank has to enable it through the card's bank role in the Senate (as whip, he's the second most powerful
identification number. And according to the merchant Democrat in that chamber) he could push fellow Democrats
consultancy CMPSI, only about 50 percent of debit cards to tackle interchange regulation as part of a larger legislative
accepted by merchants had been enabled for PINless debit package, as was the case with the Durbin Amendment. And
as of 2020. lawmakers on both sides of the political aisles have been
vocally critical of the market power of big tech companies.
According to the sources cited in the Wall Street Journal Antitrust concerns
article, the DOJ, among other things, is looking into
financial incentives Visa may be offering banks to not It's not just Congress that has its hackles up, either. Two
enable PINless debit routing through regional networks. years ago, the Federal Trade Commission launched a
In a filing with the Securities Exchange Commission, Visa preliminary inquiry into whether Mastercard and Visa
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