Merchants are applauding the U.S. Department of Justice's lawsuit against Visa, which accuses the company of monopolizing the debit card network market and blocking competitors and technology companies from entering the space. Retailer groups support the lawsuit but argue it doesn't go far enough. Stephanie Martz of the National Retail Federation and Doug Kantor of the National Association of Convenience Stores both pointed out Visa’s dominance in both credit and debit card markets.
Legal experts expect Visa to fight the lawsuit vigorously. James Huber of Global Legal Law Firm emphasized Visa’s powerful position in debit card transactions, while attorneys from Mintz pointed to a 2018 Supreme Court decision supporting credit card networks' "two-sided platforms" involving both merchants and consumers, suggesting this could aid Visa's defense.
Karen Webster, CEO of Market Platform Dynamics, argued that the DOJ's lawsuit overlooks how Visa’s four-party network has benefited merchants since the 1960s. She noted that merchants already have options to route debit transactions through various PIN networks under the Durbin Amendment. Webster suggested that merchants may lack confidence in alternative networks due to concerns about fraud protection and transaction declines. She also defended Visa’s investments in fraud prevention and network resiliency.
Two recent surveys highlight growing consumer distrust in digital payments due to widespread fraud. A survey by Chubb revealed that 61 percent of 2,600 consumers across eight countries have changed their behavior or reduced their use of payment platforms because of cyber scams. Among the respondents, 63 percent had either experienced a cyber scam or knew someone who had.
Phishing, impersonation scams and fake product purchases were cited as the most common concerns. Key findings showed that 32 percent don't trust the security of digital payments, 53 percent worry about account hacks, and 37 percent fear they won’t recover their money if scammed.
Similarly, ACI Worldwide's 2024 Speedpay Pulse Report found that while 77 percent of Americans prefer paying bills digitally, nearly 19 percent have fallen victim to online identity theft. Two in five reported identity theft incidents leading to unauthorized accounts being opened in their names. The survey also revealed that 50 percent of consumers feel companies fail to educate them on data security.
The Office of the Comptroller of the Currency joined financial institutions in opposing Illinois' Interchange Fee Prohibition Act (IFPA), a law that exempts sales tax and tips from interchange fees. The OCC filed an amicus brief with the U.S. District Court for the Northern District of Illinois, echoing concerns raised by bank trade groups that the IFPA could disrupt the credit and debit card payment system. The OCC called the law "unworkable" and warned it could lead to fragmentation of the payment system.
Merchant groups, including the National Association of Convenience Stores and the National Retail Federation, support the law, arguing that it challenges Visa and Mastercard's control over swipe fees, which they claim are centrally set and inflationary. The groups have requested to intervene in the lawsuit or file their own amicus brief supporting Illinois.
The IFPA, set to take effect in July 2025, would bar financial institutions from charging interchange fees on taxes and tips and restrict the use of transaction data. Banks argue this would undermine fraud prevention, compliance and operational processes. They also claim the law conflicts with federal statutes like the National Bank Act and Durbin Amendment. The OCC warned other states might adopt similar laws, creating a fractured payment system.
Senator Richard Durbin, D-Ill., refutes claims that Illinois' Interchange Fee Prohibition Act (IFPA), which exempts sales tax and gratuities from interchange fees, conflicts with the Durbin Amendment, part of the 2010 Dodd-Frank Act. The Durbin Amendment empowers the Federal Reserve to cap debit card interchange fees for large banks. Trade groups representing financial institutions, including the Illinois Bankers Association and the American Bankers Association, filed a lawsuit to overturn the IFPA, claiming it interferes with federal regulations on debit card interchange.
In an amicus brief, Senator Durbin argued that the IFPA aligns with the Durbin Amendment’s purpose, as both regulate price-fixed fees charged by networks on behalf of debit card issuers. Durbin emphasized that the IFPA is consistent with sound policy, protecting merchants and consumers from excessive fees.
Durbin's focus on interchange fees extends beyond debit cards. He also supports the Credit Card Competition Act, which would require financial institutions with over $100 billion in assets to offer credit card processing over networks other than Visa and Mastercard, such as Pulse, Star, NYCE or Shazam.
Toast, a restaurant management system and POS provider, raised processing fees for small and midsize clients in September 2024, marking its first fee increase in 12 years. The fee adjustment, impacting a limited number of clients, ranges from 0.05 to 0.23 percent, or less than a penny per $1 transaction.
Toast attributed the increase to rising costs and announced an expansion of its surcharge feature, which enables restaurants to pass credit card processing fees onto customers.
The fee hike has drawn mixed reactions from the restaurant community. Toast emphasized that only a small portion of its 120,000 clients were affected and that analysts believe the increase won’t significantly affect customer retention due to the surcharge feature.
However, some restaurant owners, like Kathi Turner of Turner Seafood Corp., voiced concerns over the lack of choice, recalling previous fee increases, such as Toast’s retracted 99-cent fee on online orders in 2023, which led to CEO Chris Comparato's resignation. Current CEO Aman Narang faces a delicate balance, managing client loyalty while seeking revenue growth. 
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