Visa faces a new lawsuit from U.S. merchants over its payments network, intensifying the legal challenges for the payment card giant.
Last week, the U.S. Justice Department filed a major antitrust lawsuit against the company.
On Tuesday, All Wrapped Up Signs and Graphix, an advertising and marketing company, filed a proposed class action in federal court in Manhattan. This marks the first private antitrust case following the Biden administration’s sweeping claims.
The merchants’ lawsuit accuses Visa, based in San Francisco, of paying potential rivals to avoid developing competing networks and threatening merchants with higher fees if they attempt to use other platforms for processing transactions. The lawsuit claims, “While merchants suffer, Visa profits.”
Visa has not yet responded to requests for comment but has denied the Justice Department’s allegations and committed to fighting the government’s case.
Dan McCuaig, an attorney representing All Wrapped Up from Cohen Milstein Sellers & Toll, expressed enthusiasm for representing businesses harmed by Visa’s alleged anticompetitive practices. When government cases target large companies, private lawsuits often follow, exposing them to higher damages.
All Wrapped Up, based in Florida, claims Visa’s uncompetitive practices have unfairly allowed it to dominate the debit card market. The company aims to represent a class of potentially hundreds of thousands of businesses, both small and large.
The lawsuit alleges that Visa charges over $7 billion in fees annually to merchants for processing debit transactions. Cohen Milstein, the law firm representing All Wrapped Up, has previously represented gasoline retailers in Brooklyn federal court, accusing Visa and Mastercard of imposing artificially high credit card interchange, or “swipe,” fees.
The case, All Wrapped Up Signs and Graphix v. Visa, has been filed in the U.S. District Court for the Southern District of New York under case number 1:24-cv-07435.
