Visa, the credit card giant, is under fresh legal fire as a new class action lawsuit from U.S. merchants has landed in a Manhattan federal court. This latest suit, brought by Florida-based advertising company All Wrapped Up Signs and Graphix, echoes allegations from the U.S. Department of Justice’s recent antitrust case against Visa, accusing the company of stifling competition and squeezing merchants with excessive fees.
The merchant lawsuit claims that Visa pays potential competitors to avoid building rival payment networks and pressures merchants into using its services by threatening higher transaction fees. These practices, the suit argues, enable Visa to maintain a stranglehold on the debit card market, raking in billions in fees each year.
Filed just days after the Justice Department’s lawsuit, this marks the first private case to ride the wave of antitrust scrutiny against Visa. According to All Wrapped Up, Visa’s actions have harmed potentially hundreds of thousands of businesses—small and large alike—by inflating the costs of processing debit transactions.
With Visa charging over $7 billion in fees to merchants annually, this legal battle could pave the way for a cascade of private litigation. The legal firm behind the suit, Cohen Milstein Sellers & Toll, is no stranger to taking on Visa, having previously represented gasoline retailers in similar cases accusing the company of hiking credit card interchange fees.
Visa has yet to comment on this latest case, though it has publicly denied the Justice Department’s claims and vowed to defend itself vigorously. As the antitrust storm gathers force, Visa’s grip on the debit card market could face serious cracks.
The case is All Wrapped Up Signs and Graphix v. Visa, filed in the U.S. District Court for the Southern District of New York.
