Visa Inc. has acknowledged the European Commission (EC) has opened an investigation into the company’s eWallet rules.
In its second-quarter filing with the Securities and Exchange Commission (SEC), the global financial services corporation reported the executive branch of the European Union (EU) informed Visa that it has opened a preliminary investigation into its digital wallet rules and requested information about them.
“Visa is cooperating with the EC,” Visa wrote in the filing.
The investigation stems from Visa’s introduction of fees for staged digital wallets implemented three years ago following Mastercard’s move to add the charges in 2013. The fees could result in higher costs for small businesses.
Until the fees were added, businesses that accepted a digital wallet payment, such as Google Wallet and PayPal, were charged the same rates as they would be for accepting a physical credit card.
But Visa changed its rules for certain digital wallets, called “staged” digital wallets.
Starting in April 2017, Visa said it would charge 10 cents for these transactions. That’s on top of the standard interchange rates that are typically 2.95 percent and 10 cents per transaction.
Visa’s SEC filing also reported that since the summer of 2013 more than 500 merchants have filed suit against its subsidiaries in the United Kingdom (U.K.), Germany, Belgium and Poland over interchange rates and other fees.
Since then, about 100 retailers have settled, some 400 merchants have outstanding claims and an additional 30 have threatened to commence similar proceedings, Visa reported.
The filing also noted that in June the Supreme Court of the U.K. found Visa’s domestic interchange restricted competition. The case will now continue before the U.K. Competition Appeals Tribunal to determine the lawful level of interchange and the amount the plaintiff should be paid.
In its September issue of How We Shop, PYMNTS, in cooperation with PayPal, reported U.S. consumers have migrated to digital shopping channels from brick-and-mortar stores and many have no intention of returning.
The survey of more than 16,000 consumers found it is increasingly less likely consumers will revert to their pre-pandemic lifestyles as the pandemic continues, and the digital shift will become stronger and more permanent.
With the exception of dining in restaurants, merchants looking to succeed in the digital-first environment must provide services and payment features that facilitate the digital shopping experiences customers demand.
Selected by Fintech Tube