Visa Under Investigation by DoJ Over Tokenization Technology Pricing
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Visa Under Investigation by DoJ Over Tokenization Technology Pricing

The US Department of Justice is investigating Visa’s policies regarding the higher fees charged to retailers for not utilizing its proprietary tokenization technology, as reported by Bloomberg.

This investigation follows the DoJ’s antitrust division’s inquiry that began over two years ago into whether Visa has limited merchants’ ability to transmit debit transactions through more affordable networks. Recently, the Justice Department also concluded a separate tokenization case involving Visa’s competitor, Mastercard.

Tokenization, a concept introduced by Visa nine years ago, aims to enhance the security of cardholder information by substituting the 16-digit account number with a unique token that only Visa can decrypt. The company incentivizes merchants to adopt this technology by offering them lower fees. According to Bloomberg, starting in April, firms that process recurring payments will incur $1.38 in card fees for every $100 in transactions made on a traditional Visa card. In contrast, those using the tokenization technology will be charged only $1.28.