Opinion ID: 6330404
Heading Depth: 2
Heading Rank: 2

Heading: Visa’s Alleged Anti-Competitive Actions

Text: In response to the Durbin Amendment, Visa made certain changes to its policies relevant here: PAVD, FANF, and volume-based agreements. First, Visa instituted its PAVD program. This requires issuers to enable Visa’s PAVD technology (i.e., Visa’s PINless system) on all Visa debit cards they issue. This guarantees that Visa can compete for PIN transactions on every Visa-branded card, even if the issuer has not enabled Interlink (Visa’s PIN network) on that card. Second, Visa instituted the “Fixed Acquirer Network Fee” (“FANF”). Instead of charging merchants only a per-transaction fee, Visa began charging them 6 a fixed monthly fee for using its debit networks. Merchants must pay this up-front fee so long as they accept payment from any Visa product during the month. Visa continued to charge per-transaction fees, but they were substantially reduced from previous levels. Given the incentives created by this new pricing structure and Visa’s market dominance, Pulse claims the FANF has these effects: (1) merchants can’t refuse to pay the fixed monthly fee because, realistically, they can’t stop accepting Visa cards, and (2) to recoup the fixed fee, merchants must route debit transactions through Visa’s networks, which charge lower pertransaction fees than do Visa’s rivals. Third, Visa entered various volume-based agreements with issuers and merchants. These agreements offer incentives to merchants to route a certain number of transactions each month over Visa’s networks. Similarly, Visa offers incentives to issuers—“rebates, discounts, and other incentives”—if certain numbers of transactions occur on Visa networks each month. 6 The up-front fee is actually charged to acquirers (merchants’ banks). But they pass the cost along to merchants. 5 Case: 18-20669 Document: 00516267971 Page: 6 Date Filed: 04/05/2022 No. 18-20669