US DOJ Is Probing Visa over 'Token' Technology Pricing Practices: Report

<p> The United States’ law
enforcement agency is
investigating payment processing giant, Visa, over practices related to its
tokenization technology, Bloomberg reported today (Wednesday), citing anonymous
sources. Specifically, the probe is reportedly related to the company’s
practice of charging merchants more when they do not
deploy its technology for protecting
cardholder information.</p><p>Visa Faces
New DOJ Investigation </p><p><a href="https://www.financemagnates.com/terms/t/tokenization/">Tokenization</a>
is a security technology that substitutes sensitive data such as account
numbers with a special, one-time-use set of numbers known as a ‘token’.
The technique helps to
boost protection against data leaks and other security threats by ensuring that
actual payment data are not stored on a merchant's systems.</p><p>The latest
probe into Visa’s tokenization technology, which was introduced in 2014, comes
less than a year after the Federal Trade Commission ordered the payment processor’s
rival, Mastercard, to start sharing customer account details with competing
networks so that they can process their customer’s payment orders.</p><p>However,
unlike Mastercard, Visa has been granting access to that information to rival networks for
years, according to an insider source quoted by Bloomberg However, this service attracts a higher fee compared to what the firm charges when its technology is adopted for such purpose. </p><p>Meanwhile,
Visa has been making plans to implement its regular fee adjustment schedule. The
<a href="https://www.financemagnates.com/terms/p/payments/">payments</a> company and its partners informed customers of these upcoming changes,
according to a document seen by Bloomberg. However, insider sources believe the
planned move renewed the DOJ’s interest in Visa’s tokenization technology
policy.</p><p>Regulatory Case in the UK</p><p>Meanwhile,
Visa and Mastercard last year <a href="https://www.financemagnates.com/fintech/payments/uk-regulator-to-launch-review-on-visa-and-mastercard-fees/" target="_blank" rel="follow">also attracted the attention</a> of the Payment
Systems Regulator (PRS), the regulatory authority for the payments industry in
the United Kingdom where both companies command about 99% of the debit and
credit payments market. The watchdog sought a pair of market reviews on the
rising card fees charged by the rival companies, <a href="https://www.financemagnates.com/" target="_blank" rel="follow">Finance Magnates</a> reported. </p><p>“Cards are
the most popular way for consumers to make a payment. To accept card payments,
merchants must pay certain fees which can ultimately impact the cost we all pay
for goods and services,” Natalie Timan, the Head of Strategy at PSR, explained
at the time. “We want to understand whether card payments are working well and
to make sure that merchants, and ultimately consumers, get a good deal.”</p><p>eToro partners with Reflexivity; BaFin exposes Fortex clone; <a href="https://www.financemagnates.com/forex/news-nuggets-16-august-etoro-partners-with-reflexivity-bafin-exposes-fortex-clone/" target="_blank" rel="follow">read today's news nuggets</a>.</p>

This article was written by Solomon Oladipupo at www.financemagnates.com.