Monday 7 September 2020 1:39 pm

Visa falls under scrutiny in Europe over fintech rules

Visa is at the centre of a probe by the European Commission over its digital payments rules for fintech firms, following allegations of anti-competitive behaviour.

The payments giant said in its most recent quarterly filing that the EU’s executive arm had opened a preliminary investigation into its rules at the end of June, asking Visa for information about its terms for staged digital wallets.

Visa said it was cooperating with the European Commission’s investigation.

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The probe stems from allegations that fintech firms are pushing the boundaries of EU rules to offer high-speed payments, making it harder for Visa to safeguard against money laundering and fraud, industry insiders told the Times today.

Visa and others such as Mastercard grant licences to companies operating digital wallets, such as Apple Pay and Google Pay, provided that those companies comply with its rules on anti-money laundering checks.

Some smaller firms, including Australian electronic money (e-money) firm iSignthis, have accused Visa of trying to smother rivals by restricting their access to data.

Read more: EU banks take on Visa and Mastercard with ‘truly European’ payments system

Its chief executive John Karantzis accused Visa of being a “corporate bully” that had “taken part in anti-competitive exclusionary conduct against competitors a fraction of its size”, the Times reported.

A Visa spokesperson said: “We are working with a wide variety of fintechs and start-ups to provide them open access to our global network.

“We welcome new solutions and new ways for people to make electronic payments and for merchants to accept them, subject always to delivering the security and convenience that our customers expect from Visa.”

The European Commission’s investigation follows in the wake of the collapse of Wirecard, a German payments company that was shut down after a major fraud scandal.