Visa shares fell by 7% due to reports of an antitrust investigation
The price of Visa (V) shares fell by 6.9% to $215.78 per share on Wednesday – to 1.35% lower beginning of 2021.
Reported The reason for the drop is that the US Department of Justice is currently investigating whether the financial incentives that Visa provided to Square (SQ), Stripe, and PayPal (PYPL) were violations of antitrust laws.
The Wall Street Journal published this information, citing anonymous sources while saying that there is no data on whether the agency has reached any conclusions or is nearing the completion of the investigation. Visa has not yet commented on the WSJ article.
Payment systems such as Visa and Mastercard (MA) earn commission from merchants for using their extensive payment processing network.
Dynamically developing fintech companies Square, Stripe, and PayPal allows you to send money without using Visa and other large card networks, representing the company’s main competitors.
Visa has offered fintech firms lower fees or other rewards, probably in exchange for sending more transactions through its system.
Earlier in March, Visa stated that the Ministry of Justice had examined its debit practices for antitrust violations. As a result, no charges against the company.
In 2010, the US Department of Justice already investigated the credit card payment industry due to agreeing with Visa and Mastercard on concessions for sellers.
This is the second pessimistic news for Visa investors in a week, as earlier on Tuesday, the company published its financial forecast below the average expectations of market analysts.
Visa’s projected revenue growth in the first quarter of fiscal 2022 is significantly lower than the pace of the reporting 4th quarter.
Over the past quarter, Visa showed profit and revenue growth above Wall Street forecasts, noting the recovery of international travel.
Wednesday’s news about the expansion of Visa’s promising installment function failed to offset investors’ concerns about the Justice Department investigation.
