The Australian Competition and Consumer Commission (ACCC) has formally commenced Federal Court proceedings against Visa Inc, alleging a series of contraventions of the Competition and Consumer Act 2010 in relation to dynamic currency conversion services (DCC).

The ACCC has accused Visa of misusing its market power for the purposes of:

  • preventing the expansion of DCC to new merchant outlets in Australia, such as retail stores; and
  • preventing businesses in Australia from supplying DCC services on ATMs in competition with Visa’s own currency conversion service. 

The ACCC alleges that Visa earned less revenue when a cardholder selected DCC than when a cardholder used Visa’s own currency conversion service. 

“The ACCC is concerned that Visa sought to stop the growth of competing dynamic currency conversion services and, as a result, limit the choices available to consumers,” ACCC Chairman Rod Sims said.

DCC gives international cardholders the choice of completing a transaction in their home currency or in the local currency of the retail store or ATM.  If a cardholder chooses DCC, the exchange rate is locked in and disclosed to the cardholder at the time of making a transaction. This provides cardholders with certainty about the exchange rate applied and reduces the risk to cardholders from subsequent changes in exchange rates.  

“The alleged conduct by Visa gives rise to three concerns for the ACCC.  First, it is alleged that travellers to Australia using a Visa payment card do not get to choose who does their currency conversion when withdrawing cash from an ATM.  In particular, they are denied the ability to know the cost of transactions in their own currency at the time the transaction is made,” Mr Simms said.