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The Australian Competition and Consumer Commission (ACCC) is taking Visa to court, alleging that the credit card company has intentionally and effectively prevented the expansion of Dynamic Currency Conversion (DCC) services throughout the Australian retail industry. Visa has confirmed that it will vigorously defend allegations that it has “misused its market power.”
Dynamic Currency Conversion is a system available to foreign travelers whereby they may opt to know the amount of their purchase in their own currency at point of sale. Prior to the institution of DCC, the conversion would take place at the point of processing and would appear on the consumer’s monthly Visa statement. Choosing the point of sale option, the conversion is shown on the merchant’s receipt.
Rod Sims, Chairman of the ACCC said that the agency has three concerns:
- Travelers do not get to choose who does their currency conversion.
- Visa provides new merchants no choice of conversion services by bundling it as a part of Visa’s own service package.
- Travelers using their Visa at ATM’s are limited to Visa’s conversion service, thus depriving other services of the opportunity to compete.
By the way, Paula Gilardoni, a partner in competition and regulation at Gilbert and Tobin, noted that two significant insights into the ACCC action:
- The case is consistent with Rod Sims’ desire to go after bigger targets, i.e., deeper pockets equal bigger fines.
- Visa’s rules in Australia are commonly used around the world, not only by Visa, but by other major bank cards.
Here is my question. Does the traveling customer give a rat’s petoot? I’m a consumer. I travel internationally. What do I care about whether I get my conversion at point of sale or at processing? Frankly, it makes no difference to me. I can read my monthly Visa statement quite easily enough with Visa handling the conversion. Now as to the allegations that Mr. Sims and his ACCC are bringing against Visa, we have a word for that. Balderdash. I would allege, without prejudice, that Mr. Sims is a regulator gone rogue, looking for a way to make a name for himself by potentially raking in fines for common practices that probably not illegal. Visa existed long before the competitive DCC systems. All that Visa is doing is protecting a system that it has already had in place. What is wrong with Visa approaching a potential new business with their entire package of credit card services? It’s the merchant’s choice, and, unless the merchant is a major player with enormous sales volume, the charge for the service is but a pittance for the merchant. McDonald’s might be interested, but Ian’s Fish and Chips would not.
BUT, if Mr. Sims is able to catch the rabbit somewhere down the hole, he will open the doors for a worldwide attempt to strangle credit card companies. He will cause systems to become unnecessarily complicated and he will have made a mountain out of a molehill.
