
Visa, Inc., Visa USA, Inc., and Visa International Service Association are best known for their worldwide VisaNet electronic payments network, which processes payments made with Visa-brand debit, credit, and prepaid cards. These cards are often accepted by retailers in other countries, so that many US consumers can buy goods in other countries and pay with their Visa cards. But the complaint for this class action alleges that the rates Visa charges for foreign exchange (FX) on these payments are unfair and not in good faith, and at times fictional.
The Nationwide Class is all persons or entities with Visa payment cards who made a transaction in a foreign currency using that card, within the applicable statute of limitations wherein the exchange rate imposed was not a government-mandated one. In the alternative, California, Washington, and Illinois Classes have been proposed.
Visa does not issue cards to consumers directly. It allows financial institutions to issue the cards, while it sets some of the rules for the cards and remains in the picture as the processor for the transactions. The banks or other financial institutions pass these rules on to their customers in Cardholder Agreements.
The complaint alleges that the Visa Rules and Cardholder Agreements tell cardholders “that the FX rates applied to foreign transactions will be either wholesale market rates or, in the jurisdictions that have them, government-mandated rates.” However, the complaint alleges that this is not true and that the rates “do not represent rates available in the wholesale FX market.”
That’s not all. The complaint claims that “even when the FX rates imposed by Visa are within the trading ranges of the individual currencies within the wholesale market for the applicable dates, the methods by which the rates are imposed are unfair, in bad faith, and therefore in violation of the Visa Rules and the Cardholder Agreements.”
Cardholders expect that the rates will bear some resemblance to the rates charged to Visa or the banks when they process the transactions. “In fact, however,” the complaint claims, “the banks and Visa rarely engage in wholesale market transactions to facilitate the cardholders’ transactions.” Instead, the complaint claims, Visa settles many of these transactions in US dollars, so that there is no currency exchange at all.
“Even in transactions that Visa actually settles in foreign currencies,” the complaint alleges, “the need for currency exchange is minimal. Visa is engaged in multilateral global transactions on a massive scale (i.e., doing multiple transactions in both directions—e.g., U.S. Dollars to Euros, and Euros to U.S. Dollars).” This means that Visa always has a large supply of various currencies, so that it only needs to exchange currencies to settle any net balances.
“In sum,” the complaint claims, “the FX rates [that] Visa imposes and that the banks charge cardholders for foreign transactions are largely a fiction and represent a non-transparent charge.”
Article Type: LawsuitTopic: Consumer
Most Recent Case Event
Visa Foreign Exchange Rates Imposed on Cardholders Complaint
July 9, 2021
Visa, Inc., Visa USA, Inc., and Visa International Service Association are best known for their worldwide VisaNet electronic payments network, which processes payments made with Visa-brand debit, credit, and prepaid cards. These cards are often accepted by retailers in other countries, so that many US consumers can buy goods in other countries and pay with their Visa cards. But the complaint for this class action alleges that the rates Visa charges for foreign exchange (FX) on these payments are unfair and not in good faith, and at times fictional.
Visa Foreign Exchange Rates Imposed on Cardholders ComplaintCase Event History
Visa Foreign Exchange Rates Imposed on Cardholders Complaint
July 9, 2021
Visa, Inc., Visa USA, Inc., and Visa International Service Association are best known for their worldwide VisaNet electronic payments network, which processes payments made with Visa-brand debit, credit, and prepaid cards. These cards are often accepted by retailers in other countries, so that many US consumers can buy goods in other countries and pay with their Visa cards. But the complaint for this class action alleges that the rates Visa charges for foreign exchange (FX) on these payments are unfair and not in good faith, and at times fictional.
Visa Foreign Exchange Rates Imposed on Cardholders Complaint