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JFTC Approves Visa's Commitment Plan to Address Antitrust Concerns

Norbert Gehrke

10 Aug 2025 — 4 min read

The Japan Fair Trade Commission (JFTC) has announced its approval of a commitment plan submitted by Visa Worldwide. The plan resolves an investigation into Visa's business practices, which the JFTC suspected were in violation of Japan's Antimonopoly Act. This decision concludes the matter without a formal finding of violation, focusing instead on a swift restoration of fair competition in the credit card transaction processing market.

1. Background: The Visa Ecosystem in Japan

To understand the issue, it's essential to understand the players in a Visa card transaction:

Visa: The central entity that operates the payment network, licenses its brand, and sets the rules of the system.
Issuers: Companies (e.g., banks) that issue Visa-branded cards to consumers.
Acquirers: Companies that manage relationships with merchants, enabling them to accept Visa payments.
Transaction Processing Networks: These are the technical backbones that handle the authorization and settlement data flow between Acquirers and Issuers. While Visa provides its own network, other third-party providers also compete in this space.
Interchange Fee: A fee paid by the Acquirer to the Issuer for each transaction. Visa sets a standard schedule for these fees, which can vary by merchant category and other conditions.

A key feature of this system is that some credit card companies, for reasons of simplicity and efficiency, prefer to use a single transaction processing network for all their operations.

2. The Suspected Violation: A Change in "Preferential Rate" Conditions

The JFTC's investigation focused on a change Visa made to the conditions for qualifying for a preferential (lower) interchange fee rate in certain merchant categories.

The "Old" System

Previously, credit card companies could qualify for this preferential rate in one of two ways:

By submitting the final sales data to the Issuer within a certain number of days from the purchase date.
By submitting the final sales data to the Issuer within a certain number of days from the authorization date (the moment the card's validity is checked).

The Change (The "New" System)

In February 2018, Visa notified its partners of a change, which it implemented in November 2021. Visa eliminated the first option, unifying the condition for the preferential rate:

The only way to qualify was to submit sales data within a certain number of days from the authorization date.

The Anti-Competitive "Catch"

The critical issue, as identified by the JFTC, was that the official "authorization date" was determined by a "Transaction Identifier" that could only be generated by Visa's own proprietary transaction processing network.

This created the following anti-competitive effect:

If a credit card company used a third-party transaction processing network, it could not generate the necessary Visa-specific identifier.
Without this identifier, it was impossible to meet the condition for the preferential interchange fee rate.
To avoid this financial disadvantage, credit card companies (especially those that prefer using a single network) were effectively forced to use Visa's network instead of a competitor's.

The JFTC concluded that this practice likely constituted "Trading on Restrictive Terms" (an Unfair Trade Practice under Article 19 of the Antimonopoly Act), as it had the potential to exclude competing network providers from the market or reduce their business opportunities.

3. The Resolution: Visa's Commitment Plan

To resolve the JFTC's concerns, Visa submitted a "Commitment Plan," which the JFTC deemed sufficient and certain to be implemented. The plan includes the following measures:

Elimination of the Violation:
- Visa will immediately restore the old system. Both methods for qualifying for the preferential interchange rate (based on purchase date or authorization date) will be made available.
- Visa will ensure that the rates and conditions for both options are substantially equivalent, removing any incentive to favor one over the other.
Duration of the Remedy:
- This dual-option system will be maintained for a period of five years.
Corporate Governance:
- The decision to implement and maintain these remedies will be formally passed as a resolution by Visa's Board of Directors.
Notification and Training:
- Visa will notify all partner credit card companies of these changes.
- The changes will be thoroughly communicated to all relevant employees in Japan, particularly those involved with interchange fee management.
Compliance System Enhancement:
- Visa will create a formal code of conduct regarding compliance with the Antimonopoly Act for its interchange fee operations in Japan.
- It will conduct regular training for relevant employees and implement periodic audits by its legal department.
Third-Party Oversight and Reporting:
- A third-party monitor, approved by the JFTC, will be appointed to oversee the fulfillment of all commitment plan measures.
- This monitor will report on Visa's implementation progress directly to the JFTC. Visa will also submit its own annual reports to the JFTC for the five-year duration.

4. JFTC's Conclusion

The JFTC approved this plan because it provides a comprehensive and swift solution. It directly addresses the anti-competitive behavior, ensures the remedy is in place for a significant period, and establishes robust internal and external monitoring to guarantee compliance.

It is important to note that the approval of a commitment plan is a settlement procedure. It does not constitute a formal ruling by the JFTC that Visa violated the law. Rather, it is an administrative measure that resolves the investigation by securing a commitment from the company to proactively restore a competitive environment. Should Visa fail to adhere to the plan, the JFTC reserves the right to revoke its approval and resume the original investigation.