Visa Faces ACCC Probe on Currency Conversion

The Australian Competition and Consumer Commission has alleged that Visa is limiting the availability of “dynamic currency conversion” in the country.

Dynamic currency conversion gives the option for credit card holders to convert their purchases into their home currency before they complete the transaction. Although conversion can be expensive if the customer pays in Australian dollars, the ACCC said the arrangement is more transparent for credit card holders.

The ACCC added that it allows a lock on the conversation rate at the time of the transaction. Banks and merchants also have the opportunity to offer more competitive rates.

Visa, meanwhile, has rejected the ACCC’s allegations. Zoe Hibbert, Visa spokeswoman, also said that the company would defend itself if ACCC pursues legal actions.

Hibbert added that Visa will cooperate with the ACCC’s investigation but reiterated that it rejects all the allegations on the dynamic currency conversion.

She also explained that Visa allows dynamic currency conversion at point of sale but not at automatic tellers.

Industry analysts laud the action of the ACCC and consider it a significant move to regulate the payment systems in the country. Many believe that the ACCC’s move is consistent with Rod Sim’s goal of going after bigger targets.

Paula Gilardoni, a partner at Gilbert and Tobin, said that if Visa loses the case against the ACCC, other countries are likely to go after it, as well, because Visa’s rules are consistently used globally.