- Depansum, a provider of e-commerce payment processing solutions for offshore merchants, accuses Visa of violating the Competition Act by prohibiting Nedbank from processing transactions using its systems.
- Visa disputes this and claims Depansum’s local collecting agent activities for foreign merchants in South Africa contravene local exchange control laws while arguing that enforcing its rules is not anti-competitive.
- The Competition Tribunal has granted Depansum interim relief for six months, saying Visa can't prohibit Nedbank from using Depansum's systems by threatening to terminate its card network services to the bank.
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The Competition Tribunal has granted interim relief to Depansum, a provider of e-commerce payment processing solutions in South Africa for offshore merchants, after it lodged a complaint against Visa that involved the multinational card payment provider barring Nedbank from processing transactions using its systems.
The Competition Tribunal heard Depansum's interim relief application on 14 December 2023, which was brought by against Visa Inc. and its sub-Saharan African subsidiary. Though Nedbank was cited as an interested party in the interim relief application, Depansum sought no relief against the lender.
The tribunal announced on Monday that the result of this relief application is that Visa cannot prohibit Nedbank from processing transactions for Depansum as its acquiring bank or seek to induce Nedbank not to process transactions for Depansum on the basis that merchants, which ultimately receive the payment made in transactions using its systems are not based in South Africa.
The interim relief order means that for a period of six months - or until the tribunal can conclude its full hearing into Depansum's complaint - Visa is "interdicted and restrained" from barring Nedbank from using Depansum's systems. The interdict also prohibits Visa from levying fines on Nedbank or threatening termination of its card network services to the bank.
Depansum had alleged that Visa and its sub-Saharan subsidiary had used its rules, which it imposes on banks using its multinational card payment and electronic fund transfers (EFT) systems, to prohibit them from using its payment system. It argued this constituted abuse of market dominance in contravention of the Competition Act.
Visa disputed the allegations and opposed Depansum’s interim relief application, alleging in the process that Depansum’s local collecting agent activities for foreign merchants in South Africa contravene the country’s exchange control laws. Visa argued that it was not prepared to permit its payment network to be associated with such allegedly unlawful conduct.
In addition, Visa argued that Depansum failed to demonstrate that Visa’s enforcement of its rules was anti-competitive or that it had any anti-competitive effects. The Competition Commission is still investigating Depansum’s complaint of an alleged abuse of dominance by Visa.
The Competition Commission is the body that investigates complaints of anti-competitive behaviour and then subsequently refers them to the tribunal for prosecution should it be warranted.