Are Visa and MasterCard Anticompetitive?
Visa and MasterCard move parallel in the market for all-purpose or general purpose card network services. General function cards are consisting of charge card, credit cards which would help us to purchase the goods and services without immediately accessing or reserving funds. In 1997, business volume on these two networks went beyond the level of $600 billion. Throughout their general control of both Visa and MasterCard, the biggest banks might have muffled contest between these two networks and might have dissatisfied competition from minor competitor networks. Visa and MasterCard’s only imperative rivals are the American Express and Discover or Novus networks, and these rivals entry into the network business is tremendously not easy. This likely cutback in opposition among general purpose card networks might have delayed the growth and achievement of enhanced network products and services, and might have lessened consumer option.
There are more than a few instances in which the directing banks look like to have controlled dangerous competitive proposals developed by the managements of Visa and MasterCard. In the mid-1980s, Visa and MasterCard had lengthened its activity into travel and entertainment while the American Express had prolonged its activity interested in the retail sector and the Sears had entered the network market with the Discover network. These changes brought the bank prohibited Visa and MasterCard networks into straight competition with American Express and Discover or Novus.
In the last few years, American Express and Discover or Novus have tired to increase their networks by compelling other units, together with banks, to issue cards on their networks. In the country, those works have been thwarted by Visa and MasterCard regulations that rule out all associate banks from issuing cards on the American Express. Visa adopted Bylaw 2.10(e) to stop the growth of the American Express and Discover...