Shares Fall

Shares of payments systems giant Visa (V) fell sharply Wednesday amid a Wall Street Journal report that the U.S. Justice Department is looking into the financial incentives Visa gave to Square, Stripe and PayPal.

Visa (V)'s stock price fell 6.9 percent to $215.78 per share Wednesday, down 1.35 percent from the start of 2021.

The fall was caused by reports that the U.S. Department of Justice is currently investigating whether the financial incentives Visa gave to Square (SQ), Stripe and PayPal (PYPL) were antitrust violations. The Wall Street Journal published this information, citing anonymous sources.

Payment systems such as Visa and Mastercard (MA) earn fees from merchants for using their vast payment processing network. Dynamic fintech companies Square, Stripe and PayPal, allow money to be sent without using Visa and other major card networks, representing the company's main competitors.

Visa has offered lower fees or other rewards to fintech firms, probably in exchange for them sending more transactions through its system.

Earlier in March, Visa made a statement that the Justice Department was examining its debit practices for antitrust violations. In the end, no charges were filed against the company.

The U.S. Justice Department had already investigated the credit card payments industry in 2010, resulting in a settlement with Visa and Mastercard for merchant concessions.

This is the second pessimistic news for Visa investors this week, since the company earlier Tuesday issued its financial forecast below the average expectations of market analysts. Visa's projected revenue growth for the first quarter of fiscal 2022 is well below the pace of the reported fourth quarter.

Over the past quarter, Visa posted earnings and revenue growth above Wall Street forecasts, noting a rebound in international travel. Wednesday's news of an expansion of Visa's promising installment feature failed to offset investor concerns about the Justice Department investigation.

Visa said a number of financial companies have joined its installment feature: "FIS, Moneris, Global Payments, ANZ, CIBC, HSBC, ScotiaBank and others are rolling out Visa's installment solution to their customers, increasing the scale, brand credibility and convenience of a popular financing option."