ATLANTA—Home Depot has filed an antitrust lawsuit in federal court against Visa and MasterCard.
The suit rekindles claims from a decade ago that merchants pay too much for debit and credit card transactions and adds new allegations regarding the effectiveness of chip-based cards to reduce fraud.
Among the lawsuit’s complaints, Home Depot alleges that Visa and MasterCard sought to block the adoption of chip-and-PIN on credit card transactions following the migration to EMV payment security standards last October. Additionally, the retailer argues that chip-and-signature is simply less secure than its chip-and-PIN counterpart, zdnet.com reported.
"Visa and MasterCard know perfectly well that a signature alone, without the additional step of requiring a PIN, provides virtually no protection against many types of payment card fraud," Home Depot said in the lawsuit filed Monday in U.S. District Court for the northern district of Georgia.
Home Depot alleges that the payments network giants backed the less-secure chip-and-signature standard because the networks collect higher merchant fees for routing signature-based card transactions as opposed to PIN.
According to data compiled by the U.S. Federal Reserve, transactions routed over Visa's or MasterCard's signature debit networks cost more than twice as much as transactions routed over PIN networks, zdnet.com reported.
"While chip-and-PIN authentication is proven to be more secure, it is less profitable for Visa, MasterCard, and their member banks and it provides a greater threat to their market dominance," Home Depot claimed in the lawsuit, according to zdnet.com. "For years, Visa and MasterCard have been more concerned with protecting their own inflated profits and their dominant market positions than with the security of payment cards used by American consumers and the health of the United States economy."