Recently there was a UK Watchdog inquiry on the possible infractions by Visa and MasterCard. Colombia’s Superintendence of Industry and Commerce is taking a similar route with a preemptive strike at Visa and MasterCard. The Superintendence is taking this decision due to a complaint one of the Local Withholding Agents (LCA) filed. The LCA are agents with local offices in Colombia, and they provide cheaper alternative means of making cross-border payments.
According to the complaint, the two payment giants, Visa and MasterCard, are doing underhanded things to frustrate payment using the LCA. These underhanded acts cover writing banks in the South American axis that processing LCA payments offend their terms of trade. Also, Visa and MasterCard inform banks in the South American axis to process LCA payments using their platform, which increases cost.
With Visa and MasterCard programs coming to Colombia, the Superintendence has slammed precautionary measures on them. Visa and MasterCard can’t make rules or programs restricting LCA agent activities. Also, they can’t prevent other entities from dealing with LCA agents.