irst Data Corp. has filed a counter lawsuit against Visa alleging "anti-competitive and monopolistic practices that limit competition, innovation and choice in the payments industry."

In April 2002, Visa filed suit against First Data, attempting to block First Data's increase in intra-processing volume - processing credit card transactions through First Data's network rather than through Visa's VisaNet processing system ("Processing Fight Gets Nasty: Visa Sues First Data," The Green Sheet, May 13, 2002, issue 02:05:01, and "Heavyweight on Ropes: Visa Could Get Black Eye," The Green Sheet, June 10, 2002, issue 02:06:01).

Visa requires that Visa card payments pass through the VisaNet system upon authorization and settlement to ensure reliability and quality of the Visa brand.

Visa's Board of Directors voted in August to officially ban the processing of any "private arrangements," which are arrangements to provide efficient connections to authorize or clear and settle transactions outside VisaNet.

Visa has processed private arrangements for many years, and First Data claims Visa changed its rules on allowing these types of transactions because it wants to prevent any competition from First Data.

"The suit that Visa filed against First Data in April 2002, and Visa's subsequent decision to completely ban all private arrangements, are efforts to stifle a competitive challenge - not to protect the payment system, as Visa alleges," Eula L. Adams, Senior Executive Vice President of First Data, said in a statement.

"First Data's effort to defend against this suit is an effort to allow competition in the marketplace that leads to innovation and broader choices for everyone. We feel strongly that in order to challenge the status quo and move the industry forward, we cannot accept Visa's anti-competitive and monopolistic actions."

Visa has not immediately issued a statement in response to First Data's lawsuit at press time.