Home Depot, a US-based home improvement retailer, has filed an antitrust lawsuit against Visa and MasterCard for colluding to prevent the implementation of chip and PIN technology to authorise a transaction.
Filed in the US District Court for the northern district of Georgia, the lawsuit accuses Visa and MasterCard for joining hands with the banks that issue debit and credit cards to avoid implementation of chip and PIN technology.
In the lawsuit, Home Depot alleged that the new payment cards with so-called "chip" technology, launched in the US in recent years, continue to be less secured than cards used in Europe and elsewhere in the world.
"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.
The banks charge higher merchant fees for signature-based credit-card transactions compared to PIN-based transactions. Hence, Visa, MasterCard, and their member banks have acted in concert to prevent the adoption of chip-and-PIN authentication in the US on a large scale.
"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," the lawsuit added.
Additionally, the case also accuses Visa and MasterCard, which set the interchange fees collected by banks, for engaged in price-fixing cartel that thwarts competition for merchant acceptance.