Visa and Mastercard Face Possible £5bn UK Claim Over Fees
Two law firms have applied to bring a group claim for UK businesses over card interchange fees charged since October 2020. Mastercard calls it speculative, and Visa defends the fees.
Visa and Mastercard are facing a potential £5bn lawsuit in the UK. The claim alleges that they stifled competition and charged businesses excessive fees.
The law firms Harcus Parker and Hausfeld have lodged an application at the Competition Appeal Tribunal for permission to pursue a group claim. It would seek compensation for companies that, they say, were overcharged on customer card payments since October 2020.
The claim centres on multilateral interchange fees. Visa and Mastercard set these, and businesses pay them through their banks each time a customer pays by card. The argument is that a lack of competition left businesses at the mercy of the card schemes and paying higher fees on debit, credit and prepaid cards. The case would try to recover fees from the past six years, plus interest. Sources close to the claim put its possible value at about £5bn, based on the number of businesses allegedly overcharged between 2020 and 2026.
Who would be covered
If the application succeeds, an estimated 1m UK-based businesses, organisations and charities with revenues under £100m would be included automatically unless they opt out. Their claims could be worth several thousand pounds each. Larger businesses would have to opt in, and could be owed tens of millions of pounds over the period.
Bench Walk Advisors, a London firm founded in 2017 that makes money by backing lawsuits, is funding the case. It is led by Stephen Allen, a British businessman and former travel executive who has pursued Visa and Mastercard through several group actions since 2021. The case could take years to conclude.
Mastercard called the potential claim "speculative" and part of a "growing trend of opportunistic funder-backed litigation". Its spokesperson said the company strongly disagrees with the basis of the claim and that interchange plays a vital role in the UK payments system. The spokesperson added that the claim is the kind the government's proposed opt-out class action reforms are meant to prevent. A Visa spokesperson said interchange is a critical component of a secure digital payments ecosystem that benefits consumers, merchants and banks.
Last year Visa and Mastercard agreed to pay a combined $167.5m to settle a US class action alleging they conspired to keep ATM access fees artificially high. That suit was first filed in 2011.
Source: The Guardian