UK firms could seek £5bn from Visa and Mastercard over card fees
Law firms Harcus Parker and Hausfeld have applied to bring a group claim against Visa and Mastercard, alleging that the companies’ interchange fees have overcharged UK businesses and weakened competition. The proposed case could seek about £5bn in compensation, making it a potentially significant challenge to the fees charged when customers pay by card.
The claim covers fees dating from October 2020 and would include interest on alleged losses. If approved, around 1 million UK businesses, organisations and charities with revenues below £100m would be included automatically unless they opt out; larger firms would need to opt in. Mastercard calls the claim speculative and says interchange supports secure payments, while Visa says the fees benefit consumers, merchants and banks. The case could take years to conclude.
In short
- Law firms are seeking approval for a claim estimated at £5bn.
- The case concerns card fees charged to businesses since October 2020.
- About 1 million smaller organisations could be included automatically.
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The case for
Businesses bringing the claim can argue that interchange fees raise the cost of accepting card payments, with those costs ultimately borne by merchants and potentially passed on to customers. If the fees are excessive or weaken competition, a group claim could offer a practical way to seek compensation and strengthen pressure for fairer pricing.
The case against
Visa and Mastercard can argue that interchange fees help fund secure, reliable card payments and support the banks and services that make them possible. They may contend that the fees benefit merchants and consumers as well as banks, and that the allegations remain unproven; a large claim could risk disrupting a payment system on which businesses and customers rely.
Explained simply
When someone pays by card, the business accepting the payment usually pays a fee. Part of this is the interchange fee, which the customer’s bank receives from the business’s payment provider.
Visa and Mastercard operate major card networks, while banks issue cards and process payments for businesses. The proposed case argues that interchange fees have been too high and have limited competition; the companies say the fees help support the payment system and benefit those who use it.
The claim concerns fees charged since October 2020 and could affect many smaller UK businesses, charities and other organisations, with larger firms able to join separately. Its outcome could influence the cost of accepting card payments, but a legal case of this scale may take years.
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Originally published by The Guardian as “Visa and Mastercard threatened with potential £5bn UK lawsuit over interchange fees”.