Visa and Mastercard face potential £5bn claim over UK card fees

Law firms Harcus Parker and Hausfeld have applied to the Competition Appeal Tribunal to pursue compensation for companies they say have been overcharged since October 2020.

The claim concerns multilateral interchange fees, set by the card networks and paid by businesses through their banks whenever customers make card payments. The lawyers argue that limited competition has allowed the companies to charge excessive fees on debit, credit and prepaid cards.

The proposed claim would seek to recover fees charged over the past six years, plus interest. Sources close to the case estimate its value at about £5bn, based on the number of businesses allegedly affected between 2020 and 2026.

If approved, around 1m UK businesses, organisations and charities with revenues below £100m would be included automatically unless they opted out. Larger businesses would need to opt in and could be entitled to tens of millions of pounds.

The litigation is funded by Bench Walk Advisors and led by Stephen Allen, a former travel industry executive who has pursued group actions against Visa and Mastercard since 2021.

The case could take years to conclude. Last year, the companies agreed to pay a combined $167.5m (£124m) to settle a US class action alleging they conspired to keep cashpoint access fees artificially high. That case was filed in 2011.

Mastercard said: “We strongly disagree with the basis of this claim. Interchange plays a vital role in supporting the UK payments ecosystem … This speculative claim does nothing to support UK businesses or consumers and instead reflects the growing trend of opportunistic funder-backed litigation.”

Visa said: “Visa continues to believe that interchange is a critical component to maintaining a secure digital payments ecosystem that benefits all parties, including consumers, merchants and banks.”