Visa and Mastercard Face Potential £5 Billion UK Lawsuit over Fees

Visa and Mastercard face a potential group lawsuit of about £5 billion in the United Kingdom. The allegation is that, by stifling competition, the two companies charged UK businesses excessive fees on customer card payments.

The law firms Harcus Parker and Hausfeld have lodged an application at the Competition Appeal Tribunal to pursue a group claim that would compensate companies which, they say, have been overcharged on customer card payments since October 2020.

The claim will centre on multilateral interchange fees, which are set by Visa and Mastercard and then paid by businesses through their banks every time a customer pays by card. The argument is that the lack of competition has left businesses at their mercy, and paying higher fees on debit, credit and prepaid cards as a result.

Sources close to the claim estimate it could be worth about £5 billion, based on the number of businesses allegedly overcharged between 2020 and 2026, seeking to claw back six years of fees as well as interest on those losses.

A spokesperson for Mastercard defended the interchange fees, saying the potential group claim was speculative and part of a growing trend of opportunistic, funder-backed litigation.

The case is being funded by Bench Walk Advisors, a London-headquartered firm launched in 2017 that makes money from backing lawsuits. It is being led by Stephen Allen, a British businessman and former travel sector executive who has been pursuing Visa and Mastercard through a number of group legal actions since 2021.

If the application is successful, an estimated 1 million UK-based businesses, organisations and charities with less than £100 million in revenues will be automatically included for compensation unless they opt out, with claims potentially worth several thousand pounds each. Larger businesses would have to actively opt in and could be due tens of millions over the claim period.

However, it could take years for the case to reach a conclusion. Visa and Mastercard last year agreed to pay a combined $167.5 million to settle a US class action that accused them of conspiring to keep ATM access fees artificially high; that lawsuit was originally filed in 2011.