Visa, Mastercard hit with £5bn UK fee claims

Visa and Mastercard are facing proposed collective legal actions in the United Kingdom seeking as much as £5bn in compensation over card payment fees charged to businesses. Applications have been filed with the UK Competition Appeal Tribunal on behalf of companies, organisations and charities that allegedly overpaid multilateral interchange fees on consumer debit, credit and prepaid card transactions from October 2020 onward. The claims aim to recover interchange fees charged over a six‑year period, along with interest on those amounts.

The potential £5bn figure is reportedly based on fees charged between 2020 and 2026.

The applications have been brought by law firms Harcus Parker and Hausfeld, which are seeking authorization to proceed as collective actions under the UK’s competition law regime. The proposed class covers businesses that accepted card payments and paid the challenged interchange fees through their acquiring banks. If the Competition Appeal Tribunal grants a collective proceedings order, approximately one million UK businesses, organisations and charities with annual revenues below £100m would be included on an opt‑out basis unless they actively choose to withdraw.

Larger enterprises with annual turnover above £100m would not be enrolled automatically and would need to opt in if they wish to pursue compensation, potentially for amounts reaching into the tens of millions of pounds. Businesses that are already bringing individual claims against Visa or Mastercard, or whose claims have been extinguished by prior settlements, would not be able to participate in these particular collective proceedings.

The litigation is funded by Bench Walk Advisors, a London‑based litigation funder that is underwriting the costs of the actions. The initiative is being led by Stephen Allen, a British business executive and former travel sector manager, who has pursued multiple group claims against Visa and Mastercard over interchange fees since 2021.

At the centre of the dispute are multilateral interchange fees, which are set within Visa and Mastercard’s payment systems and paid by merchants through their banks whenever customers use payment cards. These fees form a significant part of the merchant service charge that businesses incur when accepting debit, credit and prepaid card payments. The claimants argue that a lack of effective competition has allowed the card schemes to maintain interchange fees at unlawfully high levels.

The applications contend that limited competitive pressure left businesses exposed to higher card payment processing costs than they would have faced in a more competitive market. The claimants say that in previous cases, the tribunal has found certain interchange fees to be unlawful and that, in most instances, it is businesses rather than consumers that have borne the associated losses. The current proposed claims seek to provide UK businesses with a route to recover what is alleged to be overcharging on these fees.

Visa and Mastercard both reject the allegations underpinning the new claims and defend the role of interchange fees in the payments ecosystem. Mastercard has described the proposed group claim as speculative and part of a growing trend of opportunistic, funder‑backed litigation, arguing that it does not support UK businesses or consumers. The company maintains that interchange fees are essential to the operation of a secure and efficient payment system in the UK.

Visa has similarly stated that interchange remains a critical component in maintaining a secure digital payments environment that benefits consumers, merchants and banks. The new UK actions add to ongoing legal scrutiny of card fee structures, including earlier litigation over cross‑border interchange fees and long‑running debates about whether such arrangements breach competition law and how any resulting losses should be allocated. The Competition Appeal Tribunal must now decide whether the latest proposed collective proceedings can move forward, and the process is expected to take years before any final outcome is reached.