UK firms seek £5bn over card fees

Law firms Harcus Parker and Hausfeld have filed an application with the Competition Appeal Tribunal to pursue a £5bn group claim against Visa and Mastercard.

The legal action alleges that the two payment networks stifled competition, resulting in excessive fees for UK businesses processing customer card payments. The claim covers transactions made between October 2020 and 2026.

The case centers on multilateral interchange fees, which are set by the networks and passed on to merchants through their banks. The plaintiffs argue that a lack of competition in this market allowed the companies to charge higher rates on debit, credit, and prepaid cards. The estimated value of the claim includes the fees charged over the six-year period plus interest on those losses.

Stephen Allen, a former travel sector executive who has pursued legal action against the networks since 2021, leads the effort. The lawsuit is funded by Bench Walk Advisors, a London-based firm established in 2017 that specializes in backing litigation. If the tribunal accepts the application, an estimated one million UK organizations with revenues below £100m will be automatically included in the claim unless they opt out. Larger businesses must actively opt in and could potentially recover tens of millions of pounds.

Mastercard responded to the filing by calling the claim speculative. A spokesperson said the action reflects a growing trend of opportunistic, funder-backed litigation. The company stated that it strongly disagrees with the basis of the claim and argued that interchange fees support the UK payments ecosystem by ensuring secure and quick transactions. Mastercard also noted that the proposed opt-out class action reforms recently consulted on by the UK government are designed to prevent such claims.

A Visa spokesperson stated that the company believes interchange is a critical component of a secure digital payments ecosystem. The network said the system benefits all parties, including consumers, merchants, and banks. The firms face this new claim after agreeing last year to pay a combined $167.5m to settle a separate US class action. That previous lawsuit, originally filed in 2011, accused the companies of conspiring to keep ATM access fees artificially high.