The Competition Appeal Tribunal in London has ruled that the default multilateral interchange fees (MIFs) imposed by Visa and Mastercard contravene UK and Irish competition law.
This decision arises from linked lawsuits initiated by numerous merchants challenging the legality of these fees.
The tribunal’s unanimous ruling represents the first occasion on which Visa and Mastercard’s commercial card and inter-regional MIFs have been deemed to infringe competition regulations.
In response, both companies have stated their disagreement and seeks permission to appeal, reported Reuters.
A Visa spokesperson told Reuters 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.”
Mastercard spokesperson stated: “Mastercard strongly disagrees with today’s decision, which is deeply flawed, and will seek permission to appeal.”
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By GlobalDataThe litigation concerning MIFs, which are charged to retailers during card transactions, has persisted for over a decade in the UK and internationally.
The case was represented by Scott+Scott law firm global managing partner David Scott.
The ruling asserts the MIFs establish a non-negotiable minimum for the Merchant Service Charges that merchants are required to pay to banks for processing card payments.
Scott said: “Today’s judgment is a significant win for all merchants who have been paying excessive interchange fees to Visa and Mastercard.”
This ruling is the first of three trials addressing the issue of interchange fees.
A subsequent judgment regarding the question of pass-on—specifically whether any alleged overcharges are transferred from merchants to consumers—is anticipated later this year.
Furthermore, Scott+Scott is also contesting the imposition of ‘scheme fees’ by Visa and Mastercard, which will be addressed in a future trial.
In March, the UK payments regulator accused Visa and Mastercard of imposing excessive fees that restrict competition.
