Visa and Mastercard face a collective compensation claim in the UK over alleged anti-competitive practices and card payment fees.
Law firms Harcus Parker and Hausfeld have filed an application with the UK Competition Appeal Tribunal to pursue a collective action against the card networks.
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According to a report by The Guardian, the claim could be worth around £5bn. It would seek compensation for UK businesses that were allegedly overcharged when customers paid by card from October 2020.
The litigation targets multilateral interchange fees (MIFs), which businesses pay via their banks whenever a customer uses a card. MIFs form part of a business’s merchant service charge (MSC).
The application alleges that limited competition in the market led businesses to bear higher card payment processing costs.
The legal action aims to recover interchange fees collected over a six-year duration, alongside accrued interest.
If the tribunal approves the collective proceedings order, roughly one million businesses with annual revenues under £100m will be enrolled automatically on an opt-out basis.
Enterprises with annual turnover above £100m must actively choose to opt in to join the action.
“Businesses that are currently bringing claims before Visa and/or Mastercard, and those whose claims have been extinguished by prior settlements, will not be able to participate in these collective proceedings,” a statement said.
Bench Walk Advisors, a London-based litigation funder, is underwriting the legal costs. The initiative is fronted by Stephen Allen, a British business executive who has initiated multiple group claims against Visa and Mastercard since 2021, The Guardian reported.
Allen said: “Every business that takes cards pays these fees, from a corner shop to a national chain. In previous cases, the Tribunal has found that these fees were unlawful, and that in almost all instances it is businesses, rather than consumers, who have suffered the losses arising from Visa’s and Mastercard’s MIFs.
“This claim finally gives UK businesses a chance to recover what we say they were overcharged.”
The lawsuit follows a regulatory setback for the card schemes. The High Court in London backed the UK Payment Systems Regulator’s power earlier this year to cap cross‑border interchange fees, dismissing a challenge by Mastercard, Visa, and Revolut.
