Visa and Mastercard face new class action suits over UK merchant fees

Visa and Mastercard are confronting new legal challenges in the United Kingdom over multilateral interchange fees charged to merchants.

On Friday the UK Competition Appeal Tribunal ruled that collective proceedings brought forward on behalf of retailers can proceed, Reuters reported.

The two global payment processors are already embroiled in several lawsuits in London over the fees that retailers must pay when consumers use a card for purchases.

The cases certified on Friday were initiated by Commercial and Interregional Card Claims, a special purpose vehicle, in 2022. They allege that merchants were overcharged and are owed damages.

While the Competition Appeal Tribunal had previously refused to certify the cases in June 2023, it has now given the green light. In its earlier ruling, the tribunal had stated that the proposed lawsuits could not proceed at the time, but allowed the lawyers to submit revised proposals.

Visa and Mastercard had argued that the other lawsuits they faced in the UK over multilateral interchange fees negated the need for Commercial and Interregional Card Claims' cases.

The companies and plaintiffs' lawyers claimed the deal would lower credit interchange rates and cap them for five years, while also giving merchants more choice in how they accept digital payments.

However, concerns were raised that while processing fees may decrease for merchants, consumers could face potential drawbacks, such as impacts on rewards programs and payment security.

In a recent development across the Atlantic, Mastercard and Visa reached a class action settlement with US merchants in March worth a collective $197 million for artificially inflating cash access fees. The settlement aimed to end 20 years of antitrust litigation around fees and restrictions placed on merchants.

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