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Visa and Mastercard are now facing fresh legal challenges over multilateral interchange fees following a recent decision by the United Kingdom Competition Appeal Tribunal.
On Friday (June 7), the Tribunal ruled that collective proceedings—akin to class action lawsuits in the United States—filed on behalf of merchants could move forward, according to a report by Reuters.
Both global payment processors have already been involved in multiple lawsuits in London regarding the fees retailers are charged when consumers use credit or debit cards for purchases.
The newly certified cases were initiated by Commercial and Interregional Card Claims, a special purpose vehicle, in 2022. These lawsuits claim that merchants were overcharged and are seeking damages.
The Tribunal had initially refused to certify these cases in June 2023, but reversed that decision on Friday, allowing the proceedings to continue.
In their June 2023 ruling, the Tribunal had concluded that the proposed lawsuits could not advance at that time, though they allowed for the possibility of revised proposals from the lawyers.
Visa and Mastercard had previously contended that the existing lawsuits they were facing in the UK over multilateral interchange fees made the need for the cases brought by Commercial and Interregional Card Claims unnecessary.
In a related development in the United States, Mastercard and Visa reached a class action settlement with U.S. merchants in March. This settlement aimed to resolve 20 years of antitrust litigation concerning swipe fees and the restrictions placed on merchants.
As part of the U.S. settlement, Mastercard, Visa, and the plaintiffs’ lawyers agreed to reduce credit interchange rates and cap them for five years. Additionally, the deal allows merchants greater flexibility in how they accept digital payments, including the ability to steer customers toward preferred payment methods and impose surcharges on credit card purchases.
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