Visa and Mastercard Face New Legal Challenges Over Merchant Fees

Global payments processors Visa and Mastercard face additional lawsuits over fees charged to retailers following a Friday ruling by a London tribunal.

The tribunal’s decision allows collective cases brought on behalf of merchants to proceed, adding to the already extensive list of legal challenges faced by the two firms.

Background on Interchange Fees:

Visa and Mastercard have been embroiled in numerous lawsuits in London concerning multilateral interchange fees.

These fees are charged to retailers when consumers use their cards for purchases. The Competition Appeal Tribunal in London has been overseeing these cases, which involve hundreds of claimants.

New Lawsuits by Commercial and Interregional Card Claims:

In 2022, Commercial and Interregional Card Claims, a special-purpose vehicle, initiated another set of lawsuits against Visa and Mastercard. These suits seek damages on behalf of merchants who allege they were overcharged by the fees imposed by the payment processors.

Initially, the Competition Appeal Tribunal declined to certify the cases under the United Kingdom’s collective proceedings regime, which functions similarly to class action lawsuits in the United States.

However, the tribunal reversed this decision on Friday, stating that the cases could proceed, subject to representations by other interested parties.

Implications for Visa and Mastercard:

The tribunal’s ruling to certify the collective cases signifies a substantial development in the legal battles facing Visa and Mastercard.

If the merchants’ claims are upheld, the decision could lead to significant financial liabilities for both companies.

Future Legal Proceedings:

Both Visa and Mastercard must prepare for a protracted legal battle as the cases proceed.

The certification of these collective proceedings underlines the growing scrutiny and legal challenges related to interchange fees, which have been a contentious issue for payment processors and merchants alike.