Mastercard and Visa vow to appeal the latest judgment on multilateral interchange fees.
Mastercard and Visa’s multilateral interchange fees have been found to break European competition laws by the UK’s Competition Appeal Tribunal.
In a judgment issued on June 27, the Tribunal unanimously ruled the default interchange fees set by both card networks are anti-competitive. This ruling came after Trial One of a long-running case involving about 2,100 merchants who challenged the fees charged when customers pay by card.
David Scott, Global Managing Partner at Scott+Scott, the law firm representing the claimants, said the ruling was “a significant win for all merchants who have been paying excessive interchange fees to Visa and Mastercard.”
Trial One focused on whether these fees unlawfully restrict competition and how much they caused losses to merchants. This judgment deals only with liability. Later trials will look at issues like exemption claims and whether merchants passed on the extra costs to consumers.
The legal battle is far from over. Both Visa and Mastercard disagree with the tribunal’s decision and plan to seek permission to appeal.
A Visa spokesperson 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.”
A Mastercard spokesperson said: “Mastercard strongly disagrees with today’s decision, which is deeply flawed, and will seek permission to appeal.”
A Long-Running Saga
Multilateral interchange fees are charges applied to acquirers (the banks or payment processors working with merchants) each time a card transaction happens.
These fees, set by Visa and Mastercard independently, are a key part of the overall cost merchants pay to accept card payments and are included in what’s called the Merchant Service Charge.
The fees have been controversial for a long time. Critics say they are too high and reduce competition by increasing costs for both retailers and consumers.
UK financial regulators like the Payment Systems Regulator (PSR) have pushed for alternative payment methods to reduce reliance on traditional card schemes. Account-to-Account (A2A) payments are seen as one of the best alternatives to card payments, with Open Banking becoming more popular in the UK and Ireland.
Following the UK Government’s announcement of a Smart Data Group earlier this month, Huw Davies, Co-Founder and CEO of Ozone API, highlighted the impact Open Banking has on the region.
“We’ve seen how Open Banking laid the foundations for a more competitive, consumer-focused financial system,” he said.
The UK is not alone in trying to move consumers away from card payments. The European Union is also working to increase competition and control over payment systems as part of broader financial reforms.
“Whether you use a card or a phone, typically it goes through Visa, Mastercard, PayPal, Alipay – where are all those coming from? Either the US or China. The whole infrastructure mechanism that allows for payments, credit and debit, is not a European solution,” said Christine Lagarde, President of the European Central Bank, on The Pat Kenny Show in April.
Away from pushing for solutions, the tide may be turning for these payments giants in the courtrooms. Mastercard is set to pay up to £200m to affected consumers after agreeing to settle a nearly decade-long lawsuit on May 19.
Walter Merricks, the class action representative who led the lawsuit against Mastercard in 2016, called the £200 million compensation a “fair and just outcome for UK consumers” after Mastercard was found to have overcharged consumers and businesses on interchange fees.
Despite the controversies and efforts to promote alternatives, consumers still prefer card payments. A UK Finance report from April 2025 showed the total value of transactions made with UK-issued cards topped £1trn in 2024. The number of cards in use also rose to 163.4 million by the end of 2024, up from 159.7 million the year before.
