Visa and Mastercard Face Potential £5bn UK Class Action Over Card Fees

A potential £5bn group claim against Visa and Mastercard landed at the UK Competition Appeal Tribunal on Monday-style filings by law firms Harcus Parker and Hausfeld, which accuse the two card giants of stifling competition and overcharging British businesses on customer card payments since October 2020.

The claim targets multilateral interchange fees. Visa and Mastercard set these fees, and businesses pay them through their banks every time a customer pays by card. The claimants argue the lack of competition has left UK merchants at the card networks' mercy — paying inflated fees on debit, credit and prepaid cards alike.

Who is behind the claim?

The application is being led by Stephen Allen, a British businessman and former travel sector executive who has pursued Visa and Mastercard through a series of group legal actions since 2021. The litigation is funded by Bench Walk Advisors, a London-headquartered litigation finance firm launched in 2017 that earns money by backing lawsuits.

The case seeks to claw back fees charged over the past six years, plus interest on those losses. Sources close to the claim estimate its value at roughly £5bn, based on the number of businesses allegedly overcharged between 2020 and 2026.

Who would be compensated?

If the Competition Appeal Tribunal admits the claim, the practical consequences would be significant for UK merchants and their advisers.

• An estimated 1m UK-based businesses, organisations and charities with revenues below £100m would be automatically included unless they opt out.
• Individual claims for smaller entities could be worth several thousands of pounds each.
• Larger businesses must actively opt in, and could be due tens of millions of pounds over the claim period.

For practitioners, the opt-out structure means small and mid-sized merchant clients face a default position of inclusion, with advice needed on whether to remain in the class or opt out. Larger corporate clients will need to weigh affirmative opt-in decisions and assess historical card fee records stretching back to October 2020.

What do Visa and Mastercard say?

A Mastercard spokesperson defended the fees and dismissed the claim as speculative.

"We strongly disagree with the basis of this claim," the spokesperson said. "Interchange plays a vital role in supporting the UK payments ecosystem, and ensures people and businesses can pay and get paid quickly and securely."

The spokesperson called the action "speculative" and part of a "growing trend of opportunistic funder-backed litigation", adding: "This speculative claim does nothing to support UK businesses or consumers and instead reflects the growing trend of opportunistic funder-backed litigation. It is exactly the type of claim the UK government's recently announced proposed opt-out class action reforms [put out for consultation this summer] are directed at preventing."

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."

How long could this take?

Litigation of this scale rarely moves quickly, and the precedent offers a cautionary timeline. Visa and Mastercard last year agreed to pay a combined $167.5m to settle a US class action accusing the two companies of conspiring to keep ATM access fees artificially high. That lawsuit was originally filed in 2011 — meaning it took well over a decade to resolve.

Observers expect the UK claim could likewise take years to reach a conclusion, with the tribunal first needing to decide whether to certify the collective action before any substantive arguments on the merits of the interchange fee allegations are heard.