Visa and Mastercard face a threatened £5bn UK fee claim

By Olivia Hart

Harcus Parker and Hausfeld are threatening Visa and Mastercard with a potential £5 billion UK group claim alleging they stifled competition and overcharged businesses on card payments. The law firms lodged an application with the Competition Appeal Tribunal to pursue a group claim.

They say it would compensate companies allegedly overcharged on customer card payments since October 2020. The £5bn figure is an estimate attached to the application, not money a court has awarded.

What is the claim targeting?

Harcus Parker and Hausfeld say the case centers on multilateral interchange fees. Visa and Mastercard set those fees, and businesses pay them through banks whenever a customer pays by card. The firms argue that the absence of competition leaves businesses at the mercy of higher charges on debit, credit and prepaid cards.

The claim seeks to claw back fees charged over the past six years, plus interest on those losses. Sources close to the claim estimate the case could be worth about £5bn, based on the number of businesses allegedly overcharged between 2020 and 2026. The source does not provide the interchange rates, transaction counts or calculation behind that estimate.

Takeaway: In plain terms, the applicants want six years of card fees returned, with interest added.

Who could join and what could they recover?

If the application succeeds, an estimated 1 million UK-based businesses, organisations and charities with less than £100 million in revenue would be included automatically for compensation, unless they opt out. The source says their claims could be worth several thousand pounds each.

Larger businesses would have to opt in. The source says they could be due tens of millions of pounds over the claim period, rather than the smaller amounts described for automatic participants. It does not say how many larger businesses are expected to join or how either group’s claims would be calculated and allocated.

The proposed structure could reach a large population of UK businesses and charities without individual claims. Yet the source says the case could take years to reach a conclusion. It provides no timetable for a Competition Appeal Tribunal ruling.

Takeaway: Automatic inclusion creates scale, but the source discloses no formula for individual payouts.

Who is funding the litigation?

Bench Walk Advisors, a London-headquartered firm launched in 2017, is funding the case. The firm makes money from backing lawsuits. Stephen Allen, a British businessman and former travel sector executive, leads it and has pursued Visa and Mastercard through several group legal actions since 2021.

Mastercard disputes the claim’s basis and its funding. A Mastercard spokesperson said: “This speculative claim does nothing to support UK businesses or consumers and instead reflects the growing trend of opportunistic funder-backed litigation.”

The company also says interchange plays a vital role in supporting the UK payments ecosystem and helps people and businesses get paid quickly and securely. Mastercard says the UK government’s recently announced proposed opt-out class action reforms, put out for consultation this summer, are intended to prevent this type of claim.

Visa’s response focuses on the payment system rather than the estimate. 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.” Neither network’s quoted comments explain or defend the £5bn calculation.

Takeaway: Mastercard attacks the claim as opportunistic, while Visa’s defense does not address the alleged overcharges.

What does the U.S. settlement show?

Visa and Mastercard last year agreed to pay a combined $167.5 million to settle a U.S. class action accusing them of conspiring to keep ATM access fees artificially high. That lawsuit was first filed in 2011. The source gives no admission of liability or settlement terms beyond the combined payment.

The U.S. dispute concerned ATM access fees. The threatened UK case concerns card-payment interchange since October 2020, covering different charges and a different jurisdiction. The new application could still take years, and no timetable identifies when the Competition Appeal Tribunal might decide whether to allow it to proceed.

Takeaway: The $167.5 million U.S. deal shows litigation stakes, but UK claimants still have no timetable and could wait years.