Claims against Mastercard and Visa for breaching competition law have been filed with the Competition Appeal Tribunal (CAT) in a class action lawsuit on behalf of UK travel and hospitality companies.
Law firm Harcus Parker, which has brought the claims, argues Mastercard and Visa have unlawfully overcharged businesses for credit and debit card payments on corporate cards and cards used by overseas visitors.
The claim for travel and hospitality alone could exceed £1.5 billion in repayment of ‘Multilateral Interchange Fees’ (MIFs), which make up most of the Merchant Service Charge (MSC) which banks charge on card payments.
These and ‘inter-regional fees’ are levied on customers by the banks, but Visa and Mastercard set the rates as a condition of the banks’ participation in the card schemes.
The banks then pay ‘scheme fees’ to Visa and Mastercard.
The European Commission ruled such fees on consumer card transactions broke competition law back in 2007, and MIFs have been capped at 0.3% on consumer credit card transactions and 0.2% on consumer debit cards since 2015.
But the fees on corporate card transactions remain as high as 1.8%.
The CAT is the UK court for competition law and the claims have been brought on behalf of all businesses which accept card payments. Businesses with an annual pre-Covid turnover of £100 million or more simply need to opt into the claim. Those with turnover below £100 million are automatically included unless they opt out.
Travel industry non-executive director Steve Allen, former managing director of Wexas Travel, is a director of the claims companies.
Harcus Parker noted: “In past EU and UK litigation, EU and UK MIFs were found to be anti-competitive and therefore unlawful.
“Our objectives in bringing this class action are to seek damages plus interest for past losses suffered by businesses, and to end unlawful charges for the future.”
More at: commercialcardclaim.co.uk