Mastercard Faces £14 Billion Suit for Overcharging in the UK

Mastercard is facing a £14 billion class action lawsuit in the UK alleging that they have overcharged in interchange fees. (www.pymnts.com). The case is brought under the Consumer Rights Act 2015, which regulates anti-competitive acts by companies. It is another case alleging anti-competitive behavior, like the one that Visa and Mastercard lost earlier in June 2020 (www.pymnts.com). 

The United States has some of the highest interchange fees in the world. These lawsuits are notable because the UK and the European Union already have fees which are substantially lower than those in the US. This difference is due to how each country regulates interchange fees. The fees end up being paid by merchants, and essentially are an extra “hidden” tax by financial companies. 

(Joe Resendiz at Valuepenguin.com) 

Interchange fees are somewhat arbitrary and the only reason the US pays some of the highest fees is because the US has less regulation, allowing the credit card brands to charge higher fees. Team Merchant is an advocate of lower interchange fees and we believe reducing these fees would put money back into small businesses and help consumers pay less.