Mastercard Inc (NYSE:MA) and Visa Inc (NYSE:V) are facing a 'minimum £7.5bn' compensation claim worth from businesses accusing the payment-processing companies of overcharging for their services.
London-based law firm Harcus Parker is set to file a claim with the Competition Appeal Tribunal, according to Sky News, which relates to multilateral interchange fees (MIFs), which are paid by companies to banks each time someone uses a card and are set by payment processors.
Averaging about 2% of any given transaction value, MIFs are estimated to make up 90% of a typical firm’s monthly bank charge.
The compensation claim argues that the US payment giants are setting fees themselves and that they are not a result of market conditions.
"We are standing up for UK businesses - big and small - and demanding that they be properly compensated," said Harkus Parker partner Thomas Ross, who claimed the fees were “unlawful”.
The law firm said the minimum expected was £7.5bn (US$9bn) and the figure could be double that. Companies generating over £100mln in revenue prior to the pandemic are set to be invited to opt in to the claim.
Mastercard and Visa boast 98% of the UK’s payment market share collectively, accounting for roughly 80% of US transactions too.
The pair have faced a number of lawsuits over their setting of interchange fees recently, including another from Harkus Parker last year accusing them of overcharging corporate and foreign card holders, which is due for a preliminary hearing in April.
Last summer, the UK's Payment Systems Regulator said it will examine rising credit card fees, with a market review finding that fees had increased significantly from 2014 to 2018.