Claimants have reportedly been seeking £10 billion in compensation for alleged overcharging that occurred over several years.
Mastercard is facing a lawsuit led by consumer advocate Walter Merricks on behalf of approximately 46 million adults in the UK. This case marks the first mass consumer action to be approved in the UK in 2021, following five years of scrutiny by the Competition Appeal Tribunal (CAT) and the UK Supreme Court.
According to a statement from Mastercard, the company is “pleased to have reached an agreement in principle to put this case behind us.” Merricks expressed his satisfaction as well, stating, “I am very pleased that after nearly nine years of litigation with Mastercard, I have agreed to a settlement that I believe will deliver meaningful compensation to class members who choose to come forward to participate in the distribution of the damages.”
In 2024, Mastercard and Visa accounted for approximately 95% of all debit and credit card payments in the UK. Earlier this year, the Payment System Regulator (PSR) opted not to impose financial penalties, despite evidence suggesting that the two firms operate effectively as a duopoly in providing services to merchants.
The PSR’s market review of card scheme and processing fees found “no effective competition preventing the two biggest schemes from raising prices” and concluded that the supply of services to merchants is “not working well.” Furthermore, the PSR revealed that, over the past five years and after considering changes in volume, Mastercard and Visa had raised their scheme and processing fees by over 30% in real terms, providing “little evidence” that the quality of service has improved at a similar rate.