Visa and Mastercard face potential £5bn UK lawsuit over card fees

Law firms file group claim on behalf of businesses allegedly overcharged since 2020

By LineZotpaper AI staff

Published26 October 2026

Updated26 October 2026

Read Time2 min

Sources3 outlets

Visa and Mastercard are threatened with a potential £5bn lawsuit in the UK after law firms lodged an application at the Competition Appeal Tribunal seeking compensation for businesses allegedly overcharged on customer card payments since October 2020.

The claim, led by the law firms Harcus Parker and Hausfeld, centres on multilateral interchange fees set by Visa and Mastercard that are paid by businesses through their banks each time a customer pays by card. The firms argue that a lack of competition has left businesses paying higher fees on debit, credit and prepaid cards with no alternative.

Sources close to the claim estimate it could be worth about £5bn, based on the number of businesses allegedly overcharged between 2020 and 2026. If approved, roughly 1 million UK-based businesses, organisations and charities with less than £100m in revenues would be automatically included for compensation unless they opt out. Larger businesses would need to opt in and could be due tens of millions over the claim period.

A Mastercard spokesperson called the claim “speculative” and part of a “growing trend of opportunistic funder-backed litigation”. The company said interchange plays a “vital role in supporting the UK payments ecosystem” and that the case was exactly the type the government’s proposed opt-out class action reforms aim to prevent. A Visa spokesperson said interchange is “a critical component to maintaining a secure digital payments ecosystem that benefits all parties, including consumers, merchants and banks”.

The case is funded by Bench Walk Advisors and led by Stephen Allen, a British businessman who has pursued similar actions since 2021. It could take years to reach a conclusion, echoing a US class action over ATM fees that was settled last year after being filed in 2011.

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Analysis

Why This Matters

The claim could result in compensation for up to 1 million UK businesses and charities overcharged on card payments, with individual claims potentially worth thousands of pounds.
It challenges the dominance of Visa and Mastercard in setting interchange fees, which affect virtually all card transactions in the UK.
The case is part of a broader trend of opt-out class actions in the UK and coincides with a government consultation on reforming such actions.

Background

Visa and Mastercard set multilateral interchange fees that businesses pay on every card transaction. Critics argue that the lack of competition enables the two companies to charge inflated fees. The law firms Harcus Parker and Hausfeld have filed an application at the Competition Appeal Tribunal for a group claim covering fees since October 2020. A similar US class action accusing the two companies of conspiring to keep ATM access fees artificially high was settled last year for $167.5m after being filed in 2011.

Key Perspectives

Harcus Parker and Hausfeld (the law firms): argue that Visa and Mastercard have stifled competition, leaving businesses with no choice but to pay excessive fees on debit, credit and prepaid cards since October 2020. Mastercard: says the claim is “speculative” and reflects a “growing trend of opportunistic funder-backed litigation”, and that interchange fees support “the UK payments ecosystem”. Visa: defends interchange as “a critical component to maintaining a secure digital payments ecosystem” that benefits all parties.

What to Watch

Whether the Competition Appeal Tribunal certifies the claim as an opt-out class action, which would determine how many businesses are automatically included.
The outcome of the UK government’s consultation on opt-out class action reforms, which could affect the viability of such cases.
The timeline: the US case took over a decade to settle, suggesting this UK claim may also be a lengthy process.

Sources

Visa and Mastercard threatened with potential £5bn UK lawsuit over fees · The Guardian
Visa and Mastercard threatened with potential £5bn UK lawsuit over fees · The Guardian
Visa and Mastercard threatened with potential £5bn UK lawsuit over fees · The Guardian

Checked

12 claims in this story checked against 1 source: 10 supported.

Show each claim

SupportedVisa and Mastercard face a potential £5bn UK lawsuit over card fees.Business | The Guardian: “Visa and Mastercard threatened with potential £5bn UK lawsuit over fees.”
Partly supportedThe summary says law firms filed a group claim for businesses allegedly overcharged since 2020.Business | The Guardian: “The law firms Harcus Parker and Hausfeld have lodged an application at the Competition Appeal Tribunal in hopes of pursuing a group claim that would compensate companies who, they claim, have been overcharged on customer card payments since October 2020.”
SupportedThe firms lodged an application at the Competition Appeal Tribunal seeking compensation for businesses allegedly overcharged on card payments since October 2020.Business | The Guardian: “The law firms Harcus Parker and Hausfeld have lodged an application at the Competition Appeal Tribunal in hopes of pursuing a group claim that would compensate companies who, they claim, have been overcharged on customer card payments since October 2020.”
SupportedHarcus Parker and Hausfeld lead the claim, which concerns multilateral interchange fees set by Visa and Mastercard and paid by businesses through their banks when customers pay by card.Business | The Guardian: “The claim will centre on multilateral interchange fees, which are set by Visa and Mastercard and then paid by businesses through their banks every time a customer pays by card.”
Partly supportedThe firms argue that a lack of competition leaves businesses paying higher fees on debit, credit and prepaid cards with no alternative.Business | The Guardian: “The argument is that the lack of competition has left businesses at their mercy – and paying higher fees on debit, credit and prepaid cards – as a result.”
SupportedSources close to the claim estimate it could be worth about £5bn, based on businesses allegedly overcharged between 2020 and 2026.Business | The Guardian: “Sources close to the claim estimate that it could be worth about £5bn, based on the number of businesses allegedly overcharged between 2020 and 2026.”
SupportedIf approved, roughly 1 million UK-based businesses, organisations and charities with less than £100m in revenues would be included automatically unless they opt out.Business | The Guardian: “If the application is successful, an estimated 1m UK-based businesses, organisations and charities with less than £100m in revenues will be automatically included for compensation, unless they opt out.”
SupportedLarger businesses would need to opt in and could be due tens of millions over the claim period.Business | The Guardian: “Larger businesses would have to actively opt in to be included in the claim, and could be due tens of millions over the claim period.”
SupportedA Mastercard spokesperson called the claim “speculative” and part of a “growing trend of opportunistic funder-backed litigation”.Business | The Guardian: “A spokesperson for Mastercard defended the interchange fees, saying the potential group claim was “speculative” and part of a “growing trend of opportunistic funder-backed litigation”.”
SupportedMastercard said interchange plays a vital role in supporting the UK payments ecosystem and that the case was the type the government's proposed opt-out class action reforms aim to prevent.Business | The Guardian: ““We strongly disagree with the basis of this claim. Interchange plays a vital role in supporting the UK payments ecosystem, and ensures people and businesses can pay and get paid quickly and securely.”
SupportedA Visa spokesperson said interchange is a critical component to maintaining a secure digital payments ecosystem benefiting consumers, merchants and banks.Business | The Guardian: “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.””
SupportedThe case is funded by Bench Walk Advisors and led by Stephen Allen, who has pursued similar actions since 2021; it could take years to conclude, like a US ATM-fee class action settled last year after being filed in 2011.Business | The Guardian: “It is being led by Stephen Allen, a British businessman and former travel sector executive who has been pursuing Visa and Mastercard through a number of group legal actions since 2021. If the application is successful, an estimated 1m UK-based businesses, organisations and charities with less than £100m in revenues will be automatically included for compensation, unless they opt out.”