Visa and Mastercard caught in legal storm over card fees Business

More than 100,000 UK businesses will sue Mastercard and Visa over claims they charge fees on business credit cards up to six times the maximum level.

A class action lawsuit will be filed Thursday with the Competition Appeal Tribunal (CAT) by boutique law firm Harcus Parker, on behalf of the travel and hospitality businesses.

The lawyers claim Mastercard and Visa are exploiting their dominant market position through a loophole that allows them to charge up to 1.8pc per transaction on corporate credit cards.

The UK introduced laws in 2015 that capped fees, called interchange fees, at 0.3pc for credit cards and 0.2pc for debit cards. But the rules did not apply to corporate credit cards, lawyers will say.

A Mastercard spokesperson said: “We firmly believe that businesses of all sizes derive real value from accepting cards issued on our network, and we are committed to helping our retail partners grow their businesses. and encourage the adoption of ever more convenient and secure services. and secure ways to pay and get paid.

Visa declined to comment.

The travel and hospitality industries are more exposed to corporate credit card charges as they provide services such as flights, hotels, food and beverages to company employees.

Reparations are estimated to be in the billions of pounds if the judges rule in favor of the claimants.

Harcus Parker partners estimate that more than 100,000 businesses large and small could be eligible for compensation.

Businesses in the travel and hospitality sectors that generate less than £100m in revenue will be automatically registered with the application, but given the option to opt out.

Companies with more than £100million in turnover will have to register for the legal challenge.

The offering is being funded by London backers Bench Walk Advisors.

Mastercard and Visa have faced a number of legal challenges in recent years over fees charged before UK laws changed.

In December, retailers including Levi and Superdry served the credit card giants with subpoenas alleging a violation of competition law.

A month earlier, a dispute had broken out between Amazon and Visa. Millions of Amazon customers in the UK were to be stopped from shopping on the website after fees increased following Britain’s exit from the EU.

A few days before the January 19 deadline for the ban to take effect, Amazon changed tack.

Many businesses are aware of the higher fees charged by American Express on purchases, but are unaware of those charged on Mastercard and Visa corporate credit cards.

Amazon is not alone in attacking Visa. US supermarket chain Kroger said in 2019 it would no longer accept the company’s cards at Smith’s Food & Drug chain, before lifting the ban months later.