Victory in trial against Visa and Mastercard: Competition Appeal Tribunal rules that Visa and Mastercard’s Merchant Interchange Fee forced retailers to pay excessive payment card fees.
The UK Competition Appeal Tribunal ruled that Visa and Mastercard’s Multilateral Interchange Fees (MIFs or interchange fees) amounted to an infringement of UK and Irish competition law. „This is a significant victory for thousands of merchants located across Europe. The ruling in this case, led by the London office of Scott+Scott, is a landmark victory for its clients.” – the company said.
The judgment ruled in favour of Scott+Scott’s clients that the MIFs amount to a non-negotiable floor to the Merchant Service Charges which merchants have to pay to the banks that process their card payments.
Commenting on the case, David Scott, Global Managing Partner, Scott+Scott said: “Today’s judgment is a significant win for all merchants who have been paying excessive interchange fees to Visa and Mastercard.”
A MIF is a fee payable by merchants on all debit and credit card transactions. MIFs are not freely negotiated by the acquiring banks (the bank who administers the payment for the retailer) and issuers (the bank who administers a consumer’s money and payment cards) in consideration for services by the issuer. Instead, it is a fee imposed by Visa and Mastercard on acquirers, who have no choice but to pay it. The cost is then passed on to merchants who are powerless to negotiate it.
Both Visa and Mastercard said they disagreed with the decision and intended to seek permission to appeal.
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.”
„Mastercard strongly disagrees with today’s decision, which is deeply flawed, and will seek permission to appeal,” a Mastercard spokesperson said in a statement.
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