Visa and Mastercard Face £700m Legal Action Over Post-Brexit Fee Hikes

Visa and Mastercard are facing a £700 million legal claim in the UK Competition Appeal Tribunal for allegedly overcharging merchants on cross-border transactions following Brexit. For fintech professionals, this highlights the ongoing regulatory and legal scrutiny over interchange fees and the potential for massive collective redress actions to reshape the economics of card acceptance.

What was announced

The legal action, brought on behalf of approximately 126,000 UK businesses, alleges that the two payment giants exploited the removal of EU fee caps post-Brexit to increase charges for online and remote payments from customers in the European Economic Area (EEA). Led by Ann Pope, a former Senior Director at the Competition and Markets Authority (CMA), the claim seeks compensation for UK-based merchants that have accepted these payments since October 2020. Organizations meeting the criteria will be automatically included in the legal action unless they choose to opt out.

The core of the argument is that while EU caps no longer applied after the UK's exit from the bloc, the underlying costs of processing these transactions remained largely unchanged as the UK stayed within the Single Euro Payments Area (SEPA). Despite this, the Payment Systems Regulator (PSR) found that Visa and Mastercard implemented five-fold fee increases. Specifically, the PSR identified that Visa raised its UK-EEA online transaction fees in October 2021, with Mastercard following in April 2022. Fees jumped from 0.2% to 1.15% for consumer debit cards and from 0.3% to 1.5% for consumer credit cards. The regulator concluded that the companies were not subject to effective competitive constraints during these increases, which are estimated to cost UK businesses between £150 million and £200 million annually.

"Europe is a crucial market for many British businesses, who accept online transactions from EEA-based customers every day without a second thought. Following Brexit, Visa and Mastercard increased the fees charged on these transactions five-fold. Our legal action seeks to recover what we say UK businesses have wrongly been required to pay."

Ann Pope, leading the claim against Visa and Mastercard.

The companies involved

Visa and Mastercard are the dominant forces in the global payments landscape, operating the world’s largest retail electronic payment networks. Visa, which has been the subject of over 700 reports by FF News, provides the infrastructure that enables consumers, businesses, and government entities to use digital currency instead of cash and checks. Mastercard, with nearly 1,000 mentions in our coverage, operates as a technology company in the global payments industry, connecting consumers, financial institutions, and merchants in more than 210 countries and territories. Both companies have faced long-standing regulatory pressure regarding their interchange fee structures across multiple jurisdictions.

Representing the claim is Geradin Partners, a specialist competition law firm where David Gallagher serves as a Partner. The action is spearheaded by Ann Pope through Ann Pope Collective Proceedings Limited. Pope brings significant regulatory experience to the case, having previously served as a Senior Director at the UK’s Competition and Markets Authority (CMA), where she oversaw various enforcement and market investigations. The PSR has already noted that the fee increases prompted a proposal for a price cap, which remains under consideration by the regulator.

What FF News has reported before

FF News has extensively tracked Mastercard’s global operations and its expansion into emerging payment technologies. Recently, we covered how SoFi Tech, Orbi, and Mastercard Launch Crypto-Linked Payments in Mexico, showcasing the firm's push into digital assets. In the infrastructure space, we reported on how Mastercard Rolls Out New Offline Payment Requirements to Combat Power Outages Across Europe to ensure transaction continuity. Additionally, the company’s role in financial inclusion was highlighted when Mukuru Launches Neobank Account and Card in South Africa with Bank Zero and Mastercard. We also noted the brand's marketing efforts, such as when Mastercard Revives Iconic 'Priceless' Campaign with Boca Juniors Partnership in Argentina.

What this means

This claim represents a significant escalation in the battle between merchants and the card schemes over the cost of acceptance. By leveraging the UK’s collective proceedings regime, the claimants are putting the dominant payment networks under a level of financial pressure that individual merchant complaints rarely achieve. The five-fold fee increase post-Brexit has long been a point of contention for the PSR, and this legal action effectively weaponizes that regulatory frustration. If successful, it could force a fundamental reassessment of how cross-border fees are calculated in a post-Brexit environment. Furthermore, it signals to the wider fintech market that the regulatory shifts created by Brexit are not a shield against competition law scrutiny.