- Mastercard agrees to a £200 million($250 million) settlement in a UK lawsuit regarding excessive transaction fees.
- The settlement marks a significant resolution in the long-standing dispute over payment fees.
What happened: Mastercard settles UK fee overcharging lawsuit
Mastercard has reached a settlement agreement in principle to resolve a groundbreaking legal claim brought on behalf of approximately 46 million UK consumers. The consumers alleged that the payments company imposed unfairly high transaction fees on card transactions. This landmark case, initiated by consumer advocate Walter Merricks and pursued for nearly nine years, has resulted in a proposed settlement worth around £200 million($250 million), significantly lower than the original £10 billion sought by the claimants.
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Why it is important
This settlement is crucial as it addresses a long-standing issue of overcharging by payment networks, which has been a point of contention for consumers and regulators alike. The outcome of this case could set a precedent for future legal actions against large companies in the financial services sector. It also highlights the broader regulatory scrutiny of payment networks, especially in the context of the UK’s payment systems where Mastercard and Visa account for 95% of all debit and credit card payments. The successful legal action is expected to pave the way for similar collective lawsuits against other large companies, potentially leading to a reevaluation of fees and practices within the industry. This development is a significant moment in the evolution of consumer rights litigation in the United Kingdom and may influence payment practices globally.
