Mastercard has reached an agreement in principle to settle a groundbreaking legal claim brought on behalf of approximately 46 million UK consumers, who alleged the payments company imposed unfairly high transaction fees.

The landmark case, initiated by consumer champion Walter Merricks, a former financial ombudsman, has been one of the most significant mass lawsuits in the United Kingdom. After nearly nine years of litigation, the proposed settlement is understood to be worth around £200 million, substantially lower than the original £10 billion sought by claimants.

The legal action challenged Mastercard's card transaction fees, testing new ground in the UK's legal system. The case gained momentum after the Supreme Court ruled in late 2020 that it could proceed, marking a pivotal moment for collective legal actions under the Consumer Rights Act of 2015.

"I am very pleased that after nearly nine years of litigation with Mastercard, I have agreed a settlement that I believe will deliver meaningful compensation to class members who choose to come forward to participate in the distribution of the damages," Merricks stated.

A Mastercard spokesperson commented, "We are pleased to have reached an agreement in principle to put this case behind us."

The lawsuit is part of a broader regulatory scrutiny of payment networks. In the UK, Mastercard and Visa account for 95 per cent of all debit and credit card payments. Regulators have consistently challenged the companies' practices, with the Payments Systems Regulator previously proposing caps on card fees for online transactions between the UK and EU.

This case follows a similar pattern to a recent $30 billion settlement in the United States, where Mastercard and Visa agreed to lower transaction fees charged to merchants over the next five years.

The successful legal action is expected to pave the way for similar collective lawsuits against other large companies. Already, high-profile claims have emerged, including a recent lawsuit against Microsoft over alleged overcharging for Windows Server licensing.

The proposed settlement is subject to approval by the Competition Appeal Tribunal, marking a significant moment in the evolution of consumer rights litigation in the United Kingdom.

---