The UK Competition Appeal Tribunal has ruled that Visa and Mastercard's multilateral interchange fees violate European competition rules, marking a significant victory for merchants in a years-long battle.

Multilateral interchange fees, also known as interchange or swipe fees, are fees that a merchant's bank pays to a cardholder's bank each time a customer uses a credit or debit card to make a purchase.

These fees are set by credit card networks such as Visa and Mastercard and are generally passed on to merchants as part of the merchant service charge.

The decision relates to several cases brought by hundreds of merchants who have claimed that fees imposed by the payments giants are excessive.

According to Reuters, the claimants’ attorney, David Scott, global managing partner at law firm Scott+Scott, said the outcome represents "a significant win for all merchants who have been paying excessive interchange fees to Visa and Mastercard".

In response, both Visa and Mastercard have said they are seeking permission to appeal the ruling, the news agency reported.“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,” a Visa spokesperson told Reuters.

“Mastercard strongly disagrees with today’s decision, which is deeply flawed, and will seek permission to appeal,” a Mastercard spokesperson told Reuters.

The ruling is the latest in a series of challenges to Visa and Mastercard’s fee structure, both in the UK and globally.

In 2024, Visa and Mastercard reached a $30 billion settlement with US merchants after nearly two decades of litigation. The agreement will limit and reduce credit card processing fees for at least five years.

The US Credit Card Competition Act, a bipartisan bill that aims to break the Visa-Mastercard duopoly by requiring large banks to offer alternative payment networks on their cards, has been submitted to Congress several times since 2022 and has not been enacted into law.

In the UK earlier this month, the Competition appeal tribunal approved a £200 million settlement in a class action lawsuit brought by consumer advocate Walter Merricks against Mastercard.

The case, involving millions of British consumers, also centred on excessive interchange fees.

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