Retailers are celebrating a “big win” following the latest Competition Appeal Tribunal (CAT) ruling in the long-running dispute over the fees set by Mastercard and Visa in relation to accepting card payments.
The long-awaited judgment has found that the majority of the losses caused by multilateral interchange fees (MIFs) were borne by retailers and were not passed on to consumers.
The judgment follows the second trial in the Interchange Umbrella Proceedings, which ran between November 2024 and April 2025, and brought together the retailers’ claims and the high-profile consumer claim Merricks v Mastercard, which settled in December 2024.
Stephenson Harwood – which settled claims against Mastercard and Visa in June 2024 and April 2025, respectively – and Scott + Scott represented groups of retailer claimants during the trial, while Harcus Parker led a conjoined claim in respect of commercial card and interregional MIFs.
Linklaters and Milbank represented Visa, while Jones Day and Freshfields represented Mastercard.
After the first trial, the CAT ruled that default MIFs breached EU and UK competition law. The second trial addressed the passing-on of MIFs at two levels: from acquiring banks to merchants, and from merchants to consumers.
Mr Justice Green, former Ashurst chair Ben Tidswell, and Professor Michael Waterson rejected Mastercard’s and Visa’s claim that merchants had mitigated their losses by passing MIF costs on to consumers, finding no “direct causative link” between MIF overcharging and downstream prices in most cases.
The CAT held that while acquirers had passed nearly all costs to retailers, those same merchants did not significantly pass those costs down to consumers, meaning that the legal test for causation for pass-on was not met.
Specifically, the CAT ruled there had been 100% acquirer pass-on for merchants in certain ‘IC’ (interchange plus) contracts, and 85% acquirer pass-on for merchants on standard or blended contracts. There was no merchant pass-through to consumers, save for cash services (100%), insurance underwriting (46.7%) and travel agents/online intermediaries (47.5%).
Genevieve Quierin, head of group actions at Stephenson Harwood, said: “We are very pleased to have secured this outcome, which is the result of a hard-fought trial and many years of litigation. Merchants across the UK and EU have long maintained that they do not pass on interchange fees to their customers, and this judgment will be a great boost for them, as well as those who are considering bringing interchange fee claims in the future.”
Stephen Allen, the director of two class representative companies in the Harcus Parker claim, called it “a big win for UK businesses and organisations”.
Jeremy Robinson of Harcus Parker added: “This judgment brings closer the day when the schemes will have to do right by millions of British businesses of all sizes. The schemes have the opportunity to stop the denial of justice and end this process now, and come to the table: we urge them to do so.”
Walter Merricks, the class representative in the Mastercard consumer litigation, called the move a major vindication of his decision to settle his consumer claim for £200m last year, saying he had correctly valued the pass-on risks and chose the right moment to settle.
He added that litigation funder Innsworth would have received nothing had the case proceeded following the latest ruling. The funder is challenging the CAT’s decision to approve the settlement in a judicial review to be heard later this year and has also brought arbitration proceedings.
Innsworth Capital was contacted for comment.
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