Everything you need to know about interchange claims

16th July 2018
Brendan Doyle
Brendan Doyle
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Read the latest update, from June 2020, by clicking here: Supreme Court Finds in Favour of the Merchants


The recent Court of Appeal ruling has created the opportunity for merchants to make substantial claims for historic overcharging of interchange fees by Visa and Mastercard. However, many merchants have yet to file a claim and each month that passes sees claim values fall. 

There are several, essential questions merchants need to ask before embarking on any claim, such as; should my business make a claim? How much would it be entitled to? How do we go about it?

CMSPI has been assisting dozens of major retailers in their pursuit of compensation for the overcharging of historic interchange fees. Last week, one of our clients, Sainsbury’s Supermarkets, achieved a ground-breaking judgment at The Court of Appeal and the door is now open for merchants to make claims for years of historic overcharging.

Before you decide whether or not you want to pursue a claim, you need to be sure that there is a sound commercial case for doing so. In this blog, our CEO, Brendan Doyle, answers the essential questions that all merchants need to ask before embarking on a claim.

Brendan Doyle, CMSPI CEO said: “There is no doubt that last weeks’ Court of Appeal judgment was a great victory for merchants. CMSPI has been closely involved throughout this long, drawn-out process, most recently in providing Sainsbury’s with commercial and economic information on the payments industry. We were really pleased that the UK legal system has proven itself capable of standing up to the global card schemes. The decision opens the door for all merchants to make claims for substantial overcharging in both credit and debit card fees, with even small chains able to claim back significant amounts of historic fees paid. However, despite claims to the contrary, this is no simple ‘PPI-style’ process, and I am concerned that merchants ensure that their case makes commercial sense to avoid being coaxed into ‘quick deals’ designed to earn legal fees for law firms rather than achieve full and fair redress.”

Should my business be making a claim?

Probably – and you need to decide quickly as each month that passes will reduce your claim value.

The Court of Appeal decision is major step forward, because it opens the door for settlement at par, i.e. that all interchange fees you ever paid were illegal and those levied over the last six years should be refunded plus interest. This is a huge amount and even if the schemes can prove that some of the fees charged should remain valid, we expect these will be at a much lower level than interchange was before the 2015 regulation. As fees were higher before then and you only have a limited historic period over which you can claim, the value of your claim falls each month in which you do not act.

So, how much interchange did my business pay – over what period?

Despite some claims to the contrary, calculating the amount of interchange you paid over the period is tricky. Before regulation in 2015 there were a magnitude of interchange rates, applied to hundreds of card types, changed often and then hidden behind “blended” price structures, over decades. So calculating the amount of interchange paid is a complex job. Fortunately, CMSPI has been gathering and storing interchange data for decades and we have the knowledge and techniques required to help merchants accurately calculate their claim value.

How much can we claim back?

Unfortunately the Courts have not given us a definitive answer and may not for some time. We believe that Sainsbury’s arguments for settlement at par (i.e. the whole lot), has a great chance of success but much depends on the argument of whether at least some of the charges could be exempt because they provide general economic benefits. The exact level that the Courts will finally agree on are therefore open to debate. Understanding the various positions will be key to substantiating the value of your claim. 

Do we need to engage external solicitors?

Not necessarily. We are working with merchants that have chosen to pursue claims without third-party legal representation. Businesses that do wish to seek outside help should ensure that the firms in question have experience and knowledge in this complex area. We are in daily contact with a number of reputable solicitors and although we do not recommend, we are happy to provide details should you enquire.

What role would CMSPI play in this process?

We are not solicitors and cannot give legal advice. However, we can assist you in a three-step process;

  1. Helping you to decide whether your claim value is substantial enough for you to pursue a claim
  2. Providing an accurate and robust calculation of your claim value
  3. Supporting you through the claim process

Importantly, we advise you of this information and the necessary steps to take before having to engage a solicitor, which gives you the opportunity to assess internally whether you need further, external support during the process. 

How are Visa and Mastercard responding to claims?

The schemes may challenge the quantum of your claim, as every claim will be different depending on a number of factors including your business’ unique card mix. CMSPI will support you with the data and knowledge to help combat these challenges.

Want to find out more about launching your claim?