[BREAKING NEWS] Interchange Fees: UK Supreme Court Decision Shines Spotlight on U.S. Swipe Fees17th June 2020
In a resounding victory for the merchant community, the UK Supreme Court has unanimously upheld the Court of Appeals’ previous ruling: concluding that the interchange fees set by Visa and Mastercard restricted competition in the payments industry.
With the merchants succeeding on all major issues, this leaves very little room for manoeuvre for the global schemes, Visa and Mastercard. Although the ruling current applies only to transactions that took place in the UK, there are clear ramifications for merchants in the U.S., and across the globe, who have also been subject to high interchange fees.
After years of economic and legal battle, this is a ground-breaking triumph for the merchant community – with retailers operating in the UK now having the opportunity to lodge their own claims against high interchange rates. This would be extremely welcome news at any time: but after many retailers have suffered significant revenue damage through the COVID-19 pandemic, the potential for a substantial cash boost will be more welcome than ever.
While the court’s legal ruling is clear, it’s now down to the Competition Appeal Tribunal to quantify the extent of merchants’ losses – and therefore the level of interchange that can now be reclaimed.
Based on claims going back to 2013, the maximum pay-out for UK merchants could be an estimated €17 billion if Visa and Mastercard fail to prove pass-through benefits. If European merchants then proceed, it could be as much as €68 billion (CMSPI estimate). Realistically – and dependent on the CAT decision – merchants will achieve a percentage of that figure.
However, the impacts of this decision are highly unlikely to be isolated to Europe. With U.S. merchants facing some of the highest payments costs in the world, this ruling shines a spotlight on high U.S. swipe fees. Now, more than ever, merchants must collaborate to promote awareness of excessive fees. To find out more about the ruling and the high swipe fees faced by U.S. merchants, get in touch with our experts today.