Visa & Mastercard Interchange Fees – Struck Down by UK Court

There has been some interest in this court case, with the question – will this affect the credit cards’ activities outside the UK? EFSA feels this is probably a UK-only issue, however, it is interesting to delve into the court ruling. The UK’s High Court has come down in favour of the UK’s largest supermarket chains in a long-running legal battle over the level of interchange fees charged by Visa and Mastercard. The court unanimously held that the multilateral interchange fees (MIFs) infringed EU antitrust rules by illegally restricting competition in the acquiring market. This ruling concludes several years of legal battles over the rate of interchange fees set by Visa and Mastercard. Many of the UK’s retailers had already been awarded substantial claims – Sainsbury’s et al. had been awarded over £69 million – at the Court of Appeal. The new judgement does not specify exactly how much the merchants are entitled to in repayment, but it is expected to pave the way for other cases to be brought to the commercial courts.

SA banks usually issue local cards via local acquiring merchants. These apply what are called Bilateral Interchange Fees (BIF) rather than Multilateral Interchange Fees (MIF).

Many thanks to the Chairman of the EFSA Online Payments Committee, Thomas van der Spuy, for the information on this case.