BUSINESS NEWS


Lawyers estimate card schemes owe more than £4 billion to UK


travel, hospitality and retail businesses


Card fee claimants win significant legal ruling


Tribunal rules fees are largely passed on to merchants. Ian Taylor reports


The class action claim against Mastercard and Visa for repayment of fees on commercial card payments won a significant ruling in the Competition Appeal Tribunal (CAT) last week. In a judgment on whether the


fees are ‘passed on’ by acquirers to merchants and by merchants to customers, the Tribunal ruled the fees are passed on 100% to larger merchants and 85% to smaller and that, with some exceptions, merchants don’t pass on the fees. In the case of travel retailers, the


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Tribunal found less than half the fees (47.5%) are passed on to customers, meaning travel merchants incur a significant charge which has already been ruled as restricting or distorting competition and therefore unlawful. The ruling followed two trials


in a complex set of proceedings against Mastercard and Visa seeking repayment of the multilateral interchange fees (MIFs) which the card schemes require merchants to pay ‘acquiring’ banks in return for accepting card payments. One trial considered the class-


action claimants’ allegation that the fees are passed on to retailers in higher merchant service charges, and a second considered a claim by the card schemes that retailers pass on the fees to customers “by way of higher prices”. The CAT has already ruled that the


schemes “prevent, restrict or distort competition”, issuing a judgment in June last year following a trial in March. The latest proceedings were to assess the potential damages.


Continued on page 46 travelweekly.co.uk


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PICTURES: Shutterstock/In Green, olgsera


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