When it comes to how much a retailer must pay a credit card company per transaction is complicated. The card issuer, credit card company and processor all benefit from a per transaction fee and retailers pay different rates based on how the card is processed.
However complicated the process is, the UK Supreme Court, Britain’s highest court, has ruled payment giants Visa and Mastercard were found to be in breach of competition laws and could be required to pay billions in compensation to some of the UK’s top retailers.
The ruling finds the Visa and MasterCard payment card schemes was an unlawful restriction of both European Union and UK competition law.
Kate Pollock, head of competition litigation at law firm Stewarts, which represented Asda, Argos and Morrison’s, told the FT: “The Supreme Court’s definitive finding on liability means that our clients’ claims can now proceed to trial on the issue of the quantum of damages. They look forward to a swift resolution of the matter without further delay.”
The case was originally filed in 1992 by retailers including Sainsbury’s, Morrisons, Asda and Argos against the levy on the retailers when cardholders make a transaction, called default multilateral interchange fees (MIFs). The exact value of the payout will be determined in future court rulings.
Image via Pexels; Article sources: Reuters, Retail Sector, Bloomberg