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Visa and Mastercard will face additional legal challenges regarding the fees they charge retailers for processing card transactions.

These new collective lawsuits were able to move forward on behalf of merchants due to a London tribunal's permission. Per Reuters, the lawsuits are related to multilateral interchange fees, which retailers have to pay when customers use cards for purchases.

It's also not the first legal action against Visa and Mastercard as it is set to join the existing ones. This time, these new lawsuits, initiated by the particular purpose vehicle Commercial and Interregional Card Claims in 2022, seek damages for alleged merchant overcharging.

The Competition Appeal Tribunal, coordinating the existing cases, had initially declined to certify the new lawsuits under the UK's collective proceedings regime, comparable to class actions in the United States. However, the tribunal has now ruled that the cases can be certified, pending any representations from other interested parties.

For context, hundreds of claimants are suing Visa and Mastercard at the tribunal, which is managing the cases collectively.

Visa and Mastercard Overcharged Fees

The "overcharged fees" refer to allegations that these payment processors have charged excessively high multilateral interchange fees (MIFs) to retailers for processing card transactions.

Merchants claim that these fees paid to the card-issuing banks are set unreasonably high and constitute anti-competitive behavior, resulting in increased business costs.

If legal actions initiated are successful, these lawsuits could lead to substantial damages for Visa and Mastercard. However, merchants will reap the benefits since it can potentially force them to reduce these fees.