It has been reported that claimants had been seeking £10 billion in compensation for alleged overcharging over several years.
Mastercard was facing a lawsuit brought by consumer champion Walter Merricks on behalf of approximately 46 million adults in the UK, and the case became the first mass consumer action to be approved in the country in 2021 after five years of exploration by the Competition Appeal Tribunal (CAT) and the UK Supreme Court.
As reported by Reuters, a Mastercard spokesperson said in a statement that they are "pleased to have reached an agreement in principle to put this case behind us." Merricks adds: "I am very pleased that after nearly nine years of litigation with Mastercard, I have agreed a settlement that I believe will deliver meaningful compensation to class members who choose to come forward to participate in the distribution of the damages."
Mastercard and Visa accounted for around 95% of all debit and credit card payments in the UK in 2024, and earlier this year, the Payment System Regulator (PSR) stepped back from imposing financial penalties despite evidence that the firms are running an effective duopoly in the supply of services to merchants.
The watchdog's market review into card sheme and processing fees concluded that there is currently "no effective competition preventing the two biggest schemes raising prices" and that the supply of services to merchants is "not working well".
At the time, the PSR also found that over the past five years, and after taking account of volume changes, Mastercard and Visa have increased their scheme and processing fees by more than 30% in real terms. "There is little evidence that the quality of service has improved at the same rate," said the PSR.