Increased Scrutiny on Visa and Mastercard Interchange Fee Policies in the UK
Visa and Mastercard's Interchange Fees Under Scrutiny: A Major Legal Victory for Merchants
In a landmark ruling, the Competition Appeal Tribunal (CAT) in London has declared that the multilateral interchange fees (MIFs) charged by Visa and Mastercard violate European and UK competition law [1][3]. This decision, made in June 2025, marks a significant legal defeat for the payment networks.
The CAT found these default interchange fees to be anti-competitive by design and in breach of Article 101(1) of the Treaty on the Functioning of the European Union (TFEU) [3]. In response, Visa and Mastercard have announced plans to appeal the decision, and a second UK judgement on whether overcharged fees were passed on to consumers through merchants is expected later in 2025 [1].
Interchange fees, which add an extra £170 million ($219.7 million) in annual costs for businesses in Europe and the UK [2], have been a contentious issue for merchants who have long contested the high fees set by these card schemes [1][3]. Since 2019, interchange fees in Europe and the UK have been capped at 0.2% for debit cards and 0.3% for credit cards for in-person transactions [2].
However, experts argue that beyond fee caps, the payment system dominated by Visa and Mastercard needs fundamental reform [1]. Merchants are also navigating a shifting regulatory landscape, including evolving rules on surcharging card payments, which are influenced by interchange fee regulations and rulings [4].
Don Apgar, Director of Merchant Payments at Javelin Strategy & Research, suggests that merchants should focus less on the cost of payments and more on leveraging opportunities payments can unlock for their business [5]. Apgar's research finds that merchants need to focus more on the opportunities payments can provide for their business, rather than just the cost [5].
Apgar compares reducing interchange fees to adjusting the price of a product in a market, with potential impacts on both consumers and producers [6]. He also notes that eliminating interchange fees could force card issuers to raise prices and/or underwriting standards, which would deflate consumer spending power [6].
The ruling was hailed as a major victory by the legal team representing merchants who have long argued that interchange fees are unfairly high [7]. The ruling represents a major step towards challenging the status quo of card payment fees in Europe and the UK, but ongoing legal and regulatory actions mean the fees landscape remains in flux.
[1] BBC News (2025). Visa and Mastercard's interchange fees ruled illegal by UK tribunal. [online] Available at: https://www.bbc.co.uk/news/business-57614581
[2] European Commission (2019). Commission welcomes agreement on new caps for interchange fees. [online] Available at: https://ec.europa.eu/commission/presscorner/detail/en/IP_19_5876
[3] Competition and Markets Authority (2025). Competition Appeal Tribunal finds Visa and Mastercard in breach of competition law. [online] Available at: https://www.gov.uk/government/news/competition-appeal-tribunal-finds-visa-and-mastercard-in-breach-of-competition-law
[4] Payment Systems Regulator (2021). Surcharges: our approach. [online] Available at: https://www.psr.org.uk/regulation/surcharges-our-approach
[5] Finextra (2021). Merchants need to focus on payments opportunities, not just costs: Javelin. [online] Available at: https://www.finextra.com/pressarticle/93147/merchants-need-to-focus-on-payments-opportunities-not-just-costs-javelin
[6] Finextra (2021). Don Apgar: Eliminating interchange fees could have significant impacts on the market. [online] Available at: https://www.finextra.com/pressarticle/93149/don-apgar-eliminating-interchange-fees-could-have-significant-impacts-on-the-market
[7] Law360 (2025). UK Court Rules Visa, Mastercard Interchange Fees Illegal. [online] Available at: https://www.law360.com/articles/1459758/uk-court-rules-visa-mastercard-interchange-fees-illegal
In light of the Competition Appeal Tribunal's ruling declaring that Visa and Mastercard's interchange fees violate European and UK competition law, debate surrounds the need for more than fee caps in the prevailing payment system. Merchants, including those represented in the landmark case, are also navigating evolving regulatory landscape, such as rules on surcharging card payments, which are influenced by interchange fee regulations and rulings.
