London Court Approves Mastercard Settlement in Swipe Fees Class Action
In a significant development for consumers and businesses alike, a London court has approved a settlement in a class action lawsuit against Mastercard over its swipe fees. The Competition Appeal Tribunal (CAT) made this decision on February 21, 2023, rejecting a challenge by litigation funder, Innsworth Advisors, which argued that the settlement undervalued the claim.
Background of the Case
Mastercard, one of the world’s leading payment processing companies, has been under scrutiny for its swipe fees – the charges it levies on merchants for processing credit and debit card transactions. These fees have long been a contentious issue, with critics arguing that they unfairly burden small businesses and consumers.
The Settlement
The proposed settlement, which Mastercard agreed to in December 2022, would provide compensation to around 32 million UK cardholders and 190,000 UK merchants. The exact amount of the payout is yet to be determined, but it could reach up to £14 billion ($18 billion).
Impact on Consumers
If you’re a UK cardholder, this settlement could mean a potential payout for you. The exact amount will depend on your usage of Mastercard between 2004 and 2016, but it could range from a few pounds to hundreds of pounds. The funds will be distributed via a claims process, which is yet to be announced.
Impact on Merchants
For merchants, the settlement could mean a refund of some of the swipe fees they paid to Mastercard between 2004 and 2016. The exact amount will depend on their individual transaction volumes during that period. This could provide a much-needed financial boost to small businesses, many of which have been struggling due to the economic downturn caused by the Covid-19 pandemic.
Impact on the World
The Mastercard settlement is being closely watched around the world, as similar lawsuits are ongoing in other countries. This includes the US, where Visa and Mastercard are facing similar antitrust lawsuits. The outcome of these cases could have far-reaching implications for the payment processing industry and could lead to significant payouts for consumers and merchants in those countries as well.
Conclusion
The London court’s approval of the Mastercard settlement is a victory for consumers and merchants in the UK, who have long been frustrated by the high swipe fees charged by the payment processing giant. The exact amount of the payout is yet to be determined, but it could reach up to £14 billion ($18 billion), providing a much-needed financial boost to millions of individuals and businesses. This development is also being closely watched around the world, as similar lawsuits are ongoing in other countries. The outcome of these cases could have significant implications for the payment processing industry and could lead to similar payouts for consumers and merchants in those countries as well.
- London Court Approves Mastercard Settlement in Swipe Fees Class Action
- Compensation for UK Cardholders and Merchants
- Potential Payments Ranging from a Few Pounds to Hundreds of Pounds
- Impact on Small Businesses
- Wider Implications for the Payment Processing Industry
