Water Plus Limited, alongside a group of UK-based corporate entities, has launched a damages claim against payment giants Visa and Mastercard in the Competition Appeal Tribunal. Filed under Section 47A of the Competition Act 1998, the legal action targets multiple corporate entities within both card schemes over alleged anti-competitive practices surrounding commercial payment cards. Represented by London law firm Harcus Parker, the claimants argue that the fee structures and operational rules maintained by Visa and Mastercard breached both Chapter I of the UK Competition Act and Article 101 of the Treaty on the Functioning of the European Union.
Central to the lawsuit is the implementation of default Multilateral Interchange Fees on commercial card transactions. These default fees are paid by acquiring banks to card-issuing banks whenever a commercial credit, debit, or prepaid card is processed. The claimants contend that these fees effectively created an artificial price floor for the merchant service charges levied on businesses. While financial institutions are technically allowed to negotiate alternative bilateral rates, standard market practice heavily defaults to these pre-set fees. Without these mandatory rules, the lawsuit claims that acquiring banks would not have faced interchange charges, eliminating the inflated costs ultimately passed down to merchants.
The claim also challenges specific territorial regulations, namely Visa’s Cross-Border Acquiring Rule and Mastercard’s Central Acquiring Rule. These rules require acquiring banks operating outside their home jurisdiction to pay the local interchange rates of the country where a transaction occurs. According to the claimants, this restriction artificially partitioned the European Economic Area into isolated national markets, suppressing cross-border competition and shielding domestic interchange rates from competitive downward pressure.
The claimants are seeking full financial restitution for overcharges incurred from July 2020 through the date of judgment, calculated as the difference between the actual fees paid and a baseline of zero interchange fees. Additionally, the suit demands compound interest and legal costs. Under competition law, the burden of proof rests on Visa and Mastercard to show that their commercial card fee structures qualify for legal exemptions, a threshold the claimants argue cannot be met.
