In June 2025, the UK Competition Appeal Tribunal (CAT) unanimously held that Visa and Mastercard’s default multilateral interchange fees (MIFs) violate both UK and EU competition law.
For the first time, the CAT found MIFs to be unlawful by object, meaning they are inherently anticompetitive—even without evidence of actual harm. The ruling applies broadly, including to commercial card and inter-regional MIFs that had not previously been regulated.
The tribunal clarified that regulatory thresholds or caps—such as those under the Interchange Fee Regulation (IFR)—do not remove the anticompetitive nature of the MIFs.
Whilst the decision is significant for merchants who have been paying excessive interchange fees, Visa and Mastercard plan to appeal.
Next Steps in the Legal Process
This ruling is the first of three trials in the ongoing ‘Umbrella Proceedings’.
- Trial 2 (completed late 2024/early 2025) focused on whether MIFs were passed on from banks to merchants and then to consumers. Judgment is pending and will likely affect how damages are calculated.
- Trial 3 (upcoming) will determine if Visa and Mastercard can rely on an Article 101(3) exemption (pro-competitive justification).
Appeals by both card schemes could significantly delay the final resolution and any potential payouts.
Implications for Retailers
This decision reinforces regulatory momentum to challenge high interchange fees and reduce retailers’ payment processing costs. The ruling establishes a foundation to challenge the legality of interchange fees, particularly those not constrained by regulation, and opens potential pathways to compensation in the future and could lead to behavior change by the card schemes on acquirer /processing fees.
Retailers should consider how they might evidence processing fees and interchange rates from acquirers and maintain internal financial records showing transaction values and card acceptance patterns to help quantify losses.
The PSR has confirmed that the ruling does not impact the current market reviews into cross-border interchange fees and scheme and processing fees. Any impact of the ruling is likely some way off, given that additional trials are still to be heard and the appeals process will take time. However, the ruling further strengthens the case that the current card fees market is unfair and provides retailers with a potential foundation to challenge the legality of interchange fees and seek redress.
We will monitor developments closely and keep you updated on the practical implications as they emerge.
