News & insights

In a hugely significant judgment, handed down by a Competition Appeal Tribunal (CAT) chaired by The Hon Mr Justice Marcus Smith on 27 June 2025, the CAT ruled that the default Multilateral Interchange Fees (MIFs) - the term used for the amount retained when a credit card is used and the issuing bank who manages the account transfers monies to the merchant’s bank, determined by the card schemes (Visa, Mastercard) - are in breach EU and UK competition law.

The Judgment will have a direct impact on anyone who uses a Visa or Mastercard and even more so, on any business that accepts them for payment. The Tribunal was unanimous that the default MIF regimes operated by the card schemes infringe Article 101(1) of the TFEU. As a result, both Visa and Mastercard are liable for breach of statutory duty.

The economic theory that has applied to justify MIFs includes the seminal work of William Baxter (1963) Jnl of Law & Econ. Subsequent work building on this more rigorously involves multiple papers by Tirole, Rochet, Stephen Wright and others. The CAT’s judgment questions the relevance of these economic models that underpin MIFs – claiming that the MIFs in practice are not necessary or efficient. In short, the CAT asserts that MIFs are anti-competitive by design.

These types of considerations are ones under frequent review in the UK, EU and in other international financial environments, by CEPA’s specialist communications, media and payment systems team.