Two of the world's largest payment networks, Visa and Mastercard, have agreed to pay a combined sum of £1.2 billion to settle a long-running legal battle in the UK. The lawsuit alleged they imposed unfair fees on cash machine operators, which were ultimately passed on to consumers.
The Core of the Legal Dispute
The legal action, which was a collective proceedings claim brought on behalf of UK consumers, centred on the fees charged for using an ATM. The claim argued that Visa and Mastercard set excessive interchange fees for cash withdrawals at machines not operated by a customer's own bank. These so-called "foreign ATM" fees were allegedly anti-competitive, inflating the cost for consumers every time they used a cash machine outside their bank's network.
The lawsuit claimed that these practices violated competition law, leading to higher charges for millions of people over a period spanning more than a decade. While the payment giants did not admit to any liability, their decision to settle for such a substantial figure marks a significant development.
Details of the Landmark Settlement
The settlement, which received preliminary approval from the Competition Appeal Tribunal (CAT) on 19 December 2025, involves a total payout of £1.2 billion. This sum is intended to compensate an estimated 46 million eligible adults across the United Kingdom.
To receive a payment, individuals do not need to have kept old bank statements or receipts. Eligibility is based on being a UK resident over the age of 18 who used a Visa or Mastercard debit, credit, or prepaid card to withdraw cash from a non-bank ATM between 1 October 2007 and 25 January 2018. The claim was spearheaded by legal representatives from Harcus Parker Limited and Eversheds Sutherland.
What Happens Next for Consumers?
The settlement is now moving into its next phase. A detailed notification campaign will be launched to inform the public about the claims process. Eligible consumers are expected to be contacted directly, and a dedicated claims website will be established.
It is crucial to note that this is an opt-out settlement. This means that most eligible individuals will be included automatically and do not need to take any immediate action to be part of the compensation pool. However, they will retain the right to opt out if they choose to do so. The final approval hearing for the settlement is scheduled for July 2026.
Broader Implications for the Payments Industry
This settlement represents one of the largest consumer redress packages in UK legal history and sends a strong signal about the scrutiny of fees in the financial sector. While the case focused on historical practices, it underscores ongoing regulatory and public interest in ensuring fair and transparent pricing for essential financial services.
The outcome may also influence how interchange fees and other network charges are structured and disclosed in the future, potentially leading to greater consumer protection in the rapidly evolving digital payments landscape.
