Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@. Skimlinks & other affiliated links are turned on

Search
  • FIRST POST
    • 18cc
    • By 18cc 16th Apr 19, 2:48 PM
    • 1,257Posts
    • 908Thanks
    18cc
    Almost every adult in the UK might get a 300 refund from MasterCard
    • #1
    • 16th Apr 19, 2:48 PM
    Almost every adult in the UK might get a 300 refund from MasterCard 16th Apr 19 at 2:48 PM
    https://www.theguardian.com/business/2019/apr/16/mastercard-court-ruling-paves-way-14bn-class-action


    I'll believe it when i see it.
Page 1
    • Missus Hyde
    • By Missus Hyde 16th Apr 19, 5:51 PM
    • 414 Posts
    • 537 Thanks
    Missus Hyde
    • #2
    • 16th Apr 19, 5:51 PM
    • #2
    • 16th Apr 19, 5:51 PM
    Quite.

    I do believe.

    I do, I do.
    It's a far, far better thing that I do, than I have ever done; it is a far, far better rest that I go to, than I have ever known........Sydney Carton.
    • couriervanman
    • By couriervanman 16th Apr 19, 6:21 PM
    • 129 Posts
    • 212 Thanks
    couriervanman
    • #3
    • 16th Apr 19, 6:21 PM
    • #3
    • 16th Apr 19, 6:21 PM
    More chance of seeing Elvis riding Shergar
    • Ben8282
    • By Ben8282 16th Apr 19, 8:12 PM
    • 2,811 Posts
    • 1,409 Thanks
    Ben8282
    • #4
    • 16th Apr 19, 8:12 PM
    • #4
    • 16th Apr 19, 8:12 PM
    I note that the article actually says 'up to 300'. Where they get this figure from I have no idea.
    I am confused as to why MasterCard have been singled out for this legal action. Why not, for example. Amex whose fees to the retailer were and still are higher.
    I really cant agree with this legal action. Credit and charge card company's have always charged fees to retailers from the very beginning and retailers have absorbed these fees into the their pricing on the basis that accepting the card will get them more custom or prevent the customer from going elsewhere.
    What do the people who are taking this legal action actually want to achieve? To create a situation where no charges are levied on retailers for accepting credit cards? The result of that would be and end to 56 days interest free purchases and interest on purchases from day 1 as the banks have to make money somehow from customers who repay in full every month.
    • bd10
    • By bd10 16th Apr 19, 8:26 PM
    • 77 Posts
    • 38 Thanks
    bd10
    • #5
    • 16th Apr 19, 8:26 PM
    • #5
    • 16th Apr 19, 8:26 PM
    Well, let's see what the settlement number will be like. As it was the case with Volkswagen, the asked amount is extremely likely the amount Mastercard might have to pay. But as other posters rightly pointed out, MC is not the only payment system provider. Will the lawsuit get extended to Visa and Amex? Amex would be the most obvious target as they - albeit smaller market share here - charges the most.
    Expecting MC & Co not to make any money on interchange would be silly. After all, without their payment networks the payment work would look very different. They have and will have to invest into technology to keep improving the network. On the other hand, we have an oligopoly and oligopolistic pricing is less competitive than under perfect competition.
    • Bedsit Bob
    • By Bedsit Bob 16th Apr 19, 8:35 PM
    • 10,578 Posts
    • 57,490 Thanks
    Bedsit Bob
    • #6
    • 16th Apr 19, 8:35 PM
    • #6
    • 16th Apr 19, 8:35 PM
    Credit and charge card company's have always charged fees to retailers from the very beginning and retailers have absorbed these fees into the their pricing on the basis that accepting the card will get them more custom or prevent the customer from going elsewhere.
    Originally posted by Ben8282
    But is it fair that customers who used cash, rather than cards, should have been contributing toward these fees, and effectively subsidising the card users?
    1984 WAS NOT AN INSTRUCTION MANUAL.

    Amount I have so far denied the BBC - 1308

    You can't be a Christian AND a Socialist.
    • Ben8282
    • By Ben8282 16th Apr 19, 8:50 PM
    • 2,811 Posts
    • 1,409 Thanks
    Ben8282
    • #7
    • 16th Apr 19, 8:50 PM
    • #7
    • 16th Apr 19, 8:50 PM
    But is it fair that customers who used cash, rather than cards, should have been contributing toward these fees, and effectively subsidising the card users?
    Originally posted by Bedsit Bob
    I believe yes, They could have used a credit card if they had wanted to.
    • LobsterMemory
    • By LobsterMemory 16th Apr 19, 8:51 PM
    • 121 Posts
    • 72 Thanks
    LobsterMemory
    • #8
    • 16th Apr 19, 8:51 PM
    • #8
    • 16th Apr 19, 8:51 PM
    Merricks said he does not personally stand to make a cut from any court award. “I am paid an hourly rate of 150 for the time I have spent on this,” he said.

    And he's been working on it for at least two years...
    • bd10
    • By bd10 16th Apr 19, 8:55 PM
    • 77 Posts
    • 38 Thanks
    bd10
    • #9
    • 16th Apr 19, 8:55 PM
    • #9
    • 16th Apr 19, 8:55 PM
    @Bob:
    That's a fair point. Customers paying by cash are subsidizing card customers. No doubt and the retailer cannot have a dual-pricing policy based on the method of payment.

    But if we look at Sweden, it's the other way around. They are pretty much cashless now and cash transactions are more expensive to them. Have the Swedes had a lawsuit against the central bank? I just cannot help to feel that this lawsuit is stuck in the past and behind the curve of progress. My humble 2c.
    • zx81
    • By zx81 16th Apr 19, 8:56 PM
    • 21,734 Posts
    • 23,650 Thanks
    zx81
    But is it fair that customers who used cash, rather than cards, should have been contributing toward these fees, and effectively subsidising the card users?
    Originally posted by Bedsit Bob
    Probably not.

    But ironically, as online retail grew and pricing became more granular, with card transactions attracting a fee to cover the costs, everyone shouted about how unfair that was.

    Now we've moved back to a place where everyone contributes to card fees again.
    • Terry Towelling
    • By Terry Towelling 16th Apr 19, 9:19 PM
    • 1,201 Posts
    • 969 Thanks
    Terry Towelling
    I don't think the issue is down to the fee charged to the retailer by his processing bank. Rather I suspect it is down to one of the elements that goes into the setting of that charge. If it were down to the fee imposed by the processing banks the lawsuit would be against them.

    This particular issue is that one of the costs of doing business as a retailer is effectively down to something called the 'interchange fee'. That is a percentage of any credit card sale transaction and it has to be paid by the retailer's processing bank to the card issuing bank - it is not retained by MasterCard - or Visa, for that matter.

    If that interchange fee did not exist, then, yes, there is a chance that prices at the point of sale might be a tiny fraction lower but a Merchant Service Charge (MSC) would still be charged to the retailer by his bank and would still be part of the pricing structure - and I don't think there's any argument over that.

    Were it not for the interchange fee, many credit card issuers would have to make hard choices to continue in business profitably. Almost certainly, cashback cards (which pass some of the interchange fee back to consumers) would not exist.

    If there were no interchange fee, the business case for being a card issuer becomes more shaky and we could end up with fewer cards, less choice and less competition. Worse than that, we could end up with no interest-free period for full payers or see the re-introduction of annual fees, and that means we all end up paying more.

    This is a big deal for the cards industry and it was already rumbling away before I left the industry in 2005.

    On the issue of cash customers subsidising card customers, there may be a grain of truth in that but don't forget retailers pay bank charges for banking cash and cheques and that is also built into their pricing structure.
    • SnowTiger
    • By SnowTiger 16th Apr 19, 9:53 PM
    • 3,658 Posts
    • 2,655 Thanks
    SnowTiger
    The PPI gravy train comes to a halt at the end of August. Lots of claim companies will be sitting around on their hands waiting with a can of spray paint for the next departure.

    I wonder how Mastercard would fund a 14 billion payout? Perhaps by added a fraction of a percent to transactions made in markets not as highly regulated as the UK/EU?
    • Fingerbobs
    • By Fingerbobs 16th Apr 19, 9:58 PM
    • 614 Posts
    • 212 Thanks
    Fingerbobs
    Probably not.

    But ironically, as online retail grew and pricing became more granular, with card transactions attracting a fee to cover the costs, everyone shouted about how unfair that was.

    Now we've moved back to a place where everyone contributes to card fees again.
    Originally posted by zx81
    I think it probably is fair. The charges for accepting card payments are just another business expense that has to be recovered from paying customers. If you go into a shop to buy a packet of crisps, is it fair that you have to subsidise the electricity bill for running the fridges, because you didn't buy something chilled?
    • Takmon
    • By Takmon 17th Apr 19, 11:24 AM
    • 416 Posts
    • 369 Thanks
    Takmon
    But is it fair that customers who used cash, rather than cards, should have been contributing toward these fees, and effectively subsidising the card users?
    Originally posted by Bedsit Bob
    Most people forget there is also a cost to businesses for accepting cash.

    Just look at a supermarket for example:
    They need more expensive tills that have cash drawers etc. This cash needs to be transported to the back room where counting takes place which costs man hours, they have to do extra monitoring to make sure staff don't steal the money. They have to transport it securely to the bank and bring change securely into the business. They have to pay to deposit the money into the bank.

    When you consider the amount of hours and other costs to process cash payments it will be far more expensive than the small fees they pay for card transactions.

    So if anything card payments will be subsiding people who use cash.

    In reality, as Fingerbobs pointed out, businesses have a lot of overheads and all these costs are incorporated into the price of the items they sell so it's all perfectly fair.
    • Terry Towelling
    • By Terry Towelling 17th Apr 19, 12:41 PM
    • 1,201 Posts
    • 969 Thanks
    Terry Towelling
    Just to ram the point home a bit further, to understand what's going on here you have to stop focusing on the fact that retailers build their costs into their pricing structures.

    The issue is the Interchange Fee that sits hidden in the overall costs. It is a fee which passes from Merchant Acquirer to Card Issuer and will undoubtedly form part of the Merchant Service Charge (MSC).

    MasterCard doesn't retain that fee and, whether MasterCard is actually responsible for it is another moot point. Member banks are largely responsible for what goes on in the MasterCard 'club' - although I have heard tell of that power being eroded in recent years - but I can't be sure if this is one of those member-controlled issues or not.

    MasterCard (and Visa - don't know why they aren't included in the action) have long since claimed that the fee is fair value for the extra trade retailers receive and that it compensates card issuers for the risk they take by taking on the debt and guaranteeing payment to the retailer. Given that guarantee and the extra business generated, shouldn't the retailer be bearing that tiny element of the costs themselves by lowering their prices?

    I accept there is a Chargeback structure by which payments may be returned to retailers but that will only happen where they are found to be in breach of 'card scheme' rules, their Merchant Agreement or appropriate consumer legislation (which should be built into their Merchant Agreement). So, as long as the retailer does everything correctly, they get their cash and any risk of the debt going 'bad' or being unpaid if the cardholder 'does a runner' sits squarely with the card issuer.

    I cannot see how anyone can build a court case that categorically shows prices have been higher simply because of this fee, that they would have been lower without it, and that the net result of all this is that competition has suffered. (but that's probably because I'm an idiot)
    • 18cc
    • By 18cc 19th Apr 19, 9:26 AM
    • 1,257 Posts
    • 908 Thanks
    18cc
    https://www.theguardian.com/money/2019/apr/19/so-what-are-the-chances-of-getting-300-off-mastercard

    "The likely outcome? Mastercard will be under intense pressure to make a generous settlement offer before this reaches court – potentially within the next few months. Many think that’s the most likely result now. So will I and millions of others get that 300 cheque? Put it this way, if I were offered 150-200 now but had to relinquish any future claim against Mastercard, I’d probably take the money. But I wouldn’t forgo my claim for much less. This case has legs"
    • NoodleDoodleMan
    • By NoodleDoodleMan 19th Apr 19, 12:34 PM
    • 886 Posts
    • 326 Thanks
    NoodleDoodleMan
    According to a financial journalist on the radio yesterday, Mastercard will appeal and contest the matter down to the wire - which could be a long protracted legal process.
    • oldagetraveller
    • By oldagetraveller 19th Apr 19, 2:18 PM
    • 3,281 Posts
    • 1,779 Thanks
    oldagetraveller
    Fantastic, I have two Mastercard credit cards = 2 x up to to 300 then.
    Hang on, is that a pig I spy flying into the distance?
    R.I.P. U.K. Democracy.
    • 18cc
    • By 18cc 19th Apr 19, 2:25 PM
    • 1,257 Posts
    • 908 Thanks
    18cc
    Its per adult not card ...

    as for pigs

    https://spectrumlocalnews.com/nys/buffalo/news/2016/10/14/emotional-support-animals-flying-on-planes-
    • Terry Towelling
    • By Terry Towelling 19th Apr 19, 2:53 PM
    • 1,201 Posts
    • 969 Thanks
    Terry Towelling
    Presumably only those who were adults during the date range in the court action will be entitled to a payout.

    So, anybody like to hazard a guess at why children aren't included? It has nothing to do with having held a MasterCard; it is solely down to the fact that retailers have been 'forced' to overcharge anyone who has done any shopping during the relevant time span. And what about overseas visitors who happened to buy something? - and businesses? What about dead people whose estates will have suffered due to this horrendous overcharge?

    Visa has not been roped into the action - anyone like to suggest a reason for that? They have an interchange fee too.

    There has to be an ulterior motive behind this action because it sounds ridiculous - obviously I won't say 'no' to any cash though. Presumably it will be tax-free cash and HMRC will be required to pay back the 17.5%/20% VAT they creamed off all these excessively priced sales.
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

3,726Posts Today

7,258Users online

Martin's Twitter
  • Have a great Easter, or a chag sameach to those like me attending Passover seder tomorrow. I?m taking all of next? https://t.co/qrAFTIpqWl

  • RT @rowlyc1980: A whopping 18 days off work for only 9 days leave! I?ll have a bit of that please......thanks @MartinSLewis for your crafty?

  • RT @dinokyp: That feeling when you realise that you have 18 days of work and only used 9 days of your annual leave! Thanks @MartinSLewis h?

  • Follow Martin