Beyond the Transaction: Every Transaction Has a Story

Consumer collective action – Mastercard’s view

By Mark Barnett

Some of you may have seen headlines recently about Collective Action lawsuits and claims for very large numbers. While that may be good for attention grabbing headlines, the facts sometimes don’t easily fit into a few words or 140 characters. Here we aim to help clarify things.

Our business is to power the way you pay everyday – in-store, online and everywhere. To do this, we’re constantly investing in and deploying the best technology that keeps your payment safe and secure, while making the experience as convenient as possible.

We know people want to get a good deal every time they spend, and to do so with the confidence that their payment will always be made. Rewards and loyalty programs provide consumers with real added value beyond just the purchase they make and have the peace of mind of being protected should something go wrong.

Consumers in the UK have access to some of the most developed and innovative payments options anywhere in the world, giving everyone real choice in how they wish to pay. Our cardholders benefit from technology like contactless payments and the latest mobile payment solutions. We also partner with transport networks, like Transport for London and MerseyRail, to make payments in everyday travel easier than ever before.

Of course, there are costs to making a payment. In our system, those costs are shared by those who benefit from the payment. The retailer, the retailer’s bank, the card issuing bank and Mastercard all contribute towards the cost of our network. Together the full value of our technology is obtained at a much lower cost than could be achieved if everyone paid individually.

Cash is an alternative, but it’s no solution for online purchases and isn’t cost free either. Shops must pay people to handle and count cash before securely holding and transporting it to a bank. Yet, that is simply seen as a basic cost of doing business.

So why are people writing about lawsuits? A case has been filed against Mastercard for damages linked to a European Commission ruling in 2007 which applied to fees on cross-border transactions within the EU, but making any comparison to domestic UK fees and costs being passed onto UK consumers is as different as apples and oranges. However, now that the claim has been filed, we will take our time to study it in detail.

In the United States, class action lawyers have attempted to bring almost identical claims for damages supposedly suffered by consumers due to interchange fees. Virtually all of those cases were thrown out by the courts. This is not surprising because consumers derive enormous benefits from our payment technology, both here in the UK, and across the globe.

Mark Barnett is Division President, United Kingdom and Ireland for MasterCard.