Mastercard and Visa face £4bn lawsuits over multilateral interchange fees on UK businesses

Class representatives are seeking damages from Mastercard and Visa of over £4bn on behalf of businesses across the UK. The Competition Appeal Tribunal has given the go-ahead for the collective action that could see businesses compensated for the unlawful multilateral interchange fees (MIFs) set by Mastercard and Visa that applied to transactions involving commercial cards in the UK. 

The claim alleges that businesses that received payments by commercial cards paid fees much higher than they should have been, causing them significant losses. The claim period runs from June 2016 to June 2022, with damages continuing to accrue until the date of judgment or settlement. 

The Competition Appeal Tribunal (the "Tribunal") ordered that the claims, brought by the Class Representatives, Commercial and Interregional Card Claims I & II Limited, be certified, enabling the Class Representatives to seek compensation for businesses across the UK for the unlawful fees they paid.

The Tribunal dismissed Mastercard's and Visa’s objection to the claims being certified, ruling that the cases can proceed as collective actions. A deadline for involvement in these claims has been set by the Tribunal and businesses are encouraged to register their interest now to stay updated on developments in the proceedings and, if successful, to claim their share of any damages awarded.

MIFs are paid by businesses through fees paid to their acquiring banks upon the acceptance of a commercial card transaction. The losses suffered by businesses throughout the UK are estimated to be at least £4bn.

UK businesses in the travel, hospitality, and retail sectors have been particularly hurt by multilateral interchange fees and this claim has been endorsed by trade bodies including UK Hospitality and the Association of British Travel Agents (ABTA).

“Although in relation to different types of MIFs, both the UK Supreme Court and the Court of Justice of the EU have condemned similar practices engaged in by Mastercard and Visa,” commented Jeremy Robinson, a partner at Harcus Parker Limited, representing the Class Representatives. “Holding global corporate giants to account through class action litigation is the best way to ensure the likes of Mastercard and Visa do not go on imposing unfair charges on businesses.”

 

Digital money on the uptick as traditional and digital assets converge - Citi

With the ongoing commercialisation of distributed ledger technology (DLT) and digital assets, the use of digital money going beyond central bank digital currencies (CBDCs) is set to increase significantly, according to Citi’s latest and fourth edition of its Securities Services Evolution whitepaper series.

Two-thirds (65%) of respondents plan to use non-CBDC options like stablecoins, tokenised deposits, money market funds, and digital payment systems to support cash and liquidity requirements for digital securities settlements by 2026, versus 15% who plan to use CBDCs. This is a stark contrast to the previous year, when CBDCs were the preferred form of digital money at 52%.

The whitepaper polled close to 500 market participants encompassing buy- and sell-side institutions, incorporates qualitative insights from 14 financial market infrastructures (FMIs) and for the first time, includes an in-depth regional view of the industry across Asia Pacific, Europe, North America, and Latin America.

The whitepaper also found that digital adoption is happening at different speeds. Asia Pacific and Europe are driving the commercialisation of DLT and digital assets, with 48% and 46% of respondents, respectively, actively pursuing initiatives. 

Tokenisation is ready for action, while native digital issuance will take longer. Some  62% of sell-side respondents are focusing their DLT and digital asset efforts on the tokenisation of various asset classes, including public and private assets, versus 8% for natively digital security issuance. 

Private networks are preferred by the sell-side, with 64% of sell-side respondents expecting to use private networks (managed by banks, technology companies and FMIs) as the tokenisation of assets gain momentum. However, on the buy-side, asset managers are focusing on public blockchains for fund tokenisation and distribution opportunities. 

On the settlements side, T+1 was more impactful than expected. 44% of total respondents cited a significant impact from T+1 going live, higher than 28% in 2023. Relative to other regions, European respondents were most impacted with 60% indicating significant impact.

Securities lending remains one of the most strongly impacted activities. Half (50%) of respondents (compared to 33% from last year) saw the most impact on securities lending followed by funding requirements at 49% (versus 31% last year). Some 40% expect real-time, atomic settlement within the next decade, with Asia most bullish at 42%.

 

Siemens issues €300m digital bond on blockchain

Siemens has again issued a digital bond in accordance with Germany’s Electronic Securities Act (Gesetz über elektronische Wertpapiere, eWpG), having issued its first digital bond last year.

By using blockchain technology once again, Siemens says it is underscoring its claim to develop digital solutions for the financial markets continuously. In issuing the bond, the company is supporting the trials by the Eurosystem and the Bundesbank in particular, that are aimed at testing blockchain technology for the digital financial market.

The current bond has a volume of €300m and a maturity of one year. The securities transaction was settled via the private permissioned blockchain of SWIAT and the trigger solution provided by the Bundesbank, making it possible to settle a Siemens bond for the first time in a fully automated manner within minutes and in central bank money. In the transaction, Siemens leveraged its experience with last year’s first-time €60m digital bond issuance, which still required a two-day settlement period. As a result, this time, the settlement risk was almost fully eliminated for all parties involved. 

DekaBank acted as the transaction's bond registrar. BayernLB, DekaBank, DZ BANK, Helaba and LBBW invested in the securities. Deutsche Bank ensured settlement for Siemens in central bank money via the Bundesbank trigger solution.

“Automated processing within a few minutes shows the enormous potential of this new technology and confirms our strategy of playing a leading role in continuously shaping the digital transformation,” said Peter Rathgeb, Corporate Treasurer of Siemens AG. “We are proud to be an active driver of further developments in this area and of the further digitalisation of the capital markets.”

 

J.P. Morgan Asset Management adds treasury management capabilities to investment platform

J.P. Morgan Asset Management has announced an enhancement to its Morgan Money platform, a short-term investment management solution with over US$300bn in assets under management (AUM), through a collaboration with Kyriba. This integration aims to streamline liquidity management processes, enhance the management of critical trading and accounting workflows, and provide real-time visibility into cash flow balances. Morgan Money and Kyriba customers now have access to these integrated features.

This new capability is designed to offer customers improved cash visibility and forecasting, delivering a seamless and comprehensive cash management experience. This will enhance operational efficiencies across automated and self-directed cash management, payments, and investments.

“Treasury teams are increasingly demanding greater efficiency and seamless execution, whether it involves cash visibility or trade processes,” said Edi Poloniato, Global Head Banking Channel & Working Capital Solutions, Kyriba. “Together with J.P. Morgan Asset Management, we are introducing our clients to a dynamic process for managing liquidity and providing a resource for them to improve their liquidity performance.”

 

Lloyds Bank partners with Cleareye.ai to provide trade finance tech solutions

Lloyds Bank has partnered with Cleareye.ai, using AI to streamline the processing and compliance checking of trade finance documentation to drive efficiencies for clients. Cleareye.ai’s ClearTrade technology will be implemented by the bank from this month. The technology will use optical character recognition (OCR), machine learning, and natural language processing algorithms to extract critical information from trade documentation. This includes digital and paper-based import and export documentary letters of credit, documentary collections, undertakings and trade loans.

The AI-powered technology will also conduct automated examinations of documents - in line with the International Chamber of Commerce Rules for Documentary Credits and Collections - as well as critical compliance checks, including trade-based money laundering (TBML) checks.

“We’re continually looking for ways to help our clients trade simpler, faster and more efficiently and our partnership with Cleareye.ai enables us to deliver this,” said Rogier van Lammeren, head of trade and working capital products at Lloyds Bank Commercial Banking. “Using their AI technology, we will streamline critical parts of trade finance processes that we know are important to our clients.”

 

U.S. Bank now offering CSD functions for securities issued in France

U.S. Bank has announced it will now support debt capital market transactions for clients who issue securities in the French central securities depository (CSD) operated by Euroclear France.

U.S. Bank Global Corporate Trust has offered issuing and paying agency services for commercial paper and medium-term notes, standalone corporate bonds and structured finance in international markets for more than 12 years. 

With this new capability, U.S. Bank can now offer these services in Euroclear France CSD. In addition, by establishing the infrastructure that supports the TARGET2-Securities (T2S) platform, the bank will be able to add more European CSD markets in the future.

U.S. Bank offers investment services solutions from three European locations in Ireland, Luxembourg and the United Kingdom.

 

Mitigram and Fides look to make global trade finance seamless

Mitigram has partnered with Fides, becoming their trusted partner for trade finance supply. The partnership aims to enable clients to digitalise their trade finance operations, centralising and simplifying global multi-bank connectivity and transaction communications, thereby helping them expand their global trade through streamlined transactions. It will also accelerate the onboarding of corporate clients onto the digital trade platform as the already high demand is rising.

Clients will be able to connect with Swift, allowing access to multiple banks and the set-up of bank identifier codes for multi-bank connectivity. The treasury management systems and enterprise resource planning connectivity services will help corporations and banks further streamline their communications with customers and external counterparties. This collaboration will provide customers with access to the best possible digital trade finance platform for export finance, reducing friction and ensuring businesses can trade freely.

“The collaboration with Fides will help customers streamline their internal and external communications and enable multi-bank connectivity, increasing transparency between banks and corporates in the trade finance ecosystem,” said Pedram Tadayon, CEO at Mitigram. “In particular the commodity and manufacturing industry is currently driving digitalisation and the need to improve connectivity and access to data, helping build trust and communities between customers and financial institutions.”

 

UNIPaaS and American Express to boost B2B card payments for SaaS platforms

UNIPaaS has announced a partnership with American Express that aims to enable more small and medium-sized businesses (SMBs) to offer their customers the option of paying invoices with Amex Cards through its platform.

UNIPaaS powers software-as-a-service (SaaS) platforms’ payment services with a white-labelled, fully managed solution, allowing them to offer a unified and seamless acceptance of all relevant payment methods to their users. SMBs using UNIPaaS receive generative AI recommendations based on their transaction history to determine which payment methods they should offer their customers to drive faster and more efficient payments.

Customer behaviour shows that when payment options like American Express are offered, a significant share of customers choose this payment method, thereby increasing the speed and efficiency of business invoice payments.