Between 1992 and 2008 British shoppers allegedly paid inflated prices for goods and services because the provider charged stores unlawfully high fees for processing debit or credit card payments, according to the lawsuit.
The claim is being led by former financial services ombudsman Walter Merricks and was filed at the Competition Appeal Tribunal (CAT) in London under the new Consumer Rights Act 2015.
Now all UK consumers – and anyone who lived here over the 16 years – will automatically become a part of the group of claimants.
If it’s successful it could mean payouts for 40million people.
But Mastercard has said it intends to “vigorously” oppose the claim.
Mr Merricks has instructed US-based law firm Quinn Emanuel to handle the claim.
He said: “MasterCard charged billions of pounds of unlawfully high fees for its sole benefit and to the detriment of consumers. It has already been found to have broken competition law, the basis of which was to protect consumers, and that cannot be disputed.
“The filing of this claim is the first step towards consumers obtaining compensation for what MasterCard did. I am confident that the CAT will authorise the claim to go forward, and I look forward to the opportunity to present our case.
“This is a watershed moment for consumer redress in this country.”
In 2014 the European Court of Justice declared that the so-called interchange fees were a violation of EU antitrust rules.
And in December last year fees were capped at 0.2 per cent for debit cards and 0.3 per cent for credit cards.
Boris Bronfentrinker, a partner at law firm Quinn Emanuel, said: “MasterCard has itself argued before English courts that any unlawful charges were passed on to consumers by retailers when trying to defend itself in cases brought against it by retailers.
“Despite arguing that consumers bore the cost of its illegal fees, MasterCard has made no efforts to try to compensate consumers through new voluntary compensation mechanisms.”
MasterCard said: “Now that the claim has been filed, we will take time to review it in detail, however we continue to firmly disagree with the basis of this claim and we intend to oppose it vigorously.
“We deliver real value through the benefits of security, convenience and consumer protection, and we are committed to investing in our payment services in order to continue to meet the rapidly evolving needs of all our customers.”