Millions of shoppers could get up to £70 each after a court ruled historic fees administered by card provider Mastercard were unfair.
The decision comes after a long-running legal case going back almost a decade, brought forward by a former financial ombudsman.
Walter Merricks argued that shoppers were charged higher prices after fees were wrongly levied on transactions made over a 15-year period between 1992 and 2008.
It is not necessary to have owned a Mastercard at any point to be eligible for compensation. Mastercard declined to comment on the court ruling.
Consumers are eligible to claim compensation if they lived in England, Wales or Northern Ireland for at least three months between June 1997 and June 2008, and bought goods or services from UK businesses that accepted Mastercard credit cards.
For those who live in Scotland, the starting point is May 1992.
The entire settlement is for £200m, with £100m ringfenced for consumers who have until the end of this year to claim and if the expected 5% of claimants – 2.5 million people – come forward, then each will receive £45.
If fewer people apply, payments will be capped at £70 per claimant.
Mr Merricks said consumers would soon be able to register to receive a payout by completing an online form.
He launched his claim after the European Commission ruled in 2007 that Mastercard’s “multilateral interchange fees” charged to businesses had infringed competition law since 1992.
The fees were paid by retailers accepting Mastercard payments, rather than by consumers themselves.
But Mr Merricks said that, despite retailers paying the fees, shoppers had lost out due to the charges being passed on through higher prices for goods and services.
He alleged that 46 million shoppers in Britain were overcharged.
Any unclaimed cash is expected to go to the company that funded the lawsuit.
Commenting on the outcome, Mr Merricks said he started this case because “I believed that Mastercard’s fees paid by retailers for processing card transactions had been unlawfully high and virtually all UK consumers had lost out for long periods by paying higher prices than they should have done as retailers passed on those costs”.
