A row broke out today between Amazon and Visa over the use of credit cards on the internet giant’s website.
Amazon today announced it will stop accepting payments from UK-issued Visa credit cards, citing the high cost imposed by the card company.
An email to customers said: “From 19th January 2022 we unfortunately will no longer accept Visa credit cards issued in the UK, due to the high fees charged by Visa for processing credit card transactions. credit.”
Customers have been prompted to update their payment options.
Amazon said: “The cost of accepting card payments continues to be a barrier for businesses trying to provide the best prices for customers. These costs should decrease over time with advances in technology, but instead they continue to remain high or even increase.
The move comes after Visa raised fees last month. The Financial Times reported earlier this year that Visa would increase fees charged on UK-EU transactions by 0.3% to 1.5% from October. Amazon.co.uk is operated by the company’s Luxembourg business, its European headquarters.
So-called ‘interchange’ fees charged by companies like Visa and Mastercard have been capped under EU rules, but Brexit removed that hurdle.
Amazon said: “As the global payments landscape rapidly changes, we will continue to innovate on behalf of customers to add and promote faster, cheaper and more inclusive payment options in our stores around the world. .”
Visa reacted angrily.
He said: “We are very disappointed that Amazon is threatening to restrict consumer choice in the future. When consumer choice is limited, no one wins. We have a long-standing relationship with Amazon and we continue working to find a solution.
The decision to block card payments is a blow for Visa and a result for arch-rival Mastercard. Amazon made it clear that Mastercard, Amex and Eurocard will still be eligible.
James Andrews, personal finance editor at money.co.uk, said: “I hope Visa and Amazon will work out their differences before the ban comes into effect on January 19, but in the meantime it would be wise to check your cards now – and consider upgrading to a Mastercard if you have the option.”
Shares of Visa were down 2% in the pre-market in New York.
Simon Taylor of consultancy 11FS told The Standard: “I think it’s an Amazon negotiation tactic more than anything. I think we’re going to see a lot more. »
Amazon is pressuring Visa around the world. The company introduced a 0.5% surcharge on Visa credit card transactions in Singapore in September and in Australia in October.
Industry experts said Mastercard charges slightly higher fees than Visa. Visa has fewer credit cards than its rival in the UK and Rob Fernandes, chief product officer of payments firm Deko, said Amazon may carry out “A/B testing on the possibility of deactivating credit cards”. credit, tested on a smaller group”.
Roger De’Ath, head of e-commerce at TrueLayer, said: “The news that Amazon will stop accepting UK-issued VISA credit cards should come as no surprise. Merchants continue to be stung by rising card network fees, which drive up transaction costs and directly impact their revenue. »