Amazon has announced that starting January 19th, it would no longer accept Visa credit cards issued in the United Kingdom.
It cited hefty credit card transaction fees as the reason for the change but said Visa debit cards would still be accepted.
Visa expressed its dissatisfaction with Amazon’s promise to limit consumer choice in the future.
“The expense of accepting card payments remains a hurdle for businesses aiming to give the best pricing for customers,” Amazon added.
Costs should be decreasing over time owing to technological advancements, according to the online store, “but instead they continue to stay high or even climb.”
The argument, according to an Amazon spokesperson, stems from Visa’s “quite egregious” price increases over a number of years with no added value to its service.
Amazon is providing £20 to Prime members who convert from Visa to a different payment method, and £10 to everyone else.
In a statement, Visa said it was “Amazon’s promise to limit consumer choice in the future has me extremely disappointed. Nobody gains when customer choice is constrained.”
It stated it had a “long-standing partnership with Amazon” and was working to rectify the issue so that consumers in the UK could use Visa credit cards.
Amazon would not specify how much Visa charges the business to handle credit card transactions.
Visa likewise declined to comment, despite the fact that it claims to take less than 0.1 percent of a purchase’s value on average.
‘A thud’
Any charge changes, according to Amazon and Visa, have nothing to do with Brexit.
Following Brexit, both Visa and its competitor Mastercard increased the so-called interchange fee on cross-border transactions between firms in the United Kingdom and the European Union.
The disagreement between Amazon and Visa concerns the fees that Visa charges Amazon for its services in the United Kingdom.
This squabble between two titans of industry is now being played out in front of their customers.
Visa fees, according to Amazon, are high and a barrier to consumers getting inexpensive costs. Visa claims that its fees are competitive, have no impact on prices and that when choices are limited, no one wins.
Whether this dispute is about pricing or is merely a smokescreen is virtually irrelevant to customers who use these services. They’re only aware that they may have to alter their Amazon payment methods.
However, time is crucial. When individuals purchase for Christmas on Amazon on a daily basis, these signals to customers hit home even more.
But it also indicates that a settlement can still be found before January 19.
Amazon to stop accepting Visa credit cards from January next year. A challenge when such a big retailer decides to stop accepting payments…. Aiming to bring fees down? pic.twitter.com/vHYUkChO4K
— Steve Dresser (@dresserman) November 17, 2021
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The change “will come as a blow to the millions of Britons” who use Visa credit cards, including Barclaycard and HSBC customers, according to James Andrews, the senior personal finance editor at comparison website Money.co.uk.
“With many UK businesses rejecting American Express, individuals hoping for rewards on their spending or attempting to split the cost of purchasing with a 0% purchase card on Amazon will effectively be compelled to choose a Mastercard,” he said.
He went on to say that Amazon’s rewards card is “powered by Mastercard.”
“It’s really important that customers have the choice, and the largest variety of ability to pay, whether it’s through cards, bank accounts, or cash,” said Ann Cairns, executive vice chairman of Mastercard.
“Obviously, we are two large worldwide businesses, and Amazon is one of our top customers around the world, so we talk to Amazon all the time.”
In a tweet, retail researcher Steve Dresser speculated that Amazon’s move could be aimed at lowering Visa costs.
