Amazon stops accepting Visa credit cards in UK because of payment dispute, may also remove Visa as US partner
Amazon is considering dropping Visa as a partner on US co-branded credit cards after previously confirming it would stop accepting Visa credit cards in the UK as payment disputes intensify.
The e-commerce giant is in talks with several payment networks including Mastercard, American Express and Visa as part of a standard process to review co-branded credit card deals, a spokesperson said. .
Visa declined to comment on the co-branded card. Mastercard and American Express did not respond to requests for comment.
Before that, shares of Visa closed 4.7% lower after Amazon said it would stop accepting Visa credit card payments in the UK from January 19, 2022. In a statement, it said such fees would “decrease over time with technological advancements, but instead they stay high or even rise.”
In recent months, Amazon has imposed surcharges on Visa credit card customers in Singapore and Australia, citing the high fees as a result of deteriorating relations between the two companies.
Since the UK’s withdrawal from the European Union, the EU-enforced limit on fees charged by card issuers no longer applies in the UK, meaning suppliers are free to increase fee.
Last month, Visa started charging 1.5% of the transaction value for credit card payments made online or by phone between the UK and the EU and 1.15% for transactions. transactions by debit card, increased from 0.3% and 0.2% respectively.
Industry-wide average credit card processing fees range from 1.5% to 3.5% per transaction, according to analysts.
In the past, retailers have accepted the processing fees of major credit card companies as the cost of accessing their huge network of card users, analysts say, but that could change. .
The move marks an “important turning point in the payments industry,” said Laura Hoy, equity analyst at Hargreaves Lansdown.
“Ultimately, we think Amazon has the edge in this chicken game – whether the customer uses its own payment system or Visa gives in and lowers their fees, it’s a win for the guy.” retail giant,” Hoy said.
Other major retailers have previously settled fee disputes with Visa after announcing they would be phasing out Visa credit cards in narrow segments of their business.
Walmart’s For example, the Canadian unit said in 2016 it would stop accepting Visa credit cards after it was unable to reach agreement on fees. Seven months later, the companies said they had resolved the issue after about 20 stores stopped using Visa cards.
Amazon says customers can still use Visa, Mastercard, Amex and Eurocard debit cards in the UK.
Visa said in a statement that it was “disappointed that Amazon is threatening to limit consumer choice.”
Visa added: “We continue to work towards a solution, so our cardholders can use their preferred Visa credit card at Amazon UK without the restrictions imposed by Amazon. booked as of January 2022”.
Shares of rival Mastercard fell 2.8% on Wednesday. Amazon shares rose 0.2%. American Express shares closed 0.7% lower.
The British Retail Consortium says other UK retailers face higher fees for cross-border payments, following Britain’s departure from the European Union.
© Thomson Reuters 2021
