Amazon says it’s considering dropping Visa as partner on US co-branded credit cards
Visa is expected to settle a credit card fee dispute with Amazon.com Inc in the UK and hopes to continue a co-branded credit card partnership with the US e-commerce giant The company’s chief financial officer told Reuters.
Amazon said on Wednesday that it will stop accepting Visa credit card payments in the UK from mid-January next year.
“We have dealt with these things in the past and I believe we will deal with them in the future,” Vasant Prabhu said in an interview on Friday, adding: “We expect that to be. there’s a solution so UK consumers aren’t affected.”
Visa shares pared losses after Reuters reported Prabhu’s comments, falling from 1.4% on the day to 0.5% lower. Shares that have since delivered those gains and were last traded were down 1.4%.
Amazon said in a statement Wednesday that credit card fees will “decrease over time with technological advancements, but instead they continue to stay high or even increase.”
Its stance could be a negotiating tactic, analysts say. In the past, other major retailers have settled fee disputes with Visa after announcing they would be phasing out credit cards in narrow segments of their businesses.
For example, Walmart Inc’s 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.
Prabhu said Wednesday’s reports suggesting the dispute was the result of an EU-enforced limit on fees that no longer applied in the UK after Brexit were “totally incorrect.”
That rule applies to cross-border transactions between the EU and the UK, while the dispute concerns domestic transactions, he said.
In recent months, Amazon has also imposed surcharges on Visa credit card customers in Singapore and Australia, citing the high fees, as the relationship between the two companies appears to have deteriorated.
Some analysts have expressed concern Amazon’s move in the UK could set the stage for the retailer to drop Visa credit cards in other territories, something Prabhu said he hopes won’t. reality.
“Limiting consumer choice is not helping merchants either,” Prabhu said. “If a merchant tells me I can’t use my preferred card, it’s not useful to me as a consumer.”
Amazon also said it was considering dropping Visa as a partner for US co-branded credit cards and was discussing this with both Mastercard and Visa.
Visa said it is still in discussions about continuing to work with Amazon and hopes that it will.
“We hope to get to the point where our relationship with Amazon is back to normal,” Prabhu said.
