Skip to content

News

Amazon to ban Visa credit cards in the UK

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn

Amazon UK is to stop accepting credit cards from Visa, blaming the ban on the ‘high cost of payments’.

The move, which will take affect from 19 January, will exempt purchases made with Visa debit cards.

Informing customers of the move, Amazon declared it had taken the decision due to “high fees Visa charges for processing credit card transactions” on its UK cards.

A spokesperson told Sky News: “The cost of accepting card payments continues to be an obstacle for businesses striving to provide the best prices for customers. These costs should be going down over time with technological advancements, but instead they continue to stay high or even rise.”

Visa has moved to take advantage of Brexit to raise interchange fees on cross-border transactions between the UK and EU. Prior to Brexit, UK merchants and card holders benefitted from a 0.3% cap on credit card interchange fees imposed by the European Commission.

But with the country withdrawing from Europe, Visa is increasing the fees for online and over-the-phone purchases to 1.5%. For debit card transactions, the rate will go up from 0.2% to 1.15% in January, inline with similar moves from Mastercard.

Amazon customers who use a Visa credit card as their default payment option have been advised by the online giant to switch to another card.

Visa expressed disappointment at Amazon’s threat to “restrict consumer choice in the future”.

“When consumer choice is limited, nobody wins,” a spokesperson says. “We have a long-standing relationship with Amazon, and we continue to work toward a resolution, so our cardholders can use their preferred Visa credit cards at Amazon UK without Amazon-imposed restrictions come January 2022.”

In the last few months Amazon has introduced surcharges on customers using Visa credit cards in Singapore and Australia, again citing Visa’s high fees. Given the scale of Amazon, Visa may be forced to yield if the e-commerce giant extends the policy across its global locations.

Peering ahead, a larger threat to Visa’s business could come in the form of Open Banking, giving Aamazon the opportunity to cut out payment cards altogether by introduing account-to-account payments that plug directly into consumer bank accounts.

Source: Finextra
Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn

Related Posts

What’s happening with the FCA and AML?

With the change in the anti-money laundering (AML) supervisory approach of the Financial Conduct Authority (FCA), many firms are nervous about whether they will face FCA scrutiny and what to
Read More >

Reminder: Consumer Duty board reports due 31 July 2024

As the one-year mark of the Consumer Duty’s implementation approaches, firms are reminded that the first board reports on Consumer Duty implementation and outcomes are due by 31 July 2024.
Read More >