- Amazon has told some customers that, from Jan. 19 onward, the company will no longer accept Visa credit cards issued in Britain.
- The e-commerce giant cited high fees charged by the payment processor.
- Visa said it was “very disappointed that Amazon is threatening to restrict consumer choice in the future.”
LONDON — Amazon plans to stop accepting payments made via Visa credit cards issued in the U.K. starting next year.
The e-commerce giant has told some customers that, from Jan. 19 onward, the company will no longer accept Visa credit cards issued in Britain “ due to the high fees Visa charges for processing credit card transactions.”
Visa shares fell 2.5% in U.S. premarket trading.
Visa earlier this year hiked the interchange fees it charges merchants for processing digital transactions between the U.K. and the European Union.
After Brexit, an EU cap on interchange fees no longer applies in the U.K., allowing card networks to raise their charges.
Mastercard has also increased its U.K.-EU interchange fees.
Amazon customers were told they will still be able to use debit cards — including those issued by Visa — and non-Visa credit cards like Mastercard and American Express. Users are being encouraged to update their default payment method ahead of the changes. The news was first reported by Bloomberg.
Visa said it was “very disappointed that Amazon is threatening to restrict consumer choice in the future.”
“U.K. shoppers can use their Visa debit and credit cards at Amazon U.K. today and throughout the holiday season,” a Visa spokesperson told CNBC.
“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 U.K. without Amazon-imposed restrictions come January 2022.”
Amazon blasted Visa for its high card charges. “The cost of accepting card payments continues to be an obstacle for businesses striving to provide the best prices for customers,” a spokesperson for the company told CNBC.
“These costs should be going down over time with technological advancements, but instead they continue to stay high or even rise.”
The move could be viewed as a way for Amazon to get some bargaining power over Visa to lower its fees. The payments firm also charges businesses scheme fees to become part of its network.
While smaller retailers aren’t in a position to negotiate, Amazon — given its size — may have better luck.
Source: Finance - cnbc.com
