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• Amazon offered 20 pounds to some customers to update their payment method
• Visa told UK shoppers can use their Visa debit and credit cards at Amazon UK throughout the holiday season
Amazon.com Inc on Wednesday said it would stop accepting payments made via Visa Inc’s credit cards issued in the United Kingdom starting next year.
The e-commerce giant told customers that, from January 19, 2022, onward, the company will no longer accept UK-issued cards “due to the high fees Visa charges for processing credit card transactions.”
Amazon spokesperson told CNBC that card payment cost “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 shares fell nearly 5.8% during the morning trading in New York.
Cost hike
Earlier this year, the U.S. payment giant hiked the interchange fees it charges merchants for processing transactions between the UK and the European Union. However, after Brexit, the EU put a cap on interchange fees, which no longer applies in the UK, allowing card networks to raise their charges.
Another U.S. payment giant Mastercard has also increased its UK-EU interchange fees.
Amazon told its customers that they will still be able to use Visa debit cards and non-Visa credit cards like Mastercard and American Express and offered some of the affected customers a 20 British pounds ($26.86) discount in purchase to encourage them to update their payment method to other credit card or a Visa debit card.
Visa’s position
Visa said it was “very disappointed that Amazon is threatening to restrict consumer choice in the future.”
It also mentioned that the company has a long-standing relationship with Amazon and is trying 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.”
A spokesperson from the payment giant told CNBC that the UK shoppers can use their Visa debit and credit cards at Amazon UK throughout the holiday season.
Amazon also provides Visa cards issued by JPMorgan Chase & Co, giving Prime members cash back on purchases. The card is one of the most widely used co-branded credit cards in the U.S., according to a July 2021 report by Packaged Facts.
Picture Credit: FT