Amazon will stop accepting payments from Visa credit cards issued in the UK from January 19th, 2022. Customers can still use Visa debit cards issued in the UK, as well as credit cards issued by MasterCard, American Express, and other firms.
Amazon is blocking UK credit cards from Visa due to an ongoing conflict over “interchange” fees, levies imposed by card issuers to a merchant’s bank for every transaction. Visa’s interchange fees for transactions between the UK and the European Union, where Amazon UK processes payments, were earlier capped at 0.3 percent as per EU law. However, since the UK left the EU, Visa can hike that fee to 1.5 percent.
It isn’t clear why VISA is being singled out by Amazon.
But Visa isn’t the sole company to make such a change. MasterCard made a similar increase to its interchange fees before Visa. However, it hasn’t been blocked by Amazon. It isn’t completely clear why Visa has been singled out. It may be due to a strategic decision on Amazon’s part of hurting one company rather than taking on an entire industry. Or there could be particular complications in Visa’s payment policies. It has been found that the company has increased interchange fees for e-commerce sites while decreasing fees in other areas, such as education and real estate purchases. It isn’t clear whether policies from MasterCard or other card issuers make similar distinctions.
In an official statement from Amazon, the company said:
“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. As a result of Visa’s continued high cost of payments, we regret that Amazon.co.uk will no longer accept UK-issued Visa credit cards as of 19 January 2022. Customers can continue to use all debit cards (including Visa debit cards) and other non-Visa credit cards to shop on Amazon.co.uk.”
A spokesperson for Visa told the following to BBC News:
“UK shoppers can use their Visa debit and credit cards at Amazon UK today and throughout the holiday season. We are very disappointed that Amazon is threatening to restrict consumer choice in the future. When consumer choice is limited, nobody wins. 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.”