Amazon to Stop Accepting Visa Credit Cards in UK Over Payments Dispute

Amazon is contemplating dropping Visa as accomplice on its US co-branded bank card after earlier confirming it could cease accepting Visa bank cards within the United Kingdom as a dispute over funds intensified.

The e-commerce big is in talks with a number of cost networks together with Mastercard, American Express, and Visa as a part of what it known as its customary course of for reviewing its co-branded bank card settlement, a spokesperson stated.

Visa declined to touch upon the co-branded card. Mastercard and American Express didn’t reply to requests for remark.

Earlier, shares of Visa closed 4.7 p.c decrease after Amazon stated it could cease taking funds from Visa bank cards within the UK from January 19, 2022. In a press release, it stated such prices needs to be “going down over time with technological advancements, but instead they continue to stay high or even rise.”

In current months, Amazon has launched surcharges on clients utilizing Visa bank cards in Singapore and Australia, citing excessive charges, as the connection between the 2 companies deteriorated.

Since Britain’s exit from the European Union, an EU-enforced cap on charges charged by card issuers is now not in place within the UK, that means suppliers are free to hike prices.

Visa final month started charging 1.5 p.c of the transaction worth for bank card funds made on-line or over the telephone between the UK and EU, and 1.15 p.c for debit card transactions, up from 0.3 p.c and 0.2 p.c, respectively.

The common bank card processing charges throughout the business vary between 1.5 p.c and three.5 p.c of every transaction, in response to analysts.

Historically, retailers had accepted processing prices by main bank card companies as the price of entry to their big community of card customers, analysts stated, however that may very well be altering.

The transfer marks an “important turning point in the payments industry,” stated Laura Hoy, fairness analyst at Hargreaves Lansdown, including Amazon might hope to drive extra clients to its personal funds system.

“Ultimately, we think Amazon has the edge in this game of chicken – whether customers adopt its own payment system or Visa gives in and lowers its fees, either is a win for the retail giant,” Hoy stated.

In the previous, different large retailers have settled price disputes with Visa after asserting they had been going to give up taking Visa bank cards in slender segments of their companies.

Walmart’s unit in Canada, for instance, stated in 2016 it could cease accepting Visa bank cards after being unable to succeed in an settlement on charges. Seven months later the businesses stated they’d settled the matter after about 20 shops stopped taking Visa playing cards.

Amazon clients can nonetheless use Visa debit playing cards, Mastercard, and Amex bank cards, and Eurocard, within the UK, Amazon stated in a notice to clients.

Visa stated in a press release it was “disappointed that Amazon is threatening to restrict consumer choice.”

“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,” Visa added.

Shares of rival Mastercard dropped 2.8 p.c on Wednesday. Amazon shares rose 0.2 p.c. American Express shares closed 0.7 p.c decrease.

The British Retail Consortium stated different retailers within the United Kingdom confronted greater prices for cross-border funds, following Britain’s departure from the European Union.

© Thomson Reuters 2021