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Amazon Backflips on Visa Credit Card Ban in UK
Amazon has made the decision to ban … then unban … the use of Visa credit cards for customers in the UK.
In an email sent to Amazon UK shoppers in November 2021, the retailer explained that no transactions from Visa cards would be accepted. This is due to high fee charges, the retailer explained.
According to the initial plan, from January 19, 2022, Amazon would “no longer accept Visa credit cards issued in the U.K.”
In a report to Bloomberg, a spokesperson for Amazon shared that “the cost of accepting card payments continues to be an obstacle for businesses striving to provide the best prices for customers.”
When the news dropped, so did Visa’s shares.
Despite the news, the retailer ensured that customers could still use Visa if they set their default payment options as a debit or non-Visa credit card, offering them a discount of £20 (AUD37) for their next purchase.
Much like Mastercard, Visa determines the rates that merchants pay per transaction. As such, Visa has been facing scrutiny for its increase in swipe fees, which have been increasing year over year.
In Australia and other countries, such as Singapore, credit card surcharges have already been put in place to curtail outcomes that the UK is facing.
Executives at Visa were quick to scold Amazon for the decision to ban its credit cards, claiming it would punish the customers for something that ‘had nothing to do with them’.
“The unfortunate thing here is they’ve chosen to penalize a group of consumers that have really nothing to do, have no dog in this fight,” said Vasant Prabhu, the CFO at Visa Inc.
“We are very disappointed that Amazon is threatening to restrict consumer choice in the future. When consumer choice is limited, nobody wins,” said a Visa spokesperson. “We have a long-standing relationship with Amazon, and we continue to work toward a resolution.”
And now it seems that they have come to a conclusion – for now, at least. Today, Amazon reversed the decision to ban Visa credit card transactions, which was supposed to take place hours from now.
In an email sent to customers, Amazo explained that the business is ‘working closely with Visa on a potential solution’, and will accept Visa payments after January 19th. “Amazon customers can continue to use Visa cards on Amazon.co.uk after January 19 while we work closely together to reach an agreement,” said a spokesperson from Amazon.
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