A decision to ban the use of Visa credit cards in the UK was halted by Amazon yesterday (17 January), as the two industry giants try to resolve a dispute over payment fees.
In November, Amazon told customers that it would stop accepting UK-issued Visa credit cards for payments on its online shopping website from 19 January because of “high fees” charged by Visa for processing credit card transactions.
In an email to affected customers yesterday, Amazon said that it was “working closely with Visa on a potential solution” that would let customers continue to pay with their Visa credit cards on Amazon’s UK website. It added that it would give customers “advance notice” if the situation shifts again.
“Should we make any changes related to Visa credit cards, we will give you advance notice. Until then, you can continue to use Visa credit cards, debit cards, Mastercard, American Express and Eurocard as you do today,” the email read.
Based on a poll of 2,000 Amazon customers in December, it was estimated that Amazon faced losing up to £1.4bn as a result of the Visa credit card ban, with many users sayings they would reduce their purchase amounts or entirely halt their purchases, according to The Independent.
While there were potential losses for Amazon, Visa also stood to lose out in this corporate stand-off. Many Visa credit card customers may have already switched to other payment methods, such as Mastercard – an Amazon partner.
Amazon has made similar moves to curb the use of Visa-issued credit cards in Singapore and Australia, where it introduced a 0.5pc surcharge on transactions made with those cards. Amazon offered customers gift cards to incentivise switching payment methods.
Since Brexit, both Visa and Mastercard have raised their intercharge fees on cross-border transactions between the UK and the EU. This is because the UK is no longer subject to an EU cap on fees charged by card issuers, designed to improve competition in the space dominated by Visa and Mastercard.
Don’t miss out on the knowledge you need to succeed. Sign up for the Daily Brief, Technovanguard’s digest of need-to-know sci-tech news.
The post Amazon reverses Visa credit card ban in the UK appeared first on Technovanguard.
