Amazon to continue accepting visa cards in the UK

Visa and Amazon are reportedly working together to reach a common ground that can help everyone involved in the deal.

Last year, in November, Amazon stated that Visa payment costs were an obstacle to offering customers the best prices. As such, Amazon had declared not accepting UK visa cards from January 19. On the other hand, Visa accused Amazon of threatening to limit consumer choice.

The two firms are now trying to negotiate the dispute. In a recent statement, Amazon has announced that it will not stop taking Visa credit cards for UK payments as initially planned. Amazon declared:

The expected change regarding the use of Visa credit cards on Amazon.co.uk will no longer take place on January 19.

Compassionate alliance

The two firms are said to be working together to find common ground. Visa confirmed it was working closely with Amazon to reach an agreement that benefits the customers as well. Visa would have suffered a significant setback if it had lost the right to be used for payments on the retail platform in the United Kingdom. Visa added:

When consumer choice is limited, nobody wins.

Neither business has indicated the timeline by when they would have a concrete decision. However, Amazon sent out emails to customers and confirmed the news. The email summarised how the two giants are working together on a potential solution that will enable consumers to continue using their Visa credit cards on Amazon.co.uk.

Brexit effects

Since Brexit, the online business is believed to have been particularly enraged by a five-fold increase in interchange fees, or additional cross-border expenditures. Such fees, which would be paid by Amazon or merchants on its platform, would eat into profit margins - or, if passed on to users, would raise prices. Amazon has previously refused to reveal how much Visa charges the store to process credit card transactions.

Visa likewise declined to comment, claiming that it takes less than 0.1 per cent of a purchase's value on average. The Payment Systems Regulator is concerned about the lack of competition in this industry, which is dominated by Visa and Mastercard. According to a strategy released last week, Payment Systems Regulator aims to increase competition among UK payment systems. Their MD Chris Hemsley confirmed,

We will focus more on improving competition between payment systems, not just competition within payment systems.
This is important because we know that the future of retail payments is becoming increasingly about digital payments, most of which are currently made using card payment systems.
Amazon to stop accepting UK-issued Visa credit cards Amazon to stop accepting UK-issued Visa credit cards