Amazon will ban Visa credit cards in the UK in the battle for payment fees

Amazon will stop accepting payments from Visa credit cards issued in the UK from 19 January 2022. Customers will still be able to use Visa debit cards issued in the UK, as well as credit cards issued by MasterCard, American Express and other companies.

Amazon is blocking UK credit cards from Visa as part of an ongoing battle over “interchange” fees – charges that card issuers charge to a merchant bank for each transaction. Visa’s interbank fees for transactions between the UK and the EU (where Amazon UK processes payments) were previously limited to 0.3 per cent of EU law. But since the UK left the EU, Visa has been able to raise that fee to 1.5 per cent.

However, Visa is not the only company making such a change. MasterCard made an identical increase in its interbank fees before Visa, but it has not been blocked by Amazon. It is not entirely clear why Visa has been designated. It could simply be a strategic decision on Amazon’s part – to harm one company instead of taking an entire industry. Or there may be specific complications in Visa’s payment policies. E.g, Bloomberg notes that the company has increased the brokerage fees for e-commerce sites, while reducing the fees in other areas, such as training and buying real estate. It is not clear whether policies from MasterCard or other card issuers make similar differences.

In a statement from an Amazon, the company said:

“The cost of accepting card payments remains an obstacle for companies striving to deliver the best prices to customers. These costs should decrease over time with technological advances, but instead they continue to remain high or even increase. As a result. of Visa’s continued high payment costs, we regret that will no longer accept UK-issued Visa credit cards from 19 January 2022. Customers can continue to use all debit cards (including Visa debit cards) and other non- Visa credit card to shop on “

While a spokesman for Visa told BBC news:

“UK customers can use their Visa UK debit and credit cards today and throughout the holiday season. We are very disappointed that Amazon is threatening to limit consumer choice in the future. When consumer choice is limited, no one wins. We has a long-standing relationship with Amazon and we continue to work towards a solution so that our cardholders can use their preferred Visa credit card with Amazon UK without Amazon imposed restrictions in January 2022. “

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