Amazon to stop accepting Visa credit cards in the UK

[Zoom7000]

I was a bit shocked at the email I got in my inbox yesterday and didn't think it could be true, until I saw the BBC News article. Much like the article says, I'm guessing that Amazon are doing this to scaremonger Visa into reducing the fees.

 

Amazon will stop accepting Visa credit cards issued in the UK from 19 January, the online retail giant has said.

 

It said the move was due to high credit card transaction fees but said Visa debit cards would still be accepted.

 

Visa said it was "very disappointed that Amazon is threatening to restrict consumer choice in the future".

 

Amazon said: "The cost of accepting card payments continues to be an obstacle for businesses striving to provide the best prices for customers."

 

The online retailer said costs should be going down over time due to advances in technology, "but instead they continue to stay high or even rise".

 

An Amazon spokesperson said the dispute was to do with "pretty egregious" price rises from Visa over a number of years with no additional value to its service.

 

Amazon is offering £20 for Prime customers to switch from using Visa to an alternative payment method, and £10 for other customers, if they have a Visa cards as their default or only payment method on their account.

 

Visa said in a statement it was "very disappointed that Amazon is threatening to restrict consumer choice in the future. When consumer choice is limited, nobody wins."

 

It said it had "a long-standing relationship with Amazon" and that it was trying to resolve the situation so customers would be able to use Visa credit cards with Amazon UK.

 

Amazon declined to say how much Visa charges the retailer to process transactions made on credit cards.

 

Visa also declined to comment though it claimed that on average it takes less than 0.1% of the value of a purchase.

 

'A blow'

 

Amazon and Visa said any changes in fees had nothing to do with Brexit.

 

Both Visa and its rival Mastercard have raised the so-called interchange fee on cross-border transactions between businesses in the UK and the European Union following Brexit.

 

The dispute between Amazon and Visa is to do with the fees the credit card company charges Amazon for its services in the UK.

 

Amazon is also considering dropping Visa as a partner for its US co-branded credit card.

 

It is in talks with payment networks, including Mastercard, American Express and Visa - as part of what it calls a standard process, the BBC has learnt.

 

Analysis by Kevin Peachey, Personal finance correspondent

This row between two corporate titans is now being played out in full view of their customers.

 

Amazon says Visa's fees are excessive, and an obstacle to low prices for consumers. Visa says its fees are competitive, has minimal effect on prices, and that nobody wins when choice is restricted.

 

Whether or not this row is about fees, or whether that is just a smokescreen is largely irrelevant to consumers using these services. They just know they may have to change the way they pay on Amazon.

 

Yet, the timing is significant. These messages to customers hit home harder when people are regularly using Amazon for Christmas shopping.

 

But it also means there is still time before January 19 for a compromise to be reached.

 

James Andrews, senior personal finance editor at comparison website Money.co.uk, said the move "will come as a blow to the millions of Britons" who use Visa credit cards, including Barclaycard and HSBC customers.

 

"With American Express also rejected by many UK retailers, that means people looking for rewards on their spending or trying to split the cost of shopping with a 0% purchase card on Amazon will be effectively forced to choose a Mastercard," he said.

 

He added that a rewards card that is offered by Amazon is "powered by Mastercard".

 

Mastercard's executive vice chairman Ann Cairns, said: "It's very important that customers have choice, and have the widest variety of ability to pay, whether that's through cards or from their bank accounts or cash, and remember that it is never the consumer that pays fees."

 

"We talk to Amazon all the time because obviously we are two big global businesses and Amazon is one of our top customers around the world."

 

Retail analyst Steve Dresser said in a tweet that Amazon could be aiming to bring Visa fees down with its move.

 

The Federation of Small Businesses (FSB) said credit card fees "charged by the handful of card providers which dominate the cashless payment space have soared in recent years".

 

"Small businesses are almost always charged more for card terminals than big corporates - so when online giants start throwing down the gauntlet, you know the situation is becoming critical," said FSB national chairman Mike Cherry.

 

Businesses have had ongoing concerns about credit card fees from the major providers.

 

Last October, Visa and Mastercard were accused by the British Retail Consortium (BRC) of charging excessive fees. The trade body said they had doubled in two years.

 

At the time, the BRC warned that retailers would be forced to pass on costs to consumers, with credit card bills rising by up to £40.

 

The Payment Systems Regulator said there were "real questions about how well the cards market is working".

 

"We will look into how well this market is working, including the issue of increasing card fees," a spokesman for the regulator said. "If necessary we will intervene to address any issues we identify."

 

He said a final strategy would be published in the new year.

 

Visa shares ended Wednesday's New York trading day down by 4.7%.

 

Source - BBC News

[markberry]

Did your email also include a £20 credit for adding a non-visa card to your account? Mine did!

[admars]

Much like the article says, I'm guessing that Amazon are doing this to scaremonger Visa into reducing the fees.

 

either that or drum up business for their own mastercard where you get a £40 gift card, I'd imagine they had a lot of new applications yesterday even thought it's not until the new year.

 

Did your email also include a £20 credit for adding a non-visa card to your account? Mine did!

no, and not seen that mentioned elsewhere

Edited November 18, 2021 by admars

[jnfarmer]

Yeah, I got this as well and thought it was fake. There must be something afoot.

[Ironside]

So I read a Register article on this earlier, here's some choice quotes.

 

Amazon will stop accepting UK-issued Visa credit cards • The Register

 

"Visa and Mastercard this year both raised their interchange fees from 0.3 per cent to 1.5 per cent for transactions made via credit card between the UK and the EU. The Commission caps these fees, but Brexit means the cap no longer applies to UK-EU transactions."

 

 

"Amazon has confirmed it will no longer accept payment via Visa credit cards issued in the United Kingdom after several Reg readers wrote in complaining of a cryptic message they'd been sent this morning.The online sales giant has indicated the move was "due to the high fees Visa charges for processing credit card transactions."

 

"Visa seems to be hoping Amazon will budge, telling The Reg that it was "work[ing] toward a resolution so our cardholders can use their preferred Visa credit cards at Amazon UK without Amazon-imposed restrictions come January 2022."

 

 

So basically Amazon and Visa are fighting. This is why:

 

"The Amazon.co.uk website is run by Amazon Europe Core SARL and Amazon EU SARL, headquartered in Luxembourg. According to its full accounts made up to 31 December 2020 at Companies House, Amazon EU SARL had a net turnover of €43.84bn, up from €32.18bn the year before. The EU-registered firm has "branches" in France, Germany, Italy, the Netherlands, Poland, Spain, Sweden, and the UK, and reports consolidated accounts under US parent firm Amazon.com Inc."

 

"Visa and Mastercard this year both raised their interchange fees from 0.3 per cent to 1.5 per cent for transactions made via credit card between the UK and the EU. The Commission caps these fees, but Brexit means the cap no longer applies to UK-EU transactions."

 

 

TL;DR: Visa saw that brexit meant they could get more money out of EU and UK businesses by increasing fees on transactions between these countries, Bezos has not taken this decrease to his profits kindly and is on the warpath.

 

No matter who wins this slapfight, we all lose.

 

There's more jokes to be made about brexit and capitalism here, but I would like to not be turned into a frog!

[psydii]

So I read a Register article on this earlier, here's some choice quotes.

 

No matter who wins this slapfight, we all lose.

 

How so? While I don't feel amazon will be hurt if they loose this, we all win if they do... Who here knew about the change in Visa's rates? With such a high profile fight, over a thing that materially harms uk consumers, our dear leader will likely push to be seen to make it a success story for brexit (followed by some swift legislation to demonstrate 'taking back control')

 

So that last bit is perhaps wishful thinking, but I am genuinely intrigued as to how we (the uk consumer) loose if amazon get Visa to back down (or cut them a special deal).

Edited November 18, 2021 by elsiegee40
Political comment removed

[elsiegee40]

Please keep politics out of this thread. It will be closed if that’s the way it goes

[Zoom7000]

Did your email also include a £20 credit for adding a non-visa card to your account? Mine did!

 

Yup, I just got the £20 for removing and then re-adding my Mastercard that was already on my account!

 

... here is your £20 Amazon promotional credit for adding a new payment option

 

Your new payment method was added successfully. The £20 promotional credit is immediately available on your Amazon account and will automatically be applied at checkout. This promotional credit expires on Saturday, 12/18/2021.

 

(Note the American date format!)

[jmak]

It's really bizarre given that they're only picking on Visa when MasterCard charges the same and the still take American Express which is generally by far the most expensive card for retailers. Maybe they give Amazon a special rate.

[Zoom7000]

either that or drum up business for their own mastercard where you get a £40 gift card, I'd imagine they had a lot of new applications yesterday even thought it's not until the new year.

 

Martin Lewis subtly hinted at this during his show on ITV tonight as well...

[Rob_D]

but I am genuinely intrigued as to how we (the uk consumer) loose if amazon get Visa to back down (or cut them a special deal).

Could be seen as strawmaning or scaremongering. But if Amazon win (by win, I mean straight up ban visa credit) and people accept it, how long before you can only use the amazon-mastercard as payment? And if you use the amazon credit card do amazon pay themselves the transaction fee or would that still go to MC?

[Zoom7000]

Could be seen as strawmaning or scaremongering. But if Amazon win (by win, I mean straight up ban visa credit) and people accept it, how long before you can only use the amazon-mastercard as payment? And if you use the amazon credit card do amazon pay themselves the transaction fee or would that still go to MC?

 

So long as Mastercard are still the transaction handler, Amazon would have to continue to pay them. If Amazon didn't want to pay the fees, they would have to become a credit card transaction handler themselves. Not impossible, given they have the resources to send Jeff Bezos to space, however, I doubt that they'd want to go into this space. It's much easier to just pay the fees. Clearly, their brand power is strong enough to force these companies to give them preferential rates!

[Ironside]

How so? While I don't feel amazon will be hurt if they loose this, we all win if they do... Who here knew about the change in Visa's rates? With such a high profile fight, over a thing that materially harms uk consumers, our dear leader will likely push to be seen to make it a success story for brexit (followed by some swift legislation to demonstrate 'taking back control')

 

So that last bit is perhaps wishful thinking, but I am genuinely intrigued as to how we (the uk consumer) loose if amazon get Visa to back down (or cut them a special deal).

 

Either Amazon gets yet another sweetheart deal to benefit their business over smaller businesses that cannot lean on Visa, or Visa gets away with putting the screws to UK-EU transactions. Of course, this could result in Parliament trying to intervene to stop these transaction fees or at least bring them inline with pre-Brexit fees, but that's a hypothetical.

[Garacesh]

So I read a Register article on this earlier, here's some choice quotes.

 

Amazon will stop accepting UK-issued Visa credit cards • The Register

 

"Visa and Mastercard this year both raised their interchange fees from 0.3 per cent to 1.5 per cent for transactions made via credit card between the UK and the EU. The Commission caps these fees, but Brexit means the cap no longer applies to UK-EU transactions."

 

 

"Amazon has confirmed it will no longer accept payment via Visa credit cards issued in the United Kingdom after several Reg readers wrote in complaining of a cryptic message they'd been sent this morning.The online sales giant has indicated the move was "due to the high fees Visa charges for processing credit card transactions."

 

"Visa seems to be hoping Amazon will budge, telling The Reg that it was "work[ing] toward a resolution so our cardholders can use their preferred Visa credit cards at Amazon UK without Amazon-imposed restrictions come January 2022."

 

 

So basically Amazon and Visa are fighting. This is why:

 

"The Amazon.co.uk website is run by Amazon Europe Core SARL and Amazon EU SARL, headquartered in Luxembourg. According to its full accounts made up to 31 December 2020 at Companies House, Amazon EU SARL had a net turnover of €43.84bn, up from €32.18bn the year before. The EU-registered firm has "branches" in France, Germany, Italy, the Netherlands, Poland, Spain, Sweden, and the UK, and reports consolidated accounts under US parent firm Amazon.com Inc."

 

"Visa and Mastercard this year both raised their interchange fees from 0.3 per cent to 1.5 per cent for transactions made via credit card between the UK and the EU. The Commission caps these fees, but Brexit means the cap no longer applies to UK-EU transactions."

 

 

TL;DR: Visa saw that brexit meant they could get more money out of EU and UK businesses by increasing fees on transactions between these countries, Bezos has not taken this decrease to his profits kindly and is on the warpath.

 

No matter who wins this slapfight, we all lose.

 

There's more jokes to be made about brexit and capitalism here, but I would like to not be turned into a frog!

 

Wait, hang on, am I missing something?

Nothing there says that Visa put their rates above 1.5?

So both Mastercard and Visa put up to 1.5, but now Visa are banned because they're charging high fees?

But Mastercard charge the same fees?

 

HMMMMMMM...

[LeMarchand]

Looks like there's a winner in that game of chicken (or Jeff Bezos got enough signups for Amazon's own card) as they've just announced that the deadline for the cut off is now gone and it's OK to carry on as normal, at least for the moment. Wonder who swerved?

[Zoom7000]

Looks like there's a winner in that game of chicken (or Jeff Bezos got enough signups for Amazon's own card) as they've just announced that the deadline for the cut off is now gone and it's OK to carry on as normal, at least for the moment. Wonder who swerved?

 

I think a last minute deal was always on the cards (no pun intended!). But yes, it's interesting that the day that they made the initial annoucement, Martin Lewis mentioned on his weekly show that the best Mastercard in the market was... Amazon Mastercard.

 

Either way, thanks for the £40 voucher Amazon! lol

[Ironside]

Looks like there's a winner in that game of chicken (or Jeff Bezos got enough signups for Amazon's own card) as they've just announced that the deadline for the cut off is now gone and it's OK to carry on as normal, at least for the moment. Wonder who swerved?

 

Verge article says they're still in talks. I have a feeling Amazon is continuing to lean on Visa and are probably gonna get a deal to cut fees for amazon transactions. If talks had broken down, Amazon would have implemented the ban to try and get people to buy their special Amazon mastercards

[Katy]

Verge article says they're still in talks. I have a feeling Amazon is continuing to lean on Visa and are probably gonna get a deal to cut fees for amazon transactions. If talks had broken down, Amazon would have implemented the ban to try and get people to buy their special Amazon mastercards

I've not seen an advert for the Amazon cards yet, just the business version advertised on every purchase I make, which I can't get because I'm not a business...

[Andrew_C]

They've kissed and made up...

 

https://www.bbc.co.uk/news/business-60413957

[Ironside]

Reuters reporting on this too: Amazon accepts Visa credit cards in global truce over fees | Reuters

 

Interestingly there's no mention of what's happening to said fees:

 

"This agreement includes the acceptance of Visa at all Amazon stores and sites today, as well as a joint commitment to collaboration on new product and technology initiatives," a Visa spokesperson said in an email.

 

Looks like I was wrong in my assessment, there is no fee adjustment from Visa for the UK market - well, as far as Reuters knows.

[jmak]

Email from Amazon:

 

We’ve recently reached a global agreement with Visa that allows all customers to continue using their Visa credit cards in our stores. As a result, we will not move forward with our previous plans to stop accepting UK issued Visa credit cards.

[/Quote]

 

So not just a UK agreement - it'd be very interesting to see who backed down.

[Zoom7000]

So not just a UK agreement - it'd be very interesting to see who backed down.

 

I wouldn't be surprised if it was Visa. Lost revenue from Amazon sales would have been a potentially HUGE loss!

[FN-GM]

In Australia we had to pay a surcharge on Visa cards - so I used a Mastercard instead. With this announcement the surcharge has now gone.