Amazon drops plans to block Visa credit card payments – reaction

Amazon, News

Amazon has dropped its plans to block UK Visa credit card payments this week, as the two companies seek to resolve a dispute.

In an email to customers, the online retailer said it was “working closely with Visa on a potential solution”.

Amazon said last year that Visa payment costs were “an obstacle” to providing the best prices for customers.

But Visa accused Amazon of threatening to restrict consumer choice. “When consumer choice is limited, nobody wins,” Visa said.

Neither company has indicated when the talks might conclude. In an email to customers on Monday, Amazon said it was working closely with Visa on “a potential solution that will enable customers to continue using their Visa credit cards on”.

An EU-enforced cap on fees charged by card issuers is no longer in place in the UK following Brexit.

Says Neil Smith, Head of Strategic Partnerships EMEA & APAC at software as a service company Forter: 

“Amazon UK’s update today to its customers, explaining that the ban on UK-issued Visa credit cards being used on its platform from 19th January will no longer take place on that date, will come as a relief for those customers who do not want to be inconvenienced by having to switch to alternative payment methods. However, the announcement was hardly surprising; there has been plenty of speculation in recent days on who would back down first.      

“The email from Amazon, stating that “we are working closely with Visa on a potential solution that will enable customers to continue using their Visa credit cards…” could signal a degree of compromise from both companies, with a 2021 survey indicating a potential loss of £1.4bn for the eCommerce giant. However, given Amazon’s UK market share, it’s likely that Visa has agreed to negotiate on the fees it charges for credit card transactions – and may even have agreed to follow MasterCard’s position.”

Chris Price
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