Amazon to stop accepting U.K. Visa credit cards citing ‘high fees’

 

 

Amazon had told customers that it would no longer accept Visa credit cards that are issued in the U.K. from the following year. The e-commerce giant cited that the high fees charged by the credit card company was the reason why the cards would no longer be accepted from January 19, 2022.

After Amazon informed several customers of the new rule, Visa shares saw a drop of 2.5 percent in premarket trading in the U.S.

After Brexit, credit card networks including Visa and Mastercard increased their U.K.-E.U. interchange fees. However, as of now, Amazon has said that its customers could use Visa debit cards as well as other credit cards such as Mastercard and American Express. It also asked users to update their default payment method, before the change would come into effect, according to a report by Bloomberg.

A Visa spokesperson told CNBC that the company was “very disappointed” with Amazon’s threat of restricting customer choices in the future. The company also said that shoppers in Britain could use their both their Visa credit and debit cards to shop at Amazon through the holidays.

 



They also mentioned that they were looking to resolve the matter with Amazon so that their card holders would be able to use their “preferred Visa credit cards” at the e-commerce company in the U.K. without the restrictions that would be imposed by Amazon next January.

A spokesperson for Amazon told CNBC that Visa had high charges and that the “cost of accepting card payments” continued to be an obstacle for businesses that strived to give customers the best price. The online retail giant also said that costs should have gone down over time as technology had advanced but the costs continued to stay high or even became higher than before.

Due to its sheer size and volume of business, Amazon might be able to get the payments company Visa to lower its fees. However, smaller business will not have that leverage or power.





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