Amazon to ban Visa credit cards in UK

Online retail giant, Amazon, has announced that it will stop accepting payments from Visa credit cards issued in the UK from January 19th, 2022. This is due to high fees Visa charges for processing credit card transactions. However customers will still be able to use Visa debit cards issued in the UK, as well as credit cards issued by other card schemes such as MasterCard, American Express, e.t.c

There has been an ongoing battle between over “interchange” fees. Visa’s interchange fees for transactions between the UK and the European Union (where Amazon UK processes payments) were previously capped at 0.3 percent by EU law. But since the UK left the EU, Visa has been able to hike that fee to 1.5 percent.

However, it is not clear why Visa is being targeted as MasterCard made an identical increase before Visa but it hasn’t been blocked by Amazon.

According to a statement from Amazon,

“The cost of accepting card payments continues to be an obstacle for businesses striving to provide the best prices for customers. These costs should be going down over time with technological advancements, but instead they continue to stay high or even rise. As a result of Visa’s continued high cost of payments, we regret that Amazon.co.uk will no longer accept UK-issued Visa credit cards as of 19 January, 2022. Customers can continue to use all debit cards (including Visa debit cards) and other non-Visa credit cards to shop on Amazon.co.uk.”

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

Amazon has even gone ahead to encourage Visa Credit cardholders to switch by 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.

Amazon.com is also considering dropping Visa as partner on its U.S. co-branded credit card.

One hopes both titans can sit down and come to an amicable agreement before the 19th of January, 2022.