Amazon will no longer accept issued Visa credit cards in the UK from mid-January, the company announced on Wednesday.
In an email to customers, Amazon said the change was due to “Visa’s high fees” for processing credit card transactions. Visa debit cards and other credit cards, including Mastercard and American Express, are still accepted. The change comes into effect on January 19th.
Amazon said it believes credit card payment costs – small percentages of the transaction price that issuers charge retailers – “should decrease over time as technology advances.” Instead, according to the company, the costs have remained high.
“We are very disappointed that Amazon threatens to limit consumer choice in the future,” Visa said in a statement. It was said that a solution was still being worked on.
For years, merchants have complained about transaction fees that eat up their revenue – for example, some retailers don’t accept American Express because of its high prices – but if Amazon takes up the fight, the pressure could increase. Visa and others may have to compromise on tariffs or risk a fallout with the world’s largest online retailer.
While Amazon has said the fees Visa charges are a global issue, the UK’s credit card transaction ban is furthest advanced. In Singapore, Amazon added a 0.5 percent surcharge to all purchases made with Visa credit cards from mid-September.
According to British Payment systems regulator, an independent agency, some of the fees paid to Mastercard and Visa roughly doubled between 2014 and 2018.
Companies in Great Britain already had to pay higher credit card fees this year after the country left the European Union. No longer protected by the block’s fee cap, Visa and Mastercard plans to increase the fees for cross-border online purchases between the UK and many European countries.
the British retail consortium said on Wednesday that retailers in the UK and the European Economic Area will have to pay an additional £ 150 million ($ 202 million) a year to accept cross-border card payments.