Amazon to Stop Accepting Visa Credit Cards in UK Over Payments Dispute, May Also Drop Visa as Partner in US

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Amazon is contemplating dropping Visa as associate on its US co-branded bank card after earlier confirming it could cease accepting Visa bank cards in the United Kingdom as a dispute over funds intensified.

The e-commerce large is in talks with a number of fee networks together with Mastercard, American Express, and Visa as a part of what it referred to as its customary course of for reviewing its co-branded bank card settlement, a spokesperson stated.

Visa declined to touch upon the co-branded card. Mastercard and American Express didn’t reply to requests for remark.

Earlier, shares of Visa closed 4.7 p.c decrease after Amazon stated it could cease taking funds from Visa bank cards in the UK from January 19, 2022. In an announcement, it stated such costs ought to be “going down over time with technological advancements, but instead they continue to stay high or even rise.”

In current months, Amazon has launched surcharges on clients utilizing Visa bank cards in Singapore and Australia, citing excessive charges, as the connection between the 2 corporations deteriorated.

Since Britain’s exit from the European Union, an EU-enforced cap on charges charged by card issuers is not in place in the UK, that means suppliers are free to hike costs.

Visa final month started charging 1.5 p.c of the transaction worth for bank card funds made on-line or over the telephone between the UK and EU, and 1.15 p.c for debit card transactions, up from 0.3 p.c and 0.2 p.c, respectively.

The common bank card processing charges throughout the trade vary between 1.5 p.c and three.5 p.c of every transaction, in accordance to analysts.

Historically, retailers had accepted processing costs by main bank card corporations as the price of entry to their large community of card customers, analysts stated, however that may very well be altering.

The transfer marks an “important turning point in the payments industry,” stated Laura Hoy, fairness analyst at Hargreaves Lansdown, including Amazon might hope to drive extra clients to its personal funds system.

“Ultimately, we think Amazon has the edge in this game of chicken – whether customers adopt its own payment system or Visa gives in and lowers its fees, either is a win for the retail giant,” Hoy stated.

In the previous, different huge retailers have settled price disputes with Visa after asserting they have been going to stop taking Visa bank cards in slim segments of their companies.

Walmart’s unit in Canada, for instance, stated in 2016 it could cease accepting Visa bank cards after being unable to attain an settlement on charges. Seven months later the businesses stated that they had settled the matter after about 20 shops stopped taking Visa playing cards.

Amazon clients can nonetheless use Visa debit playing cards, Mastercard, and Amex bank cards, and Eurocard, in the UK, Amazon stated in a notice to clients.

Visa stated in an announcement it was “disappointed that Amazon is threatening to restrict consumer choice.”

“We continue to work toward a resolution, so our cardholders can use their preferred Visa credit cards at Amazon UK without Amazon-imposed restrictions come January 2022,” Visa added.

Shares of rival Mastercard dropped 2.8 p.c on Wednesday. Amazon shares rose 0.2 p.c. American Express shares closed 0.7 p.c decrease.

The British Retail Consortium stated different retailers in the United Kingdom confronted larger costs for cross-border funds, following Britain’s departure from the European Union.

© Thomson Reuters 2021


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