Amazon UK has informed customers that it will stop taking Visa credit cards on January 19. However, it claimed Visa debit cards will still be accepted. Visa expressed dissatisfaction with Amazon’s potential to limit future consumer choice.
Payment processing fees continue to be a barrier for businesses seeking to deliver the best prices for customers. The online store claims that technological advancements should be driving down costs, but they aren’t. Visa’s “quite egregious” price increases over a number of years, according to an Amazon spokeswoman.
Visa stated it was “disappointed that Amazon may limit consumer choice in the future. Consumption choice is a loser.” In a statement, Visa stated it had “a long-standing partnership with Amazon” and was working to rectify the issue.
Amazon refused to divulge how much Visa charges it to handle credit card transactions. According to the company’s own claims of taking less than 0.1% of purchases, Visa has refused to comment.
Amazon and Visa claimed any charge hikes were unrelated to Brexit. Following Brexit, both Visa and Mastercard increased the so-called interchange fee on cross-border transactions between businesses in the UK and the EU.
Amazon and Visa are fighting over the fees Visa charges Amazon for its services in the UK. This battle of titans is now taking place in front of their customers. Amazon claims Visa’s fees are prohibitive to low customer costs. Visa argues its fees are reasonable, and that limiting options benefits no one.
It doesn’t matter whether this is a pricing dispute or a smokescreen to consumers who use these services. Amazon may force them to change their payment methods. But the time is crucial. These messages to customers ring truer when people often shop on Amazon for gifts. But it also means a compromise can be found before January 19.