“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,” an Amazon spokesperson said an in emailed statement to The Epoch Times. “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.”
“With the rapidly changing payments landscape around the world, we will continue innovating on behalf of customers to add and promote faster, cheaper, and more inclusive payment options to our stores across the globe,” the spokesperson added.
Visa credit cards issued outside of the UK will be exempt.
“You can still use debit cards (including Visa debit cards) and non-Visa credit cards like Mastercard, Amex, and Eurocard to make purchases,” Amazon said in an email to some customers, per the BBC.
Amazon also asked its customers to update payment methods, including for Prime membership and any subscriptions. “We know this may be inconvenient, and we’re here to help you through this transition,” it added.
Visa said it was disappointed by the decision and accused Amazon of restricting customers’ choice.
“UK shoppers can use their Visa debit and credit cards at Amazon UK today and throughout the holiday season,” a Visa spokesperson told the BBC. “We are very disappointed that Amazon is threatening to restrict consumer choice in the future. When consumer choice is limited, nobody wins.”
“We have a long-standing relationship with Amazon, and 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,” the spokesperson added.
Visa did not immediately respond to a request for comment.
Merchants disputing with payment processors over transaction fees is not a new phenomenon. In March, U.S. supermarket chain Kroger Co announced its Smith’s Food and Drug Stores division will stop accepting Visa credit cards due to excessive transaction fees, Reuters reported. Although it later U-turned on its decision.
Kroger had stopped accepting Visa’s credit cards at its Foods Co stores in California in August last year due to a price dispute over interchange rates and network fees.
Payments on cards attract a range of fees including interchange fees, also known as swipe fees,” which are a percentage of the cost of the transaction that the merchant’s bank account must pay whenever a customer uses a credit/debit card to make a purchase from their store. Credit card interchange fees are typically higher to account for the additional risk of such a transaction.
Visa earlier this year hiked the interchange fees it charges merchants (pdf) for processing digital transactions between the UK and the European Union. As of October 19, Visa increased the fee on digital payments made between European customers and British businesses from 0.3 percent to 1.5 percent, as well as vice versa, while the interchange fee for cross-border debit card payments made online increased from 0.2 percent to 1.15 percent.
MoneySavingExpert founder Martin Lewis attributed the dispute over fees to Brexit.
“It’s because Visa is increasing transaction rates now [that] the EU cap no longer applies (post Brexit),” Lewis wrote on Twitter.
But CNBC technology expert Ryan Browne said on Twitter that, “it could be a way to get some bargaining power over Visa to lower fees. Smaller retailers aren’t in a position to negotiate, but Amazon—given its size—might be. Visa is clearly bruised by this decision, though, and it could damage their relationship in the long run.”
Editor’s note: This article has been updated with a statement from Amazon.