Amazon to no more accept THIS credit card due to high transaction fees, are you using it?

Amazon to no more accept THIS credit card due to high transaction fees, are you using it?

Amazon.com Inc will stop accepting Visa credit cards issued in the United Kingdom from next year because of high transaction fees, the e-commerce giant said on Wednesday, escalating its fight with the credit card company.

Separately, Amazon confirmed it was in talks with several payment networks including Mastercard Inc, American Express Co and Visa as part of its “standard process” for reviewing its U.S. co-branded credit card.

Bloomberg earlier on Wednesday reported that Amazon was looking to move its co-branded credit card from Visa to Mastercard.

In recent months, Amazon has introduced surcharges on customers using Visa credit cards in Singapore and Australia, citing high fees.

Amazon said the UK decision take will take effect on Jan. 19, 2022. In a statement, it said such charges should be “going down over time with technological advancements, but instead they continue to stay high or even rise.”

Shares of Visa closed 4.7% lower on Wednesday and shares of rival Mastercard dropped 2.8%. Amazon shares rose 0.2%. American Express shares closed 0.7% lower.

Visa last month began charging 1.5% of the transaction value for credit card payments made online or over the phone between the UK and EU, and 1.15% for debit card transactions, up from 0.3% and 0.2%, respectively.

The British Retail Consortium said other retailers in the United Kingdom faced higher charges for cross-border payments, following Britain`s departure from the European Union.

Historically, retailers have accepted Visa`s charges as the cost of access to its huge network of card users, analysts said, but that could be changing.

The move marks an “important turning point in the payments industry,” said Laura Hoy, equity analyst at Hargreaves Lansdown, adding Amazon may hope to drive more customers to its own payments 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 said.

In the past other big retailers have settled fee disputes with Visa after announcing they were going to quit taking Visa credit cards in narrow segments of their businesses.

Walmart Inc`s unit in Canada, for example, said in 2016 it would stop accepting Visa credit cards after being unable to reach an agreement on fees. Seven months later the companies said they had settled the matter after about 20 stores stopped taking Visa cards.

Amazon customers can still use Visa debit cards, Mastercard and Amex credit cards, and Eurocard, Amazon said in a note to customers.

Visa said in a statement 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.

A Visa spokesperson declined to comment further.

Amazon did not immediately respond to a request for comment on the report it may switch its co-branded credit card to Mastercard.

Since Britain`s exit from the European Union, an EU-enforced cap on fees charged by card issuers is no longer in place in the UK, meaning providers are free to hike charges.

Following the Amazon announcement, the UK Trade Commission urged the British government to improve the UK-EU trade agreement.

The group, comprising 10 lawmakers as well as several business leaders and economists, was set up in April to provide independent scrutiny of Britain`s trade deals with Europe and the rest of the world.

“If Amazon can`t make it work, with all their resources and ability to navigate legislation to avoid costs, then small businesses have no chance and so the government must improve the UK-EU trade and cooperation agreement to keep British businesses competitive,” the Commission said in a statement.

Source:-zeenews

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