In a move that is certain to frustrate many consumers, Amazon has announced that it will stop processing Visa credit cards from January 19 in the United Kingdom.
The move, the online retailer said on Wednesday, is over Visa’s processing fees. Amazon urged Prime subscribers to switch to other accepted credit cards, including Mastercard, Amex, and Eurocard. The company says it will still accept Visa debit cards, however.
“Starting 19th January 2022, we will unfortunately no longer accept Visa credit cards issued in the UK, due to the high fees Visa charges for processing credit card transactions,” Amazon UK said in an email to British customers. “We know this may be inconvenient, and we’re here to help you through this transition.”
According to economic expert Martin Lewis on Twitter, the move to suspend payments from Visa credit cards is likely “because Visa is increasing transaction rates now the EU cap no longer applies (post-Brexit).”
However, Lewis suggested that Amazon may walk back the move if Visa reduces its transaction fees. The move, he said, is a possible “negotiating tactic for Amazon to get its fees reduced.”
“The cost of accepting card payments continues to be an obstacle for businesses striving to provide the best prices for customers,” said an Amazon spokesperson to the BBC, who noted that costs for processing should be going down due to advances in technology, “but instead they continue to stay high on even rise.”
The spokesperson said the dispute between the two companies was to do with the “pretty egregious” price increases from Visa over several years with no additional value to its service, the BBC reported. Amazon did not elaborate on the exact charges Visa imposes on the retailer to process credit card transactions.
As part of the move, Amazon is offering a £20 credit for Prime customers currently using Visa cards to make the switch over to an alternative payment method. Other customers will be given £10.
In response, Visa said that it is “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,” Visa said.
Until then, Visa credit cards will continue to be accepted through both Christmas and Black Friday.