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Monday, November 29, 2021

Amazon to ban Visa bank cards within the UK in battle over fee charges

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Amazon will cease accepting funds from Visa bank cards issued within the UK from January nineteenth, 2022. Clients will nonetheless be capable to use Visa debit playing cards issued within the UK, in addition to bank cards issued by MasterCard, American Specific, and other firms.

Amazon is obstructing UK bank cards from Visa as a part of an ongoing battle over “interchange” charges — levies charged by card issuers to a service provider’s financial institution for every transaction. Visa’s interchange charges for transactions between the UK and the European Union (the place Amazon UK processes funds) have been beforehand capped at 0.3 % by EU regulation. However because the UK left the EU, Visa has been in a position to hike that fee to 1.5 %.

Nonetheless, Visa isn’t the one firm to make such a change. MasterCard made an identical increase to its interchange charges earlier than Visa, but it surely hasn’t been blocked by Amazon. It’s not totally clear why Visa has been singled out. It might merely be a strategic determination on Amazon’s half — to harm one firm as a substitute of taking over a complete trade. Or there could also be particular problems in Visa’s fee insurance policies. For instance, Bloomberg notes that the corporate has elevated interchange charges for e-commerce websites, whereas lowering charges in different areas, like training and actual property purchases. It’s not clear if insurance policies from MasterCard or different card issuers make comparable distinctions.

In an announcement from an Amazon, the corporate stated:

“The price of accepting card funds continues to be an impediment for companies striving to offer the perfect costs for purchasers. These prices ought to be taking place over time with technological developments, however as a substitute they proceed to remain excessive and even rise. Because of Visa’s continued excessive value of funds, we remorse that Amazon.co.uk will not settle for UK-issued Visa bank cards as of 19 January, 2022. Clients can proceed to make use of all debit playing cards (together with Visa debit playing cards) and different non-Visa bank cards to buy on Amazon.co.uk.”

Whereas a spokesperson for Visa told BBC News:

“UK consumers can use their Visa debit and bank cards at Amazon UK at this time and all through the vacation season. We’re very disillusioned that Amazon is threatening to limit client alternative sooner or later. When client alternative is proscribed, no person wins. Now we have a long-standing relationship with Amazon, and we proceed to work towards a decision, so our cardholders can use their most popular Visa bank cards at Amazon UK with out Amazon-imposed restrictions come January 2022.”

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