Post by Slinger on Nov 17, 2021 17:25:02 GMT
Amazon (AMZN) is to cease accepting payments made by UK-issued Visa (V) credit cards from next year, it has revealed.
The online retail giant blamed the decision on the card company charging high fees to process transactions over a number of years, with no additional value to its service.
The changes will come into effect as early as 19 January 2022, Bloomberg first reported, citing information that Amazon had shared with its customers this week, after they had purchased items.
Visa debit cards, as well as MasterCard and Amex credit cards, can still be used on the site, and Visa credit cards issued outside of Britain can also be used as normal.
“UK shoppers can use their Visa debit and credit cards at Amazon UK today and throughout the holiday season," a Visa spokesman said. "We are very disappointed that Amazon is threatening to restrict consumer choice in the future. When consumer choice is limited, nobody wins."
It added: “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."
Amazon said: "The cost of accepting card payments continues to be an obstacle for businesses striving to provide the best prices for customers."
The retailer added that costs should be going down over time thanks to advances in technology, "but instead they continue to stay high or even rise".
Visa claimed to take on average less than 0.1% of the value of a purchase. However, Amazon could benefit from the move as it provides its own credit cards, meaning many of its customers could sign up.
Martin Lewis, founder of Money Saving Expert said on Twitter on Wednesday: "It's a possible negotiating tactic for Amazon to gets its fees reduced."
It comes as cross-border transactions between firms in the UK and the European Union have risen since Brexit. Both Visa, and credit card rival Mastercard have hiked fees.
British customers makes tens of billions of pounds of purchases every year from European merchants on credit cards alone.
James Andrews, senior personal finance editor at comparison website Money.co.uk, said the move "will come as a blow to the millions of Britons" who use Visa credit cards, including Barclaycard and HSBC customers.
"With American Express also rejected by many UK retailers, that means people looking for rewards on their spending or trying to split the cost of shopping with a 0% purchase card on Amazon will be effectively forced to choose a Mastercard," he said.
Meanwhile, Shachar Bialick, founder and CEO of financial app Curve, said: “Consumers... are losing choice and flexibility when it comes to their finances. Curve is the only solution in the UK that can offset this decision by Amazon.
"Users will still be able to use their Visa Credit via Curve to shop at Amazon while continuing to earn their bank's rewards.”
Last month after Amazon opened its first '4-star' store concept outside of the US at the Bluewater shopping centre near Dartford in Kent.
Some 2,000 products rated four-star or above on Amazon’s website are on sale at the new shop, ranging from Lego sets, books and pet toys to kitchen gadgets.
The goods on sale will change regularly, depending on what is selling well online. Amazon has around 30 such stores in the US. The first 4-star store opened in New York in 2018.
Unlike its Fresh grocery store, the shop does not have Amazon's "Just Walk Out" technology. Customers can pay with cash, credit card, or through the Amazon app, but having an Amazon account is not necessary.
This is different from Amazon's no-check out grocery store, which opened in the UK earlier this year. To use that, customers need to be signed up to Amazon’s Prime subscription service, which costs £7.99 ($11) a month.
In addition to its Fresh store, the online shopping giant has also opened a hair salon and six convenience stores in Britain this year.
Visa shares slid 5% after opening in New York.
SOURCE
Martin Lewis, founder of Money Saving Expert said on Twitter on Wednesday: "It's a possible negotiating tactic for Amazon to get its fees reduced."
I must admit, that was my first thought too, and it could end up as a straightforward pissing contest between the two companies. As always, the biggest losers will probably end up being Amazon and/or Visa users.
The online retail giant blamed the decision on the card company charging high fees to process transactions over a number of years, with no additional value to its service.
The changes will come into effect as early as 19 January 2022, Bloomberg first reported, citing information that Amazon had shared with its customers this week, after they had purchased items.
Visa debit cards, as well as MasterCard and Amex credit cards, can still be used on the site, and Visa credit cards issued outside of Britain can also be used as normal.
“UK shoppers can use their Visa debit and credit cards at Amazon UK today and throughout the holiday season," a Visa spokesman said. "We are very disappointed that Amazon is threatening to restrict consumer choice in the future. When consumer choice is limited, nobody wins."
It added: “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."
Amazon said: "The cost of accepting card payments continues to be an obstacle for businesses striving to provide the best prices for customers."
The retailer added that costs should be going down over time thanks to advances in technology, "but instead they continue to stay high or even rise".
Visa claimed to take on average less than 0.1% of the value of a purchase. However, Amazon could benefit from the move as it provides its own credit cards, meaning many of its customers could sign up.
Martin Lewis, founder of Money Saving Expert said on Twitter on Wednesday: "It's a possible negotiating tactic for Amazon to gets its fees reduced."
It comes as cross-border transactions between firms in the UK and the European Union have risen since Brexit. Both Visa, and credit card rival Mastercard have hiked fees.
British customers makes tens of billions of pounds of purchases every year from European merchants on credit cards alone.
James Andrews, senior personal finance editor at comparison website Money.co.uk, said the move "will come as a blow to the millions of Britons" who use Visa credit cards, including Barclaycard and HSBC customers.
"With American Express also rejected by many UK retailers, that means people looking for rewards on their spending or trying to split the cost of shopping with a 0% purchase card on Amazon will be effectively forced to choose a Mastercard," he said.
Meanwhile, Shachar Bialick, founder and CEO of financial app Curve, said: “Consumers... are losing choice and flexibility when it comes to their finances. Curve is the only solution in the UK that can offset this decision by Amazon.
"Users will still be able to use their Visa Credit via Curve to shop at Amazon while continuing to earn their bank's rewards.”
Last month after Amazon opened its first '4-star' store concept outside of the US at the Bluewater shopping centre near Dartford in Kent.
Some 2,000 products rated four-star or above on Amazon’s website are on sale at the new shop, ranging from Lego sets, books and pet toys to kitchen gadgets.
The goods on sale will change regularly, depending on what is selling well online. Amazon has around 30 such stores in the US. The first 4-star store opened in New York in 2018.
Unlike its Fresh grocery store, the shop does not have Amazon's "Just Walk Out" technology. Customers can pay with cash, credit card, or through the Amazon app, but having an Amazon account is not necessary.
This is different from Amazon's no-check out grocery store, which opened in the UK earlier this year. To use that, customers need to be signed up to Amazon’s Prime subscription service, which costs £7.99 ($11) a month.
In addition to its Fresh store, the online shopping giant has also opened a hair salon and six convenience stores in Britain this year.
Visa shares slid 5% after opening in New York.
SOURCE
Martin Lewis, founder of Money Saving Expert said on Twitter on Wednesday: "It's a possible negotiating tactic for Amazon to get its fees reduced."
I must admit, that was my first thought too, and it could end up as a straightforward pissing contest between the two companies. As always, the biggest losers will probably end up being Amazon and/or Visa users.
