(Bloomberg) —
Amazon.com Inc. will stop accepting payments made using Visa Inc. credit cards issued in the U.K. starting next year, the latest attempt by retailers to push back against transaction fees charged by payment networks.
Amazon users were told of the changes this week. After making purchases they received a notification from Amazon saying that “starting 19 January 2022, we will no longer accept Visa credit cards issued in the U.K.” due to the high fees charged by Visa to process transactions.
Customers can still use Visa debit cards, as well as MasterCard Inc. and American Express Co. credit cards, as well as Visa credit cards issued outside of the U.K., according to an email the retailer sent Wednesday. The message offered twenty pounds ($27) off their next purchase to customers who set a debit or non-Visa credit card as their payment default.
“The cost of accepting card payments continues to be an obstacle for businesses striving to provide the best prices for customers,” a spokesperson for Amazon said. “These costs should be going down over time with technological advancements, but instead they continue to stay high or even rise.”
Card fees are already a flashpoint between merchants, banks and payment networks such as Visa and Mastercard. Retailers have long complained about the billions they spend each year to accept electronic payments, a figure that’s grown in recent years as fees increase and consumers flock to premium cards, which carry higher interchange rates.
Visa Shares
Visa shares slipped in U.S. premarket trading.
“We are very disappointed that Amazon is threatening to restrict consumer choice in the future. When consumer choice is limited, nobody wins,” a Visa spokesman said in an email. “We have a long-standing relationship with Amazon, and we continue to work toward a resolution.”
Last year, Visa planned a raft of changes to the rates U.S. merchants pay to accept its cards, Bloomberg reported. The company’s interchange rates — fees charged every time a consumer uses a card — went up or down depending on the merchant and the way a consumer pays for their purchases, according to a document Visa sent to banks last year outlining the changes. It set out higher rates for transactions on e-commerce sites, while retailers in certain services categories, such as real estate and education, saw fees decline.
(Updates with comment from Amazon and details throughout.)
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