Reversal! Amazon no longer bans Visa credit cards

Amazon announced last year that it would no longer accept Visa-issued credit cards on its UK site starting January 19, 2022. But on Monday, Amazon said it would continue to accept Visa credit cards on its UK site.

Amazon said in an email to customers that the two sides were "working closely on a potential solution that would enable customers to continue using their Visa credit cards at Amazon.co.uk".

Amazon did not say what the solution is or how long it might last, but added that it would notify users in advance if the platform makes any changes to Visa credit cards.

Amazon announced in November last year that it would ban Visa credit cards from being used on Amazon UK due to their high transaction fees . Visa said at the time that it was very shocked and would negotiate a solution with Amazon .

The two companies have had disputes in the past, and last year Amazon announced plans to add a 0.5% fee to Visa credit cards in Australia and Singapore . However , it is not clear why Amazon has abandoned its plans to ban Visa credit cards on its UK site , nor is it clear whether this move is final or temporary.

According to the editor, after Brexit, the EU's cap on credit card interchange fees no longer applies to the UK . Both Visa and Mastercard have increased interchange fees, cutting digital transactions between the UK and the EU.

However, Amazon and Visa said the dispute had nothing to do with Britain's exit from the European Union. Instead, Amazon 's move was interpreted by experts as a way for it to bargain with Visa for lower fees .

According to David Ritter, financial services strategist at CI&T, “ Amazon ’s shift is not surprising. ” Customers’ Visa cards may be linked to digital wallets such as Apple Pay, Google Pay and PayPal, as well as Amazon Prime membership subscriptions , and it is difficult to ban their use .

Ritter mentioned that Amazon is a retail giant with industry leverage, but it is impossible for it not to accept Visa cards . More likely, this is Amazon 's pressure strategy.

Retail giants tend to use custom rates with payment companies rather than the rates published by payment companies . Amazon's move may be a means to reach a long-term rate agreement or even a way to maintain current rates .

Regardless of the final outcome of the negotiations, the latest twist in the saga between the two companies undoubtedly once again highlights the brand power of Amazon , whose initial ban has now pushed the public debate over card merchant fees into the mainstream .

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