Amazon and Visa reach global truce on credit card fees
Visa payment cards arranged on a computer keyboard.
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Amazon has reached a global settlement with Visa to settle a dispute over the credit card giant’s fees.
The deal announced Thursday means Amazon customers in the UK can continue to use Visa credit cards, as previously announced by the two companies. The e-commerce giant will also scrap a 0.5% surcharge on Visa credit card transactions in Singapore and Australia, which it introduced last year.
Last month, Amazon said it had dropped plans to stop accepting Visa credit cards in Britain, two days before the change was due. The companies said at the time that they would continue talks on a broader resolution to their spat.
“We recently entered into a global agreement with Visa that allows all customers to continue to use their Visa credit cards in our stores,” an Amazon spokesperson told CNBC on Thursday via email. “Amazon remains committed to providing customers with a convenient and choice checkout experience.”
Amazon has pressured Visa to lower its fees, in a series of moves that have signaled growing frustration among retailers over the costs associated with major card networks, as well as the tech giant’s market power and its influence on its partners.
Companies like Visa, Mastercard and American Express now face fierce competition from a flood of fintech challengers, ranging from “buy now, pay later” services like Klarna to open banking, a technology that enables start-ups to effectively bypass traditional payment methods such as cards. .
In a statement emailed to CNBC on Thursday, Visa said its agreement with Amazon would also see the two collaborate on “new products and technology initiatives to ensure innovative payment experiences for our customers in the future.”
The two companies declined to comment further on the terms of their agreement when asked by CNBC.
So-called swipe fees, which are charged to merchants each time a customer uses their card, have long been a point of contention for businesses.
Roger De’Ath, UK country director of fintech firm TrueLayer, said the Amazon-Visa dispute has highlighted the “fundamental need for new payment solutions”.
“For too long, cards have been embedded in online checkouts, creating an invisible web of hidden costs and cumbersome payment structures that affect every retailer’s cost base,” De’Ath said via email.