Amazon suspends plans to stop accepting Visa credit card payments starting this week
Amazon has reversed its decision to block customers from using UK Visa credit cards on its website.
The world’s biggest online marketplace expected to introduce the changes from Wednesday January 19, after warning customers before Christmas that the card company’s fees were too high. However, Amazon said on Monday that the planned changes “will no longer take place.”
In a statement, the global retailer said: “The expected change to the use of Visa credit cards on Amazon.co.uk will no longer take place on January 19.
“We are working closely with Visa on a potential solution that will allow customers to continue using their Visa credit cards on Amazon.co.uk.”
A Visa spokesperson added: “Amazon customers can continue to use Visa cards on Amazon.co.uk after January 19 while we work closely to reach an agreement.”
However, Amazon has not ruled out a future ban.
The website previously said it made the decision because of “high fees charged by Visa for processing credit card transactions.”
Amazon customers reported on social media that they had started receiving emails from the retailer confirming they could continue to use their cards as they do today and that notice would be given if changes related to Visa cards were made.
The Payments Systems Regulator (PSR) has previously said it has been in contact with Amazon and major card schemes.
And the Federation of Small Businesses (FSB) has previously claimed that system fees charged by card providers have skyrocketed in recent years.
Commenting on the last-minute postponement, Neil Smith, Head of Strategic Partnerships EMEA and APAC, Forter, said: “Updating Amazon UK today will be a relief for customers who don’t want the inconvenience of having to go through to an alternative method of payment. methods. However, the announcement was hardly surprising as there has been a lot of speculation in recent days about who would back down first.
“The email from Amazon, stating that ‘we are working closely with Visa on a potential solution that will allow customers to continue using their Visa credit cards…’ may signal a degree of compromise on the part of of the two companies, with a 2021 survey indicating a potential loss of £1.4 billion for the e-commerce giant.However, given Amazon’s market share in the UK, it is likely that Visa has agreed to negotiate the fees it charges for credit card transactions – and even agreed to follow MasterCard’s position.
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Neil also explained how even a significant reduction in Visa’s processing fees would help in order to avoid the substantial loss of volume that access to Amazon’s e-commerce marketplace offers.
He continued: “From a security perspective, this U-turn is beneficial for existing Amazon UK customers with a Visa-issued credit card, who can benefit from state-of-the-art secure customer authentication. ‘industry.
“Without the ability to use PayPal at the point of payment on Amazon (consumers may go through a long and cumbersome process to do so, such as using PayPal funds to purchase gift cards), consumers may be tempted to consider alternative methods that do not have such strict security verification in place.
As far as Visa is concerned, if they agreed to negotiate, they will feel the impact of Amazon UK’s loss of processing fees, which could also set a precedent when negotiating with other retailers.
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