Amazon Suspends Blocking UK Visa Credit Cards As The Two Firms Continued To Negotiate

Amazon has suspended its plans for blocking UK Visa credit card payments this week even as the two parties work out a payment fee issue.

“The expected  change regarding  the use of  Visa credit cards on Amazon.co.uk will no longer take place on January 19,” Amazon said.

It was “working closely to reach an agreement”, Visa said.

Last year, Amazon stated that costs for Visa payments were an “obstacle” to offering customers the best prices.

Visa however retaliated, saying that Amazon was threatening to reduce choices available to customers. “When consumer choice is limited, nobody wins,” Visa said.

Neither firms have said when the negotiations will het finished. It was working closely with Visa on “a potential solution that will enable consumers to continue using their Visa credit cards on Amazon.co.uk”, Amazon said in an email to customers on Monday.

Following Brexit, the UK is no longer subject to an EU-imposed fee cap on card issuers.

Following Brexit, both Visa and its competitor Mastercard increased the so-called interchange fee on cross-border transactions between firms in the United Kingdom and the European Union.

Last year, though, Amazon and Visa stated that their disagreement had nothing to do with the UK’s exit from the EU.

These two corporate heavyweights have been battling it out in public and private, and now they’re going for a third round.

In this match, Amazon has a clear advantage in terms of points. Given the timing of this statement, many Amazon customers would have already shifted their principal payment option away from Visa.

The fact that the deadline was canceled and no new deadline has been established means that a deal is closed. Neither Amazon nor Visa is saying anything, so it’s difficult to tell how close they are to a deal.

There’s more to this argument than just costs. It’s also about having the upper hand. Don’t forget that Amazon and Mastercard, the company behind Amazon’s reward card, have taken a different path.

on previous occasions, Amazon has refused to reveal how much Visa charges the store to process credit card transactions.

Visa likewise declined to comment, claiming that it takes less than 0.1 percent of a purchase’s value on average.

The Payment Systems Regulator is concerned about the lack of competition in this industry, which is dominated by Visa and Mastercard.

One of its aims, according to a strategy released last week, is to increase competition among UK payment systems.

“We will focus more on improving competition between payment systems, not just competition within payment systems,” its managing director Chris Hemsley said.

“This is important because we know that the future of retail payments is becoming increasingly about digital payments, most of which are currently made using card payment systems.”

(Adapted from BBC.com)

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