Technology

Amazon no longer accepts Visa credit cards issued in the UK

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Leon Neal | Getty Images News | Getty Images

LONDON – Amazon plans to stop accepting payments via UK-issued Visa credit cards starting next year.

The e-commerce giant has told some customers that as of January 19, the company will no longer accept Visa credit cards issued in the UK “because of the high fees Visa charges for processing credit card transactions.”

Visa shares fell 2.5% in pre-trading in the US.

Earlier this year, Visa increased the interbank fees it charges merchants for processing digital transactions between the UK and the European Union.

After Brexit, the UK will no longer have an EU ceiling on interchange fees, so card networks can increase their fees.

Mastercard has also increased UK-EU interchange fees.

Amazon customers have been told they can continue to use debit cards – including those issued by Visa – and non-Visa credit cards such as Mastercard and American Express. Users are encouraged to update their default payment method prior to the changes. The news was first reported by Bloomberg.

Visa said it was “very disappointed that Amazon threatens to limit consumer choice in the future”.

“Buyers in the UK can use their Visa debit and credit cards on Amazon UK today and throughout the holiday season,” a Visa spokesman told CNBC.

“We have a longstanding relationship with Amazon and we are continuing to work on a solution so that from January 2022 our cardholders can use their preferred Visa credit cards on Amazon UK without any restrictions imposed by Amazon.”

Amazon beat up Visa for its high card fees. “The cost of accepting card payments continues to be a barrier to businesses striving to offer their customers the best prices,” a company spokesman told CNBC.

“These costs should decrease over time as technology advances, but instead they stay high or increase.”

The move could be seen as a way for Amazon to gain some bargaining power over Visa to lower its fees. The payment company also charges companies to become part of their network.

While smaller retailers are unable to bargain, Amazon – given its size – may be luckier.

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