Amazon Blocks UK Visa Credit Cards in Payment Fee Row
Sep 8, 2023
Amazon will no longer accept payments from Visa credit cards issued in the UK, saying card payment fees are an ‘obstacle’ to businesses in keeping costs low for their customers.
Cards issued in the UK from 19 January 2022 will be blocked following a sharp rise in interchange fees being charged by Visa. Under EU law, these fees are capped at 0.3 percent, but since Britain left the EU, Visa has been able to raise them to a current 1.5 percent.
In its report, The Verge points out Visa is not the only company introducing fee hikes, with MasterCard also charging 1.5 percent but still being allowed by Amazon. Senior reporter James Vincent theorises the ban on Visa may be ‘a strategic decision to hurt one company instead of taking on an entire industry’, or alternatively there may be specific problems with Visa’s policies (such as rules pertaining to e-commerce, and thus Amazon directly).
The cost of accepting card payments continues to be an obstacle for businesses striving to provide the best prices for consumers. These costs should be going down over time with technological advancements, but instead they continue to stay high or even rise.
Interchange fees are a hot topic worldwide, with businesses repeatedly calling for tighter regulations on how much can be charged, while Mastercard and Visa are reportedly facing lawsuits pertaining to overcharging businesses for card payments.
The ongoing issue—highlighted in the Amazon statement, suggesting costs should be lower rather than higher as payment technologies improve—makes a strong case for the importance of cash as a competitor to cashless options. While cash can be used free-of-charge for the customer, and anonymously, cashless options require third parties that can not only raise the price of using their services for businesses—who may then pass on the cost to customers—but also collect transaction data that can be monetised for a double dip profit.