Visa is falling after amazon announced it will stop accepting Visa UK Amazon said it won't take UK-issued Visa cards as a form of payment, starting from next year, as a result of "continued high cost of payments" from the world's biggest issuer.
According to the report, Visa credit cards that were issued in other countries will be accepted by Amazon. High fees were the reason for Amazon’s decision.
The decision, which will not affect Visa debit cards, was a response to what Amazon sees as overly high transaction costs. Amazon said these should be coming down, but remain higher and are even increasing. It will stop accepting Visa credit card payments in the UK on 19 January.
“The cost of accepting card payments continues to be an obstacle for businesses striving to provide the best prices for customers,” said an Amazon spokesperson. “These costs should be going down over time with technological advancements, but instead they continue to stay high or even rise.”
In its message to customers, Amazon said: “Starting 19 January 2022, we will unfortunately no longer accept Visa credit cards issued in the UK, due to the high fees Visa charges for processing credit card transactions. You can still use debit cards (including Visa debit cards) and non-Visa credit cards such as Mastercard, Amex, and Eurocard to make purchases.”
In the meantime, Amazon will allow its U.K. customers to pay with Visa-issued debit cards. They can also choose to use credit cards issued by Visa’s rivals, including MasterCard.
Visa shares were marked 5.5% lower in mid-day trading Wednesday to change hands at $203.50 each, a move that would extend the stock’s six-month decline to around 10%.
Last month, Visa posted stronger-than-expected fourth-quarter earnings of $1.65 per share, as payment volumes rose 17% from last year and total transactions surged 21% to $45.3 billion amid a recovery in international travel and the broader post-pandemic rebound.
The online giant also asked customers to update payment methods, including for Prime membership and any subscriptions.
Visa said it is disappointing and accused Amazon of “threatening to restrict consumer choice in the future”.
“UK shoppers can use their Visa debit and credit cards at Amazon UK today and throughout the holiday season,” added a Visa spokesperson.
“We have a long-standing relationship with Amazon, and we continue to work toward a resolution so our cardholders can use their preferred Visa credit cards at Amazon UK without Amazon-imposed restrictions come January 2022.”
David Bannister, the Chief analyst at Bloor Research, said that he was so surprised by this announcement of Amazon. He thought first that it was an scam mail. “But it is not that unusual for retailers to refuse to take payments from certain cards due to costs,” he added.