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Amazon reverses decision to ban customers from using Visa credit cards

Lauretta Roberts
17 January 2022

Amazon has carried out an 11th hour reversal of a decision to ban customers from using UK Visa credit cards on its website.

The online retail giant had been expecting to introduce the changes from this Wednesday, having warned customers the card company’s fees were too high.

But Amazon said on Monday: “The expected change regarding the use of Visa credit cards  on will no longer take place on January 19.

“We are working closely with Visa on a potential solution that will enable customers to continue using their Visa credit cards on”

A Visa spokesperson added: “Amazon customers can continue to use Visa cards on after January 19 while we work closely together to reach an agreement.”

Amazon did not rule out a future ban. The website previously said it has made the decision due to “the high fees Visa charges for processing credit card transactions”.

Amazon customers reported on Twitter that they had started to receive emails from the retailer, which confirmed they could continue using their cards as they do today and advance notice would be given if any changes related to Visa cards were made.

One Twitter user wrote: “I wasn’t going to get a new credit card but use it as another incentive not to use them.”

Another wrote: “Ended up getting an Amex with plan to use that instead on Amazon, but it’s now given me a card that has much better cashback (didn’t realise cashback on old Visa had ended) so worked out for me in the end.”

A further commentator wrote: “Made no attempt to change cards as I always thought they would sort it out – which they appear to have done.”

The Payment Systems Regulator (PSR) previously said it had been in contact with Amazon and the big card schemes. Meanwhile The Federation of Small Businesses (FSB) claimed previously that scheme fees charged by card providers had soared in recent years.

Neil Smith, head of strategic partnerships at Forter, a software as a service company that provides fraud prevention technology for online retailers and marketplaces, said the move “could signal a degree of compromise from both companies” after a 2021 survey revealed a potential £1.4bn loss for the e-commerce giant from the move.

“Given Amazon’s UK market share, it’s likely that Visa has agreed to negotiate on the fees it charges for credit card transactions – and may even have agreed to follow MasterCard’s position,” Smith said.

“Even a significant reduction in Visa’s processing fees would be worthwhile in order to avoid the substantial loss of volume that access to Amazon’s eCommerce marketplace offers.

“From a security perspective, this U-turn is beneficial for existing Amazon UK customers with a Visa-issued credit card, who can benefit from industry-leading secure customer authentication.

“Without the ability to use PayPal at the point-of-checkout on Amazon (consumers can go through a long and tedious process to do so, such as using PayPal funds to purchase gift cards), consumers may be tempted to look at alternative methods that do not have as-stringent security verification in place

“As far as Visa is concerned, if they have agreed to negotiate, they will feel the impact from the loss of processing fees from Amazon UK, and this may also set a precedent when negotiating with other retailers,” Smith added.

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