Amazon.com Inc. has announced it would stop accepting payments made with UK-issued Visa credit cards in January.
The e-commerce giant announced the decision in an email to users of the site Wednesday, citing high transaction fees charged by the payment processor.
“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.”
The company said its customers can still use Visa debit cards, Mastercard and Amex credit cards, and Eurocard, but acknowledged that the change would be “inconvenient” for some customers.
“The cost of accepting card payments continues to be an obstacle for businesses striving to provide the best prices for customers. These costs should be going down over time, with technological advancements, but, instead, they continue to stay high or even rise,” a spokesperson for the retailer said in a statement.
“As a result of Visa’s continued high cost of payments, we regret that Amazon.co.uk will no longer accept UK-issued Visa credit cards as of 19 January 2022.”
Since Brexit, an EU-enforced cap on fees charged by card issuers is no longer in place in the United Kingdom.
The move by Amazon has prompted the UK Trade Commission to urge the government to improve the UK-EU trade agreement. In addition, analysts called on British regulators to look into the fees in the credit card market.
“If Amazon can’t make it work, with all their resources and ability to navigate legislation to avoid costs, then small businesses have no chance and so the government must improve the UK-EU trade and cooperation agreement to keep British businesses competitive,” said Tamara Cincik from UK Trade and Business Commission
READ ALSO: Former Indian Foreign Minister’s house set ablaze by Hindu extremists
Interchange fees, which are typically a percentage of the cost of the transaction, are higher for credit card transactions and for those where purchases are made remotely, including online sales.
In a statement, Visa said it was “very disappointed” by Amazon’s decision which threatens to restrict consumer choice in the future.
“When consumer choice is limited, nobody wins. We have a longstanding 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.”
James Andrews, from the comparison website money.co.uk, said the decision would have a bad impact on the millions of UK shoppers who had Visa credit cards, including customers of Barclaycard and HSBC.
“With American Express also rejected by many UK retailers, that means people looking for rewards on their spending or trying to split the cost of shopping with a 0% purchase card on Amazon will be effectively forced to choose a Mastercard,” he said.
