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Amazon to Stop Accepting U.K.-Issued Visa Credit Cards
Visa says it is trying to resolve the matter so customers can continue using its cards after a Jan. 19 deadline
An Amazon store in Dartford, England. The company said it will stop accepting U.K.-issued Visa credit cards in January.PHOTO: DAN KITWOOD/GETTY IMAGES
By
Margot Patrick
Updated Nov. 17, 2021 9:54 am ET
Amazon. AMZN +0.56% com Inc. said it would stop accepting Visa Inc. V -5.29% U.K. credit cards because of their high fees, a move that marks a major escalation in the retail giant’s yearslong battle with the card network.
Amazon told customers it would stop accepting Visa credit cards issued in the U.K. starting Jan. 19. High interchange fees on credit-card transactions mean higher prices for shoppers, an Amazon spokesman said.
“These costs should be going down over time with technological advancements,” he said, “but instead they continue to stay high or even rise.”
Visa said it is trying to resolve the situation so customers can keep using their U.K. credit cards after the January deadline. “We are very disappointed that Amazon is threatening to restrict consumer choice in the future,” a Visa spokesman said.
Visa shares fell more than 5% Wednesday morning.
Retailers and card networks have been fighting over interchange fees for years.
When a shopper pays with a credit card, the merchant pays a fee to the bank that issued it. Card networks like Visa and Mastercard Inc. set those fees. The fees vary—credit cards that pay out perks like travel rewards are more expensive—but often run 2% or more.
Amazon and other large merchants have sued Visa, Mastercard and large card-issuing banks, alleging they collude to avoid competing over fees. The merchants say card fees are a hidden tax on lower-income consumers, who are more likely to pay with cash and thus don’t reap the benefits of rewards cards.
The fee fight led supermarket chain Kroger Co. to temporarily stop accepting Visa cards at some of its stores a few years ago.
Online retailers like Amazon are more reliant on credit cards and other digital payments and are especially sensitive to interchange fees. Card networks typically impose higher fees on online purchases because they are deemed more vulnerable to fraud.
It is offering some customers affected by the U.K. move £20 (or about $27) off a purchase to encourage them to update their payment method to another type of credit card or a Visa debit card. (Debit cards carry lower interchange fees.)
Amazon, with JPMorgan Chase & Co., has its own credit card that runs on the Visa network in the U.S. The card, which offers Amazon Prime members cash back on purchases, is one of the most widely used co-branded credit cards in the U.S., according to a July 2021 report by Packaged Facts, beating out airline and hotel cards.
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