The episode matters because it demonstrates Amazon’s ability to make card acceptance a negotiating lever. A later eBay decision to drop American Express over fees shows that large marketplaces can similarly challenge card-network pricing.
First-order effects
UK customers using Visa credit cards issued in the UK would need to use another payment method for Amazon purchases once the restriction took effect.
Visa faces an immediate threat to acceptance on one of the UK’s largest online retail checkouts, while Amazon signals it will not absorb the cited transaction costs.
Second-order effects
The threatened restriction shifts the dispute into direct commercial negotiations: Amazon can trade access to its checkout for lower Visa costs, a dynamic borne out by the later reversal and global agreement.
Other large merchants gain a concrete precedent for using payment-method acceptance to contest network fees, as eBay later did with American Express.
Third-order effects
If major marketplaces keep treating payment acceptance as a negotiable input, card networks’ broad merchant acceptance becomes less uniform and more dependent on bespoke commercial terms.
Amazon doesn't offer much detail, but from what I understand this move isn't just about interchange. There are other charges, like scheme fees. Here's the full statement from the company: https://twitter.com/...
Doesn't this just confirm that the trope of Amazon being “customer obsessed” is just nonsense? Horrible site/app and now this. https://www.bloomberg.com/...
I don't have a Visa credit card linked to my Amazon account - just a debit card. And they know that. They could, I presume, have only emailed people effected rather than all customers. This feels like a bit of muscle flexing/the opening of a negotiation. https://twitter.com/...
It could be a way to get some bargaining power over Visa to lower fees. Smaller retailers aren't in a position to negotiate, but Amazon - given its size - might be. Visa is clearly bruised by this decision, though, and it could damage their relationship in the long run.
Amazon and Visa are involved in a very public spat over credit card processing fees. UK-issued Visa CCs won't be accepted from January 19th, 2022 — unless an agreement is struck before then. https://www.engadget.com/... Note: Amazon UK has partnerships with Mastercard and AMEX 🤣.
Visa is unhappy (as you'd expect). Spokesperson tells me the company is “very disappointed” and says Amazon is trying to “restrict consumer choice.” “We have a long-standing relationship with Amazon, and we continue to work toward a resolution.”
Specifically, fivefold rise in credit card interchange fees arises out of having left EU and then having also chosen to leave the single market/ European Economic Area - it is a classic example of an increase in Non-Tariff Barriers to trade with Europe, as a result of the deal
Blimey. Amazon blaming ‘high fees’ for not accepting UK-issued Visa cards from January. I suspect this won't wash with customers. Playing hardball on deals by using the public as a bargaining chip is never a good look. https://twitter.com/...
Huge blow to Visa this morning, as Amazon tells UK customers it will no longer accept Visa credit cards starting 19th Jan 2022. The changes are being made “ due to the high fees Visa charges for processing credit card transactions,” Amazon says. https://www.cnbc.com/...
While a lot of Amazon customers won't welcome this news, many consumers have an alternative payment option. I definitely think that Visa is most likely to blink first here. https://twitter.com/...
some Visa specific issues here, its application of fees was more widespread than MAsterCard's - applying bilaterally to UK cards for EU merchants & vice versa. clearly a powerplay between Amazon and Visa trying to take a leaf out of Walmart tactics, but wouldn't arise in EU..
While today's inflation number isn't significantly about Brexit (energy - global, used cars - semiconductor shortage) - the Visa-Amazon fallout arises out of Brexit - the UK no longer being capped under EU law for its interchange fees. Was 0.3% up until last year, now 1.5% for UK…
Brits will still be able to use Visa debit cards and non-Visa credit cards like Mastercard and Amex. Here's the email Amazon sent to customers: https://twitter.com/...