The recent Amazon-Visa spat wont hinder cardholders in the U. S. as they go about their holiday shopping — but there still could be some fallout later.
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UPDATE: The two sides ended their argument in February 2022 by saying that Visa cards will be accepted at all Amazon stores around the world. A Visa spokesperson said by e-mail in part, “This agreement includes the acceptance of Visa at all Amazon stores and sites today, as well as a joint commitment to collaboration on new product and technology initiatives to ensure innovative payment experiences for our customers in the future. ”.
Corporate goliaths Visa and Amazon are publicly clashing, but U. When they shop at the big store for gifts this holiday season, U.S. customers don’t have to worry that their Visa cards will not be accepted.
The brouhaha is over fees Amazon pays Visa for processing payment transactions in the United Kingdom. Amazon claims those fees are too high and says it will stop accepting Visa credit cards on Jan. 19, 2022.
But Americans just skimming headlines might miss the fact that this issue involves Amazon in the U. K. , not in the United States. For now, anyway. There’s been no move by Amazon — at least publicly — to ban Visa cards as a payment method for U. S. shoppers.
Asked about how the dispute would affect U. S. customers, an Amazon spokesperson in the U. K. said by email: “We don’t have anything further to add, but to be clear, this action only applies to U. K. -issued Visa credit cards used on Amazon. co. uk. “.
Visa credit cards have long been a popular payment method on Amazon. However, recent news headlines may have some shoppers wondering – is Amazon no longer accepting Visa cards?
The short answer is that Visa credit and debit cards can still be used at Amazon in the US. But there is a dispute going on between Amazon and Visa in the UK, and as of January 19, 2022, Visa credit cards will no longer be accepted on Amazon’s UK website.
This article will break down the details of the Amazon-Visa dispute and what it means for shoppers in the US and UK
A Breakdown of the Amazon-Visa Dispute
In November 2021 Amazon announced that starting January 19, 2022, they will no longer accept Visa credit cards on their UK website, Amazon.co.uk.
Amazon stated that the reason behind this decision is the high fees charged by Visa to process transactions A spokesperson for Amazon said
“The cost of accepting credit cards is still a problem for companies that want to offer the best prices to customers.” Since technology is getting better over time, these costs should be going down over time. Instead, they stay high or even go up. ”.
Visa denied that their fees are excessive and said they are disappointed Amazon is threatening to restrict consumer choice.
This dispute only applies to Visa credit cards issued in the UK. Debit cards and non-UK issued Visa credit cards will still be accepted on Amazon’s UK site after the January 19 deadline.
What This Means For UK Shoppers
For customers shopping on Amazon.co.uk, this change means Visa credit cards issued in the UK will no longer be accepted as a payment method starting January 19, 2022.
Shoppers will need to use an alternate payment method such as:
- Debit cards (including Visa debit)
- Credit cards from other providers like Mastercard or American Express
- Amazon gift cards
- Amazon store card
UK shoppers should make sure they have an alternate payment method ready to use for Amazon purchases after January 19. Otherwise, they may experience disruptions when trying to check out.
Will This Affect US Shoppers?
For now, the fight between Amazon and Visa only affects Visa credit cards that were issued in the UK.
Amazon is still accepting all Visa credit and debit cards issued in the US.
People in the US can still use their Visa cards on Amazon without any problems. This includes popular cards like:
- Visa Rewards Signature Card
- Amazon Prime Visa Card
- Amazon Rewards Visa Card
For now, it’s business as usual for US customers paying with Visa cards on Amazon.com.
The Speculation: Could This Spread to the US?
While Amazon has not made any announcements about ending Visa acceptance in the US, there has been some speculation this dispute could spread.
Here are a few reasons why:
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There are reports that Amazon may shift their US co-branded credit card from Visa to Mastercard. This would affect cards like the Amazon Prime Visa and Amazon Rewards Visa.
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Amazon has taken additional actions against Visa in other countries beyond just the UK, like increased credit card fees in Australia.
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Amazon seems intent on encouraging customers to use payment methods other than Visa credit cards across all of its sites.
However, this is just speculation for now. Amazon has not made any statement that they will ban Visa in the US.
For US customers, it’s probably not necessary to switch from a Visa to Mastercard just yet. But it’s something to keep an eye on in case the situation changes.
Why Did This Dispute Happen in the First Place?
There are a few possible reasons behind Amazon’s decision to ban Visa credit cards in the UK:
1. Interchange Fees
Interchange fees are transaction fees paid by merchants to card issuers like Visa or Mastercard. Amazon may feel that Visa’s interchange fees are excessive.
2. Brexit
Some speculate this dispute is related to Brexit, as EU regulations previously capped interchange fees in the UK. However, Amazon denies that Brexit is a factor.
3. Promoting Alternate Payment Methods
Banning Visa credit cards may be a move by Amazon to encourage use of cheaper payment options like debit cards and Amazon’s own payment services.
4. Negotiation Tactic
Some experts think this may be a negotiating tactic by Amazon to get better rates from Visa.
The true motives are unclear, but likely involve a combination of these factors.
What Happens Next?
Many are watching closely to see how the situation between Amazon and Visa evolves, both in the UK and other markets like the US.
Here are some possibilities of what may happen next:
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Amazon and Visa could reach an agreement before January 19th. This would likely involve lower interchange fees from Visa.
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Amazon rolls out the Visa ban in the UK as planned. This would be hugely disruptive for UK customers without alternate payment methods.
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The dispute spreads to the US or other countries. More speculation will occur if Amazon starts making moves against Visa in additional markets.
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Amazon switches its co-branded US card from Visa to Mastercard. This would inconvenience customers who use the Amazon Visa cards.
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Regulators get involved. Government antitrust authorities may intervene if Amazon’s actions seem anti-competitive.
For now, customers don’t need to take action and can continue using Visa cards with Amazon. But it’s worth monitoring the situation as it continues to develop.
The Bottom Line
While headlines about Amazon no longer accepting Visa are concerning, currently this only applies to Visa credit cards issued in the UK.
US customers can still use their Visa cards on Amazon without disruption. However, there is speculation this dispute could spread to the US given actions Amazon has taken against Visa globally.
For now, US shoppers do not need to preemptively switch from a Visa to a Mastercard. But it’s a situation worth watching in case the acceptance policy changes in the future.
Stay up to date on the latest news about this dispute, and have a backup payment method ready just in case. With smart preparation, shoppers can check out smoothly on Amazon regardless of how this situation evolves.
What Amazon claims
Visa and other payment networks like Mastercard act as middlemen between banks and merchants and get paid fees for that service. Those fees are the crux of the issue.
“The cost of accepting card payments continues to be an obstacle for businesses striving to provide the best prices for customers,” the Amazon spokesperson said about the dispute in the U.K. “These costs should be going down over time with technological advancements, but instead they continue to stay high or even rise.”
He added that the plan to stop accepting Visa in the U.K. affects credit cards only, not also debit cards.
“With the rapidly changing payments landscape around the world, we will continue innovating on behalf of customers to add and promote faster, cheaper, and more inclusive payment options to our stores across the globe,” he said.
A Visa spokesperson noted by email that U.K. shoppers will still be able to use Visa cards through the holiday season.
“We are very disappointed that Amazon is threatening to restrict consumer choice in the future. When consumer choice is limited, nobody wins,” she said. “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.”
But U.S. cardholders could face some fallout later
Still, Amazon is reportedly clashing with Visa on other fronts as it considers shifting its popular co-branded credit card from Visa to Mastercard, according to news reports from Bloomberg, Associated Press and Reuters. And that move would have ramifications in the U.S.
Anytime a credit card changes payment networks or issuers, it can cause headaches for cardholders caught in the middle. For instance:
- Card benefits can change.
- Old transaction histories and records can be lost.
- Credit scores can drop for brief periods.
- Account numbers may change, meaning autopay bills could be affected.
Amazon currently has multiple co-branded credit cards through various partners:
- A credit card issued by Chase has Visa in the name: the Prime Visa. It’s highly regarded by consumers because for Amazon Prime members it offers 5% cash back on purchases at Amazon and Whole Foods for an annual fee of $0.
- Customers without a Prime membership can apply for a different Visa credit card, the Amazon Visa, also issued by Chase.
- Amazon co-branded cards for businesses are issued by American Express.
- Amazons “closed-loop” store cards, which can be used only at Amazon, are issued by Synchrony Bank.
Visa processes card payments, but it doesnt issue credit cards. A card with the “Visa” brand name on it runs on that payment network, but it is issued by a bank, not by Visa.
NEWS: Amazon ditching Visa? (And falling into the arms of Mastercard ? )
FAQ
Why did Amazon stop accepting Visa credit cards?
Amazon had announced in November last year that it would no longer accept Visa credit cards as payment from 19 January 2022 and blamed the move on Visa’s card fees. What happens if you buy something with a debit card with no money? If you don’t have enough funds in your account, the transaction will be declined.
Does Amazon accept Visa credit cards?
By Jon Porter, a reporter with five years of experience covering consumer tech releases, EU tech policy, online platforms, and mechanical keyboards. After reaching a global agreement, Amazon will continue to accept Visa credit cards. This comes just a few weeks after the retail giant said it might stop accepting Visa credit cards in the UK.
Why did Amazon ban visa?
Amazon (AMZN) said in November it would ban Visa’s card because of the high transaction fees charged by the payment processor. It said customers could still use Visa’s debit cards, along with Mastercard and Amex credit cards and Eurocard. What is happening with Amazon and Visa?.
Why is my credit card not accepted on Amazon?
Payments might not go through if: You entered the wrong debit or credit card information, like the wrong card number, CVV, or expiration date; Your card may be blocked for online transactions. You might be using a card that is not accepted on Prime Now App currently. Will Amazon accept Visa credit card?.
What’s the difference between a visa & a Amazon card?
Amazon’s “closed-loop” store cards, which can be used only at Amazon, are issued by Synchrony Bank. Visa processes card payments, but it doesn’t issue credit cards. On that payment network, there is a card with the word “Visa” on it, but it was made by a bank, not Visa. » MORE: Visa vs. Mastercard: What’s the difference?.
Are Amazon & visa resolving a dispute?
Amazon and Visa appear to have agreed an 11th-hour resolution to their bitter dispute after the online retailer told customers they can continue using Visa credit cards on the site. In November, Amazon told customers that from 19 January it would stop accepting payments made with UK-issued Visa credit cards.
Why is Amazon no longer accepting Visa credit cards?
Why did Amazon drop Visa? Amazon cited Visa’s “outstandingly bad” credit card fees as the motive behind dropping the scheme.
Does Amazon not take Visa?
Credit cards currently accepted include Visa, Mastercard, Discover, American Express, Diners Club, and JCB.
Why won’t my Visa gift card work on Amazon?
What payments does Amazon accept?