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Fee Dispute: Amazon to stop accepting Visa cards in the UK

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Amazon.comVisa clashes with Amazon over fees - Fee Dispute:  Amazon to stop accepting Visa cards in the UK Inc’s latest spat with Visa shows big retailers, armed with a growing array of payment options, are gaining the upper hand in their power struggle with card providers, but it’s not a crisis for the payment company.70c8fc80 - Fee Dispute:  Amazon to stop accepting Visa cards in the UK

Amazon said last week that it would stop accepting Visa credit cards issued in the United Kingdom from Jan. 19, 2022, saying that despite technology advancements the fees on such transactions remained high or in some cases were rising.

While Amazon may yet back down on the UK front, where the company accounts for less than one per cent of Visa’s credit card volume, according to an estimate by Piper Sandler analysts, the dispute is a bad sign for the card industry. Some analysts said it could presage a fight in the much bigger U.S. market.

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“Amazon is treating this dispute with Visa as an experiment,” said Piper Sandler analyst Christopher Donat. “Our biggest concern is that Amazon seeks concessions from Visa in other geographies.”

Visa Chief Financial Officer Vasant Prabhu told Reuters in an interview on Friday that he expected a resolution. “We’ve resolved these things in the past and I believe we’ll resolve them in the future,” he said. Amazon declined to comment.

Credit cards dominated a third of North American e-commerce spending in 2020, according to payments giant WorldPay, but mobile payment options like Venmo and ‘buy now, pay later’ (BNPL) financing plans are chipping away at their market share.

While alternative payments have been growing for years, the pandemic accelerated a downward trend in credit card applications boosting the popularity of BNPL financing, especially among younger consumers.

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Credit cards’ share of North American e-commerce spending declined seven per cent last year, according to WorldPay, while BNPL’s share increased 78 per cent, making it the fastest-growing form of payment.

In August, Amazon partnered with BNPL provider Affirm to offer installment financing option on U.S. Amazon purchases.

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NCFA Jan 2018 resize - Fee Dispute:  Amazon to stop accepting Visa cards in the UK The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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