Amazon will now accept Visa credit card payments across all of its sites.
Following a global agreement between the two companies, Amazon will now accept Visa cards across all of its sites worldwide.
Visa and Amazon have now settled their conflict, allowing them to reach an agreement ending the conflict between Visa and Amazon, where Amazon threatened to cut payment acceptance from the credit card company due to high surcharges.
However, while the specifics of the agreement were not disclosed, Visa and other payment cards have been under increased pressure to reduce their fees as more shoppers have turned to the internet during the pandemic.
Visa's Increased Surcharges
The inflated prices in payments come to the forefront in the United Kingdom following the repeal of an EU-imposed cap on credit card fees as a result of the Brexit. Furthermore, neither side of the companies specified what fees would be levied in the future.
According to Reuters, last October 2021 in the U.K., Visa began charging 1.5% of the transaction value for credit card payments made online or over the phone and a 1.15% increase for debit card transactions, up from 0.3% and 0.2%, respectively.
According to industry analysts, the average credit card processing fee across the industry ranges between 1.5% and 3.5%.
Conflict Between Amazon and Visa
Amazon had previously stated that it was considering dropping Visa as a partner on its United States co-branded credit card, following the announcement that it would stop accepting Visa credit cards in the U.K. due to high transaction fees in November 2021.
Earlier this year, the U.K. Payment Systems Regulator undertook an investigation into the credit card fees and revealed that they had substantially escalated in recent months.
As reported by BBC, when Amazon was considering a ban on accepting Visa credit cards in the U.K. in 2021, the company stated that the cost of processing payments was "an obstacle" to providing customers with the best prices possible.
In addition, customers in Singapore and Australia who used a Visa credit card to purchase were charged a surcharge for the transaction.
Amazon Accepting Visa After Reaching an Agreement
However, Engadget reported that in light of Visa's dominance in the payment market, it appeared likely that Amazon would not follow through on its threat.
Indeed, Amazon announced shortly before the deadline that it would continue to accept the cards after all and stated that they are "closely working with Visa on a potential solution."
In other countries, Amazon has not prohibited or threatened to prohibit the use of Visa cards; however, in Australia and Singapore, it has begun charging an additional transaction fee to customers who use Visa cards. That charge has now been voided, and it appears that Visa and Amazon have put the whole thing behind them as well.
A Visa spokesperson said in a statement that the 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."
