Amazon to stop accepting payments Visa credit cards in January 2022
Visa credit cards issued outside of the UK and all Visa debit cards will not be affected by the ban.
The world’s biggest online retailer has gone head-to-head with one of the largest card issuers in the world.
Come 19 January 2022, Amazon will no longer accept payments made using Visa credit cards issued in the UK.
Amazon made the decision, which itself calls “inconvenient”, because of the "high fees Visa charges for processing credit card transactions."
In a statement, Visa said: “We are very disappointed that Amazon is threatening to restrict consumer choice in the future. When consumer choice is limited, nobody wins."
Other cards issued by Visa and Visa credit cards that have been issued outside the UK will be exempt from the ban and Amazon customers can still pay with a credit card from other issuers, such as Mastercard and AMEX.
Amazon’s bold move has prompted discussions across the digitally-native fintech industry.
“The news that Amazon will stop accepting UK-issued VISA Credit Cards shouldn’t come as a surprise. Merchants continue to be stung by rising fees from the card networks, which increase transaction costs and directly impact their revenues,” Roger De’Ath, head of commerce at TrueLayer, said.
“Fundamentally, cards were not built for online commerce and have been retrofitted into digital checkouts, creating complexity and cost for merchants and friction for customers."
De’Ath added that TrueLayer has seen an increase in online merchants looking into open banking to enable instant bank-to-bank payments, reducing friction for merchants and shoppers alike.
“At a time when consumers are already facing significant financial pressures, the battle between Amazon and Visa will have an immediate impact on their choices,” Luke Massie, CEO and founder of VibePay, added.
"Rather than the likes of Visa having a monopoly on the payments industry, these battles, which we expect to see more of in the future, will open the door for fintechs who are taking advantage of technologies such as Open Banking and account-to-account payments."
Ultimately, the impact of Amazon’s decision is still unknown but could this leave the door open for fintechs to eke their way in? Or is this the perfect moment for open banking to finally have its time in the sun? Only time will tell.