Amazon just said it will no longer block UK Visa Credit cards from Wednesday, as the e-com giant initially planned to do.
Under a last minute deal, UK-issued cards will still be allowed to carry payments, the company said.
Amazon said it is “in talks” with Visa to reach an agreement.
Responding to today’s news, David Ritter, a financial services strategist at digital consultancy CI&T, said that it would have ultimately been too difficult for Amazon to call a monopoly on this, especially since cards issued tend to sit behind digital wallets, and Amazon’s automatic subscriptions, such as Prime, tend to be tied to Visa cards.
“This makes it too much hassle for consumers. Rather, it was more likely that Amazon was applying pressure tactics to negotiate a longer-term agreement on rates,” Ritter explained to City A.M.
Meanwhile, David Beard, editor-in-chief and personal finance expert of financial comparison site Lendingexpert.co.uk, was not surprised by Amazon’s u-turn.
“Dictating to consumers how they can pay was an arrogant move by the retail giant.”David Beard
“Amazon could have lost customers because they were forcing them to make a decision; either switch to pay with a debit card or apply for a new Mastercard.,” Beard told City A.M.
“Switching to pay for items with a debit card meant customers would no longer benefit from Visa credit card perks like cheap borrowing if they had a 0% interest period, cashback, rewards and extra protection for purchases over £100,” he added.
“This is a welcome relief for Amazon customers and a sensible move for the retailer who should always put their customers before their profits,” Beard concluded.
Last month, Amazon confirmed to City A.M. this morning that it will stop accepting payments made using Visa credit cards issued in the UK.
“As a result of Visa’s continued high cost of payments, we regret that Amazon.co.uk will no longer accept UK-issued Visa credit cards as of 19 January, 2022,” an Amazon spokesman said in December.
“The cost of accepting card payments continues to be an obstacle for businesses striving to provide the best prices for customers.”
“These costs should be going down over time with technological advancements, but instead they continue to stay high or even rise,” the spokesman explained Amazon’s decision at the time.
“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,” the spokesman explained last month.
Visa has not yet responded to Amazon’s statement.