Great news for merchants and customers alike, it was recently announced that Amazon and Visa finally agreed to end their global dispute over credit card fees. This new deal means Amazon customers in the U.K. can continue using their Visa credit cards when shopping with the ecommerce giant.g
The initial dispute was over Visa’s credit card fees. Reports began to circulate late last year that a transaction fee face-off had begun and Amazon would no longer accept Visa credit cards issued in the U.S. Amazon explained in their announcement that high credit card transaction fees had triggered this decision, but also said that Visa debit cards would still be accepted.
As a result of this announcement, Visa’s share price slumped nearly 7%. Amazon went on to offer gift cards to those affected and apologized for the inconvenience. They also continued to pile pressure on the credit card giant to lower its fees. Then just days before the change was expected to take place, Amazon dropped its plans to stop accepting Visa credit cards in the U.K.
“We’ve recently reached a global agreement with Visa that allows all customers to continue using their Visa credit cards in our stores,” an Amazon spokesperson told CNBC via email. “Amazon remains committed to offering customers a payment experience that is convenient and offers choice.”
Businesses Grateful for a Change
“Swipe fees” have long been a point of contention for businesses. So this new change is a welcome one for businesses. Roger De’Ath, U.K. country manager at fintech firm TrueLayer, commented that the stand off between the two giants highlighted the “fundamental need for new payment solutions”.
“For too long, cards have been retrofitted into online checkouts, creating an invisible web of hidden costs and unwieldy payment structures that affect the cost base of every single retailer,” De’Ath said via email.
Payment Processing Trends
The pandemic-drive shift to digital isn’t dissipating, and it won’t, according to experts. Cash and check’s share of transaction value continue to tick down. Meanwhile, debit usage continues to increase. The recent agreement between Amazon and Visa is a wise one that keeps the current needs and ever-changing preferences of customers in mind.
Blair Thomas has been a music producer, bouncer, screenwriter and for over a decade has been the proud Co-Founder of eMerchantBroker, the highest rated high risk merchant account processor in the country. He has climbed in the Himalayas, survived a hurricane, and lived on a gold mine in the Yukon. He currently calls Thailand his home with a lifetime collection of his favorite books.