Amazon fuelling theFight on Card Fees
Retail Tech Insights | Friday, January 03, 2020
After Britain walked out of European Union, the cross-border costs increased that led to the tumbling of Visa credit cards for the purchase on Amazon.
FREMONT, CA: Amazon.com Inc. will discontinue accepting payments made using Visa Inc. credit cards issued in the U.K. beginning next year, thiswas the latest escalation by the online retailer in its campaign against transaction fees paid by payment networks.
Visa Inc. credit cards issued in the U.K. will no more be accepted by Amazon, starting next year. Respective users have been already informed about the same. Inflated costs are the core reason for this escalation. According to Amazon officials, they cannot continue bearing the price of accepting Visa issued in the U.K. while offering the best of the services. Consumers can still use Visa debit cards and MasterCard Inc. and American Express Co. issued outside the U.K. Amazon have started to charge a fee for using Visa credit cards in Singapore and Australia.
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Banks, businesses, and leading payment firms have seldom discussed the costs that are associated with the card payments. Retailers have long grumbled about the costs they pay to accept electronic payments, which have risen to over $100 billion annually in the US as prices rise and customers migrate to premium cards with higher interchange rates. After Brexit, both Visa and Mastercard have been criticized for hiking some fees. The cost of credit and debit cards has risen by 150 million pounds each year, putting the UK and European merchants at a loss.
Britain's walking out of the EU paved the way for increased cross-border payment costs, for the card issuers. Two major corporations together accounted for 98 percent of the total percentage of card payments in the U.K.
Creating a wallet for consumers to make the purchase from, facilitating bank account integration with the wallet, are one of the ways Amazon has come up to reduce credit cards costs. Due to the pandemic, Visa and Mastercard have postponed plans to raise the fees that US retailers pay when customers use credit cards online.
See Also : Amazon Web Services Companies
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