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UPDATE 17 February 2022: Amazon And Visa Reach Credit Card Agreement
Amazon and Visa have reached an agreement that will allow Visa credit card holders to shop on Amazon.
The online retailer announced a plan to stop accepting Visa credit cards in January because of “continued high cost of payments”. The card ban was postponed at the last minute on 17 January when Amazon told customers it was working with the card issuer on a solution (see story below).
Today, Amazon issued a statement that said: “We’ve recently reached a global agreement with Visa that allows all customers to continue using their Visa credit cards in our stores.”
UPDATE 17 January 2022: Amazon Drops Visa Credit Card Ban
Online retailer Amazon has, at the last minute, cancelled plans to stop accepting Visa-issued credit cards.
Amazon previously announced that it would stop accepting Visa credit cards this Wednesday, 17 January (see story below), criticising what it said were the card issuer’s high payment costs. However, with a couple of days to spare, Amazon has changed its plans.
In an email to customers, Amazon said it was… “working closely with Visa on a potential solutionthat will enable customers to continue using their Visa credit cards onAmazon.co.uk.”
NOVEMBER 2021: After losing some of its biggest customers this year to its rival Mastercard, card payment processing giant Visa has been dealt another blow by Amazon, which will stop accepting its credit cards from January 2022.
The online retail giant says Visa’s “continued high cost of payments” had forced the decision to no longer accept UK-issued Visa credit cards from 19 January.
Barclaycard and HSBC are among the credit card providers that issue Visa-powered cards, meaning their customers will be unable to shop on Amazon without using an alternative payment method.
Visa said it was “very disappointed” with the move and that its debit cards will still work on Amazon after the credit card ban takes effect.
There is speculation that Visa may negotiate a deal with Amazon before the change comes into effect.
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Out of favour
In February, NatWest dropped Visa as its card issuer, switching around 16 million consumer and business customers to Mastercard.
The change also affected customers of its other brands: Royal Bank of Scotland, Ulster Bank and Coutts. As a result, Mastercard now accounts for one in three UK debit cards and one in four Irish debit cards.
NatWest’s switch to Mastercard followed similar moves from Santander in 2019 and First Direct (for debit cards) in 2020.
Payments market upheaval
Companies such as Visa and Mastercard provide the technology to facilitate payments between merchants and financial institutions. They make money by charging card issuers and merchants a fee on every transaction.
While these fees have no immediate and direct bearing on the prices we pay as consumers, they do add to a retailer’s base costs, which may ultimately be reflected in higher prices.
They also determine which payment provider a merchant or financial institution chooses, which can make a difference to where we can use our debit and credit cards.
While Visa and Mastercard payments are accepted virtually everywhere, Amazon’s decision to stop accepting Visa credit cards is one of the highest profile exceptions.
It’s not something that you might think to look out for, but if you’re a regular Amazon shopper and you’re in the market for a credit card, you’d be well advised to check which payments network a card issuer uses before signing on the dotted line.
However, only two of our 10 best credit cards (offered by Barclaycard and First Direct) use the Visa payments network.
Luckily, there are no such exclusions for Visa or Mastercard debit cards, which are widely accepted both in stores and online.
If your debit or credit card issuer decides to also switch from Visa to Mastercard or vice versa, or to another payments network, your card will be replaced in due course and will work in the exact same way your old one did.
However, you may have to update your payment details for regular online payments and subscriptions, and for payment facilitators such as PayPal.
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Staff writer Mark Hooson has been a journalist within the personal finance, consumer affairs and fraud sectors for more than 10 years. He is also Forbes Advisor UK’s resident tech expert. Mark says he thrives on making ‘complicated and dry topics easier to digest’.
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