Amazon reverses threat to stop accepting UK-issued Visa cards – Techdoxx

Deepak Gupta January 17, 2022
Updated 2022/01/17 at 7:18 PM

Amazon appears to have backed off from a public threat to end support for Visa payments in the UK in a dispute over payment fees.

The e-commerce giant sent an email to Amazon.co.uk users today informing them that the “expected change” – which was supposed to take place on January 19 – will not take place on that day.

Although it remains unclear whether the two companies have reached a sustained agreement on fees.

“The expected change towards the use of Visa credit cards on Amazon.co.uk will no longer take place on 19 January. We are working closely with Visa on a potential solution that will allow customers to continue using their Visa credit cards on Amazon. co.uk,” Amazon writes in the email sent to UK users.

“If we make any changes related to Visa credit cards, we will let you know in advance,” it continues, adding: “Until then, you can continue to use Visa credit cards, debit cards, Mastercard, American Express and Eurocard as you do today.” .

Contacted for comment, Amazon and Visa confirmed the development — but did not offer further details.

Amazon declined to provide any comment beyond its brief statement to users that nothing is changing for now.

While a Visa spokesperson also did not detail what “potential solutions” might mean in practice – implying that fee negotiations are ongoing in a statement in which he writes: “Amazon customers can continue to use Visa cards at Amazon.co.uk after 19 January as we work together to reach an agreement.”

In a previous email to UK users late last year, Amazon blamed high payment fees Visa charges for credit card transactions for ending support for Visa payments – warning Britons to make arrangements. alternatives to pay for your purchases on Amazon.co.uk.

His very public mass email seemed like an attempt to leverage his market power to extract better terms from Visa.

It’s unclear whether this worked to convince Visa to lower its credit card fees, or whether Amazon decided to steer clear of the brink of causing major inconvenience to UK shoppers.

In the latter case, Amazon had already caused UK users who rely on Visa-based payment methods months of uncertainty about whether they would be able to continue shopping on its site in the near future.

In November, Visa described as disappointing that Amazon “is threatening to restrict consumer choice in the future”, as it said at the time, also arguing that “when consumer choice is limited, no one wins”.

At the time, Visa had said it was working on a resolution with Amazon to ensure that Visa cardholders could continue to use their UK-issued Visa credit cards on its website.

Months later, the conversations apparently continue – just with no imminent public deadline for Amazon to stop accepting UK-issued Visa cards.

Rising fees for Visa transactions on Amazon.co.uk have been linked to the UK’s departure from the European Union – as Brexit removed the cap on fees that can be charged on transactions between the UK and the European Economic Area/EU .

But the issue also likely involves the specifics of how Amazon structures its UK business – as it bills UK customers through an EU-based entity, transferring revenue booked through its UK website to its European headquarters in Luxembourg.

A report covered by AM city last August, it suggested that this corporate structure allowed Amazon to avoid paying considerably higher amounts in UK taxes. However, it appears that the same ‘profit transfer’ structure costs (or, well, cost…) Amazon considerably more in Visa ‘taxes’ than it would like to pay.

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