• Tue. Nov 5th, 2024
    credit

    Amazon is considering dropping Visa as partner on its US co-branded credit card after earlier confirming it would stop accepting Visa credit cards in the United Kingdom as a dispute over payments intensified.

    The e-commerce giant is in talks with several payment networks including Mastercard, American Express and Visa as part of what it called its standard process for reviewing its co-branded credit card agreement, a spokesperson said.

    Earlier, shares of Visa closed 4.7% lower after Amazon said it would stop taking payments from Visa credit cards in the UK from Jan. 19, 2022. In a statement, it said such charges should be “going down over time with technological advancements, but instead they continue to stay high or even rise.”

    Visa declined to comment on the co-branded card. Mastercard and American Express did not respond to requests for comment.

    Visa last month began charging 1.5% of the transaction value for credit card payments made online or over the phone between the UK and EU, and 1.15% for debit card transactions, up from 0.3% and 0.2%, respectively.

    The average credit card processing fees across the industry

    The average credit card processing fees across the industry range between 1.5% and 3.5% of each transaction, according to analysts.

    The move marks an “important turning point in the payments industry,” said Laura Hoy, equity analyst at Hargreaves Lansdown, adding Amazon may hope to drive more customers to its own payments system.

    “Ultimately, we think Amazon has the edge in this game of chicken – whether customers adopt its own payment system or Visa gives in and lowers its fees, either is a win for the retail giant,” Hoy said.

    Amazon customers can still use Visa debit cards, Mastercard and Amex credit cards, and Eurocard, in the UK.

    “We continue to work toward a resolution, so our cardholders can use their preferred Visa credit cards at Amazon UK without Amazon-imposed restrictions come January 2022,” Visa added.

    Shares of rival Mastercard dropped 2.8% on Wednesday. Amazon shares rose 0.2%. American Express shares closed 0.7% lower.

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