Amazon just announced that it will soon stop accepting Visa credit cards in the United Kingdom — raising concern that it may enact similar restrictions in the United States. Online shopping is everywhere in 2021. You can go online right now and buy clothes, books, video games, computers, and virtually anything else imaginable. For millions of people, Amazon is the go-to place for all of these things and more.
There are a lot of reasons for Amazon's success over the years. Having started back in 1994, it was one of the first online retailers on the market. It's also dramatically expanded its product catalog over the years. Initially limited to books, the Amazon of today has everything from cookware to prescription drugs. And, of course, there's Amazon Prime. Being able to pay $119 for a full year of one or two-day shipping (along with dozens of other perks) is a value that's hard to ignore. Considering Amazon's estimated to earn around $638 million per day, it's safe to say the Amazon formula has worked.
Unfortunately for UK shoppers, Amazon's about to make the website unusable for a lot of people. On November 17, Amazon announced it'll stop accepting Visa credit cards as a payment method beginning January 19, 2022. Visa debit cards will still be accepted after that date, but any credit card with the Visa logo will no longer work. According to Amazon, "The cost of accepting card payments continues to be an obstacle for businesses striving to provide the best prices for customers." With Visa, specifically, Amazon claims the card issuer has implemented "egregious" fee increases that forced it to this point.
Of course, that's just Amazon's side of the story. In its own statement, Visa says it's, "very disappointed that Amazon is threatening to restrict consumer choice in the future." It doubles down on that point by noting, "When consumer choice is limited, nobody wins." Visa's also gone on to say it's working with Amazon to try and prevent this ban from happening, but it's unclear if it'll actually be successful in doing so.
Assuming Amazon follows through with this, that raises an important question: Will Amazon also ban Visa credit cards for its U.S. shoppers? That's honestly difficult to say right now. On the one hand, Amazon says this ban has nothing to do with Brexit and is purely an issue of Visa's increasing fees. In that context, there's no reason why a U.S. ban couldn't follow suit. That said, some people believe this is just a scare tactic from Amazon to put leverage on Visa. If the largest online retailer is threatening to ban Visa credit cards in a country with millions of customers, that's may very well push Visa to bend to Amazon's demands of lower fees.
Right now, it's a matter of waiting and seeing what happens. If Amazon and Visa come to terms by January 19, the ban may disappear and be forgotten. If such a deal isn't reached, however, Amazon may implement a similar block in the U.S. to put even greater pressure on Visa. This has the potential to be a really dirty fight, so don't be surprised if things get uglier before they get better.
Source: BBC
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November 18, 2021 at 12:02AM
