Amazon moved against Visa again this past Wednesday, announcing that Visa branded credit cards would no longer be an acceptable payment method for consumers in the United Kingdom starting January 19, 2022. This move follows Amazon’s announcement earlier in 2021 that consumers in both Singapore and Australia would incur a 0.5% surcharge for using Visa branded credit cards on their platform. Amazon justified its decision citing ‘high-fees’ and noting that technological innovation should be driving card acceptance costs downward; however, in practice this notion has not come to fruition. Free from restrictions put in place by European courts since the occurrence of Brexit, Visa raised its fees for telephone and online transactions between the U.K. and EU countries from 0.3% to 1.5% for credit cards last month, provoking Amazon’s ire.
While Amazon’s actions are sure to inconvenience consumers in the UK, it is unlikely to have an outsized impact on the ecommerce giant’s bottom line. In the U.K, Visa credit cards account for the smallest share of all card purchases – the Washington Post estimates that Visa branded credit cards account for less than 7% of all card-based purchases in the nation. Based upon 2020 numbers, this estimate would indicate Visa branded cards accounted for less than $1.8 billion in UK Amazon sales last year.
It is unlikely that Amazon’s latest move against Visa will be its last. Amazon has previously indicated that it is considering dropping its Visa co-branded credit cards in the U.S. as well, instead favoring the likes of Mastercard or American Express. However, if the past is any indication of the future, this may all fizzle-out before anymore blood is spilled. Payment veterans are likely to recall that Walmart and Visa had a similar conflict back in 2016, which was resolved before any real damage could be done.
