Prime letdown: Amazon to stop accepting UK Visa credit cards from 2022
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Shopping behemoth Amazon has announced it will no longer accept payments made with UK-issued Visa credit cards. The move will go into effect from 19 January, 2022. It’s bad news for those hoping to earn rewards from Visa purchases on the website, but there is a solution thanks to the Curve card.
The online retail company says that the changes are due to Visa’s high transaction fees for processing credit card purchases. Transaction fees have been capped at a low 0.3% by European Union regulations making card acceptance across the United Kingdom and Europe a convenient and affordable option for merchants and customers. Since the United Kingdom left the European Union, this cap has been retained after being introduced into U.K. law. However, the cap does not apply to purchases made by customers in the United Kingdom with a European-based retailer, which is where Amazon is registered. Card issuers such as Visa are able to charge higher transaction fees in these situations which has led to Amazon ending their acceptance of Visa payments for U.K. transactions from January.
Amazon issued a statement explaining its decision: “The cost of accepting card payments continues to be an obstacle for businesses striving to provide the best prices for customers. These costs should be going down over time, with technological advancements, but, instead, they continue to stay high or even rise.”
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The retailer said it would continue to accept Visa debit cards and other credit cards such as Mastercard, which supplies Amazon’s branded credit card, as well as American Express. And while discussions are ongoing between Visa and Amazon over the situation, consumers should move forward with the expectation that they won’t be able to use their UK Visa credit card at the world’s biggest shopping site.
Visa issued its own statement that blamed Amazon for making a business decision that will negatively impact consumers. “When consumer choice is limited, nobody wins,” the statement from the credit card company said. “We have a longstanding relationship with Amazon, and 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.”
If you do wish to continue purchases from Amazon with a Visa credit card next year consider using a Curve card instead – it’s a Mastercard (so accepted by Amazon) and you can link your visa credit card to it for hassle-free transactions.
A silver lining for UK Visa cardholders is that they can still use their cards to do their Christmas and Black Friday shopping through Amazon, as the changes don’t come into effect until 19 January.
The decision will be a blow to millions of UK shoppers who have Visa credit cards and like to earn rewards for their shopping, according to James Andrews from the comparison website money.co.uk.
Andrews said “Hopefully, Visa and Amazon work out their differences before the ban comes into force on 19 January but in the meantime, it would be wise to check your cards now.”
Credit cards are a major reason why online shopping is so prevalent. Not simply for convenience, but also because the cards offer protections for large online purchases that remove the stress from the process.
Under section 75 of the Consumer Credit Act, if a retailer goes out of business or fails to deliver goods as promised and the items cost more than £100, the credit card provider has an obligation to refund the costs.
The chairman of the Federation of Small Businesses said its members had seen its transaction fees skyrocket in recent years. “Small businesses are almost always charged more for card terminals than big corporates – so when online giants start throwing down the gauntlet, you know the situation is becoming critical,” said FSB chair Mike Cherry.
Featured image by Leon Neal for Getty Images
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