The old battle between merchants and card brands over the cost of cards acceptance has flared again among two of the largest players on each side. Amazon has notified some of its customers that it will no longer accept Visa credit cards issued by U.K. banks after Jan. 19, 2022. The online retail giant is blaming high fees that surged in the U.K. post-Brexit.
Visa and other card networks in the U.K. had been operating according to EU rules that capped interchange on consumer cards issued by banks in EU countries at 0.3 percent of the transactions value. Since the U.K.’s departure from the EU, Amazon said its interchange rates there have increased significantly. 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."
Merchants globally have long railed against the costs involved in accepting credit cards and have sought relief in court or via legislation.
“The cost of accepting card payments continues to be an obstacle for businesses striving to provide the best prices for customers,” a spokesperson for Amazon said. And U.K. retailer association the British Retail Consortium agreed.
“Card payments accounted for over four-fifths of U.K. retail spending in 2020, with just two firms facilitating 98 percent of these payments,” said Andrew Cregan, payments policy adviser at the British Retail Consortium, which, according to Bloomberg News, has asked the U.K.’s Payment System Regulator to intervene. “Ultimately, it will be consumers who suffer higher prices unless these spiraling costs can be brought to heel.”