UK Markets closed
  • FTSE 100

    7,765.15
    +4.04 (+0.05%)
     
  • FTSE 250

    20,035.39
    +119.88 (+0.60%)
     
  • AIM

    869.24
    +3.83 (+0.44%)
     
  • GBP/EUR

    1.1404
    +0.0015 (+0.13%)
     
  • GBP/USD

    1.2395
    -0.0012 (-0.0967%)
     
  • BTC-GBP

    18,582.92
    -232.71 (-1.24%)
     
  • CMC Crypto 200

    526.66
    +9.65 (+1.87%)
     
  • S&P 500

    4,070.56
    +10.13 (+0.25%)
     
  • DOW

    33,978.08
    +28.67 (+0.08%)
     
  • CRUDE OIL

    79.38
    -1.63 (-2.01%)
     
  • GOLD FUTURES

    1,927.60
    -2.40 (-0.12%)
     
  • NIKKEI 225

    27,382.56
    +19.81 (+0.07%)
     
  • HANG SENG

    22,688.90
    +122.12 (+0.54%)
     
  • DAX

    15,150.03
    +17.18 (+0.11%)
     
  • CAC 40

    7,097.21
    +1.22 (+0.02%)
     

Amazon and Visa agree on global deal on credit card payments

A visa credit card is held in front of an Amazon logo in this picture illustration taken September 6, 2017. REUTERS/Philippe Wojazer/Illustration
Amazon has ended a months-long stand-off with Visa over online fees. Photo: Philippe Wojazer/Reuters

Amazon has reached an agreement with Visa over the fees it pays to accept the payment giant’s cards on its website.

In November, Amazon (AMZN) told customers that from 19 January it would stop accepting payments made with UK-issued Visa (V) credit cards.

At the time, Amazon blamed its decision on “the high fees Visa charges for processing credit card transactions” but stopped short from applying the ban, saying it had entered negotiations with the payment giant.

Read more: Will buy now, pay later impact your credit history?

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

Analysts said such fees, payable by Amazon itself or merchants on its platform, would squeeze margins – or raise prices if passed on to customers.

Following Brexit, Visa and rival payment processor Mastercard have hiked interchange fees, the cut they take on digital transactions between the UK and European Union. Card networks were allowed to raise their charges after an EU cap on interchange fees ceased to apply in Britain.

In Australia and Singapore, Amazon decided to apply a 0.5% surcharge on Visa credit card purchases. Those have now also been lifted.

“We’ve recently reached a global agreement with Visa that allows all customers to continue using their Visa credit cards in our stores,” the company said in a statement on Wednesday evening.

Read more: Contactless card use soars as pandemic sees cash decline

Almost 90% of Britons shop at Amazon, and its analysts have estimated Amazon Prime membership in the UK to be about 21 million.

“Visa is pleased to have reached a broad, global agreement with Amazon,” a Visa spokesman said in a statement.

“This agreement includes the acceptance of Visa at all Amazon stores and sites today, as well as a joint commitment to collaboration on new product and technology initiatives to ensure innovative payment experiences for our customers in the future.”

Watch: What is a credit rating and why does it matter?