Yahoo Finance Amazon and Visa agree on global deal on credit card payments
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.
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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.
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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.”
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