The news: Amazon will stop accepting Visa credit card payments in the UK starting January 19 because of rising merchant card fees, per The Wall Street Journal. Amazon is offering affected UK customers £20 (approximately $26) off a purchase to encourage them to update their payment method.
Key context: An Amazon spokesperson told the Journal that high fees translate to higher prices at checkout: More often than not, merchants end up passing those fees on to customers. The spokesperson said technological advancements should be bringing these fees down—instead, they’re rising.
Why it matters: The UK is a major card market for Visa, and being cut off by one of the largest retailers in the world could put a dent in the network’s payments volume. Last year, 2.8 billion payments were made using a credit card in the UK (approximately 8% of overall payments volume), per UK Finance—potentially making the country a sizable chunk of Visa’s global business.
Related content: Check out “The Power of Amazon” report for a deep dive into the etailer’s lucrative business units and how it achieved leadership standing in the ecommerce space.
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