Visa’s chief executive called Amazon’s decision to ban UK-issued credit cards from its platform “odd” and “unfortunate,” but said he expects the spat to be resolved.
“Clearly, we’re in a challenging negotiation,” Al Kelly told the Financial Times. “What’s different here is that Amazon unfortunately decided to take the negotiation challenges that we’re having public and oddly has chosen to threaten to punish consumers.”
Amazon on Wednesday notified customers it would stop accepting UK-issued Visa credit cards starting next year and offered affected customers £20 off their next purchase using an alternative payment method. The retailer also said it was weighing dropping Visa as the partner for its co-branded card in the US.
“This should not be considered a shock, as Amazon has been using every negotiating tactic available to bring down the cost of processing payments,” Autonomous analyst Kenneth Suchoski wrote in a note that said Amazon’s move would have little impact on Visa’s bottom line.
Amazon told UK customers it was acting because of Visa’s high fees. However, Mastercard and Visa set nearly identical transactions fees in the UK, according to payments firm Bambora. “I find it quite odd that they’re claiming they did this because of the high cost of acceptance of these in the UK,” Kelly said. “It’s just absolutely inaccurate.”
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