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Why is Amazon stopping Visa credit card transactions in UK – and how is Brexit involved?

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Amazon has taken the unusual step of announcing it will no longer accept payments from Visa credit cards issued in the UK from January 2022, pitting two huge companies against each other.

The e-commerce company said Visa’s fees are too high, something smaller retailers have complained about for years.

Visa swiftly rejected the complaint and said it was “very disappointed” by the decision.

What is the dispute between Amazon and Visa?

Visa recently increased the amount it charges to process payments. Anyone accepting card payments has to hand over “interchange fees” to Visa or other card networks like Mastercard. The fee is to cover the cost of processing payments.

Amazon said only that it would stop accepting UK Visa credit cards because of “high fees” without giving any further information.

Is Brexit a factor?

When the UK was in the EU its was bound by a 2015 EU regulation that capped interchange fees at 0.2 per cent of the cost of the transaction for debit cards and 0.3 per cent for credit cards.

According to Brussels’ calculations at the time, the change would save consumers and businesses €6bn a year.

The UK’s exit from the EU means that credit card networks are not required to stick to those limits.

Visa reportedly decided earlier this year to hike fees for cross-border transactions from 0.3 per cent to 1.5 per cent.

According to the British Retail Consortium, which lobbies on behalf of large retailers, fees on card sales for transactions between the UK and EU have jumped by £150m this year.

Andrew Cregan, payments policy adviser at the British Retail Consortium, said: “British merchants alone will pay an extra £100,000 every single day just to process cross-border transactions, holding back British exports to Europe.”

However, both Amazon and Visa have said that this is not the Brexit issue. Amazon recently started charging surcharges on Visa transactions in Australia and Singapore, citing high fees.

Might Amazon ditch cards altogether?

Some payments and IT experts have suggested Amazon is seeking to persuade people to ditch credit and debit cards for newer payment methods.

The e-commerce giant could take payments from customers’ accounts directly, cutting out middlemen like Mastercard and Visa. While Amazon’s sales are vast, its margins are tight. Cutting out card fees would provide a big boost to profits or allow Amazon to further undercut rivals.

While such a shift in consumer habits would take time it is not unthinkable. The company has not addressed this directly but did say: “With the rapidly changing payments landscape around the world, we will continue innovating on behalf of customers to add and promote faster, cheaper, and more inclusive payment options to our stores across the globe.”

Will Visa and Amazon reach a compromise?

It is possible that Amazon is using its power in the hope of pressuring it into reducing its fees but will ultimately back down.

Amazon has given a deadline of 19 January meaning there is still some time – including the busiest shopping months of the year – for negotiations to be held.

David Ritter, financial services strategist at CI&T, expects the two sides to reach a compromise.

“Amazon is a retail giant so it has some leverage, but there’s no way they won’t accept Visa cards,” he said.

“Cards issued by Visa and Mastercard are ubiquitous and many of these cards also sit behind digital wallets like Apple Pay and PayPal.

“Plus, Amazon has automatic subscriptions tied to Visa cards – most importantly its Prime subscriptions – that consumers would have to change. At the end of the day, the consumer wants to use their preferred payment method and they won’t want Amazon to tell them it can’t be Visa.”

Will other sellers do the same?

Most experts think that other retailers are unlikely to follow Amazon’s lead because they are reliant on payments using Visa cards. They have nothing like the clout that Amazon has and any attempt to apply pressure to Visa in the same way would almost certainly be futile.



Amazon has taken the unusual step of announcing it will no longer accept payments from Visa credit cards issued in the UK from January 2022, pitting two huge companies against each other.

The e-commerce company said Visa’s fees are too high, something smaller retailers have complained about for years.

Visa swiftly rejected the complaint and said it was “very disappointed” by the decision.

What is the dispute between Amazon and Visa?

Visa recently increased the amount it charges to process payments. Anyone accepting card payments has to hand over “interchange fees” to Visa or other card networks like Mastercard. The fee is to cover the cost of processing payments.

Amazon said only that it would stop accepting UK Visa credit cards because of “high fees” without giving any further information.

Is Brexit a factor?

When the UK was in the EU its was bound by a 2015 EU regulation that capped interchange fees at 0.2 per cent of the cost of the transaction for debit cards and 0.3 per cent for credit cards.

According to Brussels’ calculations at the time, the change would save consumers and businesses €6bn a year.

The UK’s exit from the EU means that credit card networks are not required to stick to those limits.

Visa reportedly decided earlier this year to hike fees for cross-border transactions from 0.3 per cent to 1.5 per cent.

According to the British Retail Consortium, which lobbies on behalf of large retailers, fees on card sales for transactions between the UK and EU have jumped by £150m this year.

Andrew Cregan, payments policy adviser at the British Retail Consortium, said: “British merchants alone will pay an extra £100,000 every single day just to process cross-border transactions, holding back British exports to Europe.”

However, both Amazon and Visa have said that this is not the Brexit issue. Amazon recently started charging surcharges on Visa transactions in Australia and Singapore, citing high fees.

Might Amazon ditch cards altogether?

Some payments and IT experts have suggested Amazon is seeking to persuade people to ditch credit and debit cards for newer payment methods.

The e-commerce giant could take payments from customers’ accounts directly, cutting out middlemen like Mastercard and Visa. While Amazon’s sales are vast, its margins are tight. Cutting out card fees would provide a big boost to profits or allow Amazon to further undercut rivals.

While such a shift in consumer habits would take time it is not unthinkable. The company has not addressed this directly but did say: “With the rapidly changing payments landscape around the world, we will continue innovating on behalf of customers to add and promote faster, cheaper, and more inclusive payment options to our stores across the globe.”

Will Visa and Amazon reach a compromise?

It is possible that Amazon is using its power in the hope of pressuring it into reducing its fees but will ultimately back down.

Amazon has given a deadline of 19 January meaning there is still some time – including the busiest shopping months of the year – for negotiations to be held.

David Ritter, financial services strategist at CI&T, expects the two sides to reach a compromise.

“Amazon is a retail giant so it has some leverage, but there’s no way they won’t accept Visa cards,” he said.

“Cards issued by Visa and Mastercard are ubiquitous and many of these cards also sit behind digital wallets like Apple Pay and PayPal.

“Plus, Amazon has automatic subscriptions tied to Visa cards – most importantly its Prime subscriptions – that consumers would have to change. At the end of the day, the consumer wants to use their preferred payment method and they won’t want Amazon to tell them it can’t be Visa.”

Will other sellers do the same?

Most experts think that other retailers are unlikely to follow Amazon’s lead because they are reliant on payments using Visa cards. They have nothing like the clout that Amazon has and any attempt to apply pressure to Visa in the same way would almost certainly be futile.

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