Amazon has told customers that it plans to stop accepting payments made with UK-issued Visa credit cards in January.
In an email to users of the site, it blamed the cost of processing the payments, telling them: “Starting 19 January 2022, we will unfortunately no longer accept Visa credit cards issued in the UK, due to the high fees Visa charges for processing credit card transactions.”
The retailer said it would continue to accept Visa debit cards and other credit cards, including Mastercard, which supplies the retailer’s branded credit card, and American Express but acknowledged that the change would be “inconvenient” for some customers.
Payments on cards attract a range of fees including interchange fees and other transaction charges, and it is understood that Amazon’s move has not been prompted by an increase in any of the charges in particular.
In a statement, a spokesperson for the retailer said: “The cost of accepting card payments continues to be an obstacle for businesses striving to provide the best prices for customers. These costs should be going down over time, with technological advancements, but, instead, they continue to stay high or even rise.
“As a result of Visa’s continued high cost of payments, we regret that Amazon.co.uk will no longer accept UK-issued Visa credit cards as of 19 January 2022.”
Interchange fees are typically a percentage of the cost of the transaction and are higher for credit card transactions, and for those where purchases are made remotely, including online sales, although there are caps on payments made within the UK.
In a statement, Visa said it was “very disappointed that Amazon is threatening to restrict consumer choice in the future”.
It said: “When consumer choice is limited, nobody wins. We have a longstanding relationship with Amazon, and we continue to work toward a resolution, so our cardholders can use their preferred Visa credit cards at Amazon UK without Amazon-imposed restrictions come January 2022.”
It added that UK shoppers could continue to use their cards at Amazon “throughout the holiday season”.
Many shoppers choose to use credit cards for large purchases online because of the extra protections that are offered if things go wrong.
Under section 75 of the Consumer Credit Act, if a retailer goes out of business or fails to deliver goods as promised and the items cost more than £100, the credit card provider has an obligation to refund the costs.
James Andrews, from the comparison website money.co.uk, said the decision would come as a blow to the millions of UK shoppers who had Visa credit cards, including customers of Barclaycard and HSBC.
“With American Express also rejected by many UK retailers, that means people looking for rewards on their spending or trying to split the cost of shopping with a 0% purchase card on Amazon will be effectively forced to choose a Mastercard,” he said.
“Hopefully, Visa and Amazon work out their differences before the ban comes into force on 19 January but in the meantime it would be wise to check your cards now.”
Card fees have long been an issue of contention between providers and retailers, and this month Visa and Mastercard increased their quoted fees for “card-not-present” payments on credit cards to merchants in the EU after the removal of caps post-Brexit.
The British Retail Consortium said companies faced an estimated £150m increase in the cost of accepting cross-border card payments, with British retailers shouldering an extra £36.5m in fees, equivalent to £100,000 every day.
The Federation of Small Businesses said its members had experienced soaring fees in recent years.
Its national chairman, Mike Cherry, said: “Small businesses are almost always charged more for card terminals than big corporates – so when online giants start throwing down the gauntlet, you know the situation is becoming critical.”
Visa’s shares were down 3.3% in pre-market trading in the US.
