Amazon and Visa strike deal following interchange dispute
The resolution between the US card issuer and the US e-commerce giant, which will spell good news for the fintech industry, follows month of negotiations.
Amazon is to continue to accept Visa credit cards after the two firms struck a deal following a dispute over interchange fees.
The resolution between the US card issuer and the US e-commerce giant occurs three months after a potential disruption for customers was first mooted.
In November last year, Amazon said it was to stop accepting Visa credit cards in the UK in 2022 because of the high transaction fees charged by the payment processor.
It said the fees were “an obstacle” to providing the best price for consumers while Visa said the move meant that Amazon was reducing consumer choice.
But the two firms have now reached an agreement following months of negotiations that had already led to Amazon delaying its proposed ban.
“We’ve recently reached a global agreement with Visa that allows all customers to continue using their Visa credit cards in our stores," Amazon said.
“Amazon remains committed to offering customers a payment experience that is convenient and offers choice."
Visa said it was "pleased" to have reached an agreement.
"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,” Visa said.
The deal also drops a 0.5 per cent surcharge that Amazon customers in Australia and Singapore paid when using a Visa credit card to pay for items.
The agreement spells good news for the ecosystem of fintechs that rely on Visa to issue their credit cards.
The dispute follows the Brexit vote which led to the withdrawal of an EU cap on card issuer charges.
This led to Visa increasing its fees on payments between the UK and EU to 1.5 per cent of the transaction value for credit card payments made online or over the phone.