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Tuesday, December 7, 2021

Amazon customers blocked from using Visa credit cards

Millions of Amazon customers will be blocked from shopping on the website next year after the online retailer banned the use of Visa credit cards in the UK.

In a email sent to customers, Amazon said it would no longer accept the cards due to the “high fees” Visa charged for processing credit cards. The ban will come into force on Jan 19.

The retail giant offers its own credit card, which is operated by Mastercard.

Customers will still be able to use Visa debit cards and non-Visa credit cards, such as Mastercard or American Express. 

A spokesman for Amazon said: “The cost of accepting card payments is 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 will no longer accept UK-issued Visa credit cards.”

Roughly nine in 10 British shoppers use Amazon, according to Mintel, a research firm, with around 40pc using its Prime subscription service. Amazon declined to comment on how many customers would be affected.

Credit cards provided by Barclaycard, HSBC and Vanquis use Visa’s payment system.

The issue relates to Visa increasing its credit fees after Brexit. The EU enforces a cap on fees charged by card issuers, which is no longer in place in the UK.

Sarah Coles, of broker Hargreaves Lansdown, warned customers they would need to change the card linked to their account if the ban went ahead. “This is a massive hassle. If you don’t have an alternative credit card, and you can’t use your debit card, you’ll need to rethink your credit provider or find somewhere else to shop,” she added.

James Andrews of money.co.uk said this could force consumers to default towards Mastercard, given American Express was still not accepted everywhere. He added: “Hopefully, Visa and Amazon work out their differences. In the meantime it would be wise to check your cards now and think about switching to a Mastercard.

“The good news is that some of the best offers on the market at the moment come from Mastercard. Unsurprisingly, Amazon’s own rewards card is powered by Mastercard, as well as table-topping offers from Sainsbury’s, Tesco and M&S.”

Ms Coles said customers could use this to help manage their personal finances and swap to using debit cards. “Amazon’s checkout process is designed to make spending an absolute doddle, so it can take a matter of seconds between deciding to buy something and making the payment. When the money is going on a credit card, it’s easy to build up debts without really thinking about it,” she said.

A Visa spokesman said it was “very disappointed” that Amazon was threatening to “restrict consumer choice” by banning its cards. A spokesman said: “When consumer choice is limited, nobody wins. We have a long-standing relationship with Amazon, and we continue to work toward a resolution.”

Visa declined to comment on how many Britons have a Visa credit card.

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