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Visa says Amazon decision to ban UK credit cards is unfortunate

Last week Amazon announced that it would stop accepting Visa credit cards issued in the UK from 19th January 2022.

The reason given by Amazon was that the high fees Visa charges to process credit card transactions. Purchases completed with a Visa debit card issued in the UK will still be possible on Amazon.

“The cost of accepting card payments continues to be an obstacle for businesses striving to provide the best prices for customers,” Amazon said. The retailer added that costs should be dropping thanks to advanced technology but they are doing the opposite.

However, it appears as if Amazon has jumped the shark here with Visa chief executive officer, Al Kelly, calling Amazon’s decision odd and unfortunate.

“Clearly, we’re in a challenging negotiation,” 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.”

The CEO added that while Amazon claims that the decision comes because of high acceptance costs.

This tiff between two heavyweights is good news for fintech firms though. Ozow CEO Thomas Pays suggests that this move from Amazon is step toward driving open banking on its platform.

“We’re excited about what this means for the future of ecommerce on the continent. We expect to see that many businesses in the local market will follow the move by Amazon,” said Pays. “The most effective way of reducing people’s reliance on cash in informal markets is through the development of simple, affordable, and secure alternative payment options.”

We, like Pays, are excited to see how fintech firms like Ozow make a mark on big platforms such as Amazon. However, we’re also well aware that big firms often do things that upset customers in a bid to get another firm, such as Visa in this instance, to bow to pressure.

It remains to be seen whether Visa will stand firm on its fees or if Amazon will lift its ban. In this game of corporate chicken though, it’s the shoppers who may lose.

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