No, Amazon has not banned your Visa card
VSCorporate goliaths Visa and Amazon are going head-to-head in public, but U.S. shoppers don’t have to worry about their Visa cards being rejected when ordering gifts this holiday season from the mega-retailer.
The hubbub exceeds the fees Amazon pays Visa for processing payment transactions in the UK. Amazon says these fees are too high and will stop accepting Visa credit cards on January 19, 2022.
But Americans who are just skimming the headlines might miss the point that this issue involves Amazon in the UK, not the US. For now anyway. There has been no initiative by Amazon – at least publicly – to ban Visa cards as a method of payment for U.S. buyers.
Asked how the dispute would affect U.S. customers, a spokesperson for Amazon in the UK said via email: “We have nothing more to add, but to be clear, this action doesn’t applies only to Visa credit cards issued in the UK and used on Amazon. .co.uk. “
But U.S. cardholders may face fallout later
Yet Amazon is said to be at odds with Visa on other fronts as it considers moving its popular co-branded credit card from Visa to Mastercard, according to reports from Bloomberg, Associated Press and Reuters. And this decision would have ramifications in the United States
Anytime a credit card changes payment network or issuer, it can cause headaches for cardholders caught in the middle. For example:
- Card benefits may change.
- Old transaction histories and records may be lost.
- Credit scores can drop for brief periods.
- Account numbers may change, which means auto-paying invoices may be affected.
Amazon currently has several co-branded credit cards through various partners:
- Its popular card for Amazon Prime customers is issued by Chase and works on Visa.
- Amazon Co-Branded Cards for Business are issued by American Express.
- Amazon “Closed Loop” Store Cards, which can only be used on Amazon, are issued by Synchrony Bank.
Nerdy tip: Visa processes card payments, but does not issue credit cards. A card with the “Visa” mark works on this payment network, but it is issued by a bank, not by Visa.
What Amazon claims
Visa and other payment networks like Mastercard act as intermediaries between banks and merchants and charge a fee for this service. These charges are the crux of the matter.
“The cost of accepting card payments continues to be a barrier for businesses striving to offer customers the best prices,” Amazon’s spokesperson for the UK dispute said. continue to stay high or even increase. “
He added that the plan to stop accepting Visa in the UK only concerns credit cards, not debit cards as well.
“With the rapidly changing global payments landscape, we will continue to innovate on behalf of customers to add and promote faster, cheaper and more inclusive payment options in our stores around the world,” a- he declared.
A Visa spokesperson said via email that UK buyers will still be able to use Visa cards during the holiday season.
“We are very disappointed that Amazon is threatening to restrict consumer choice in the future. When consumer choice is limited, no one wins,” she said. “We have a long-standing relationship with Amazon and continue to work on a resolution, so that our cardholders can use their preferred Visa credit cards on Amazon UK without restrictions imposed by Amazon from January 2022.”
Disputes are not uncommon
High-profile conflicts between large retailers and card networks can have a big impact on consumers.
For example, the Costco Warehouse Club decided several years ago that Visa cards were the only credit cards it would accept in its stores, abandoning American Express in the long run.
And in 2018, Foods Co., a division of Los Angeles-based The Kroger Co., stopped accepting Visa credit cards at several stores, amid a dispute over Visa’s fees. The ban on Visa cards was finally lifted in October 2019.
It’s unclear whether the current showdown is being done by Amazon for leverage or whether a rift will grow between the giant retailer and Visa.
But for American shoppers, paying with a Visa credit card on Amazon shouldn’t be a problem for now.
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Gregory Karp writes for NerdWallet. Email: [email protected] Twitter: @spendingsmart.
The article No, Amazon Has Not Banned Your Visa Card originally appeared on NerdWallet.
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