Amazon.com Inc has agreed to allow Visa Inc's credit cards throughout its platform, bringing an end to a stalemate between the two companies that threatened to disrupt e-commerce payments and give a blow to the U.S.-based payments processor.
The terms of the agreement were not released, but Visa and other payment cards have been under heightened scrutiny for their fees as more people have turned to the internet to shop during the pandemic. The squabble had underscored merchants' growing clout in the fee war.
After previously declaring that it will cease taking Visa credit cards in the UK due to excessive transaction fees, Amazon stated in November that it was considering eliminating Visa as a partner on its U.S. co-branded credit card.
Amazon consumers will be able to use Visa credit cards in its stores as a result of the deal, the e-commerce giant said in a statement.
Neither party stated what fees will be levied in the future, an issue that has risen to the fore in the United Kingdom after an EU-mandated cap on card fees was lifted following Brexit.
Some experts viewed the conflict between Amazon and Visa in the UK as a negative omen for the card industry, arguing that it could foreshadow a struggle in the much larger US market.
After the country's payments authority found no evidence to justify the increases, British legislators announced last month that they would investigate increases in the fees Visa and Mastercard charge businesses.
Visa began charging 1.5 per cent of the transaction value for credit card purchases made online or over the phone between the UK and EU in October, up from 0.3 percent and 0.2 per cent, respectively.
According to analysts, average credit card processing fees in the sector range from 1.5 per cent to 3.5 per cent.
In the past, retailers considered credit card processing fees as an unavoidable cost, but this may be changing as a result of technological advancements and more consumer choice in the payments sector.
According to payments giant WorldPay, credit cards will account for a third of North American e-commerce spending in 2020, but mobile payment solutions like Venmo and "buy now, pay later" (BNPL) financing schemes are gaining traction.
Even though alternative payment methods have been on the rise for some time, the pandemic has exacerbated a decreasing trend in credit card applications, boosting the popularity of BNPL financing.
According to WorldPay, credit cards' proportion of North American e-commerce spending fell 7 per cent last year, while BNPL's share climbed 78 per cent.
Other large retailers have settled fee issues with Visa in the past after announcing that they would no longer accept Visa credit cards in certain areas of their companies.
Walmart Inc.'s Canadian unit, for example, announced in 2016 that it would discontinue taking Visa credit cards due to a lack of agreement on fees. After seven months, the corporations announced that they had reached an agreement.
Visa expressed its delight at the achievement of a wide, global agreement with Amazon.
"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," a Visa spokesperson said in an email.
(Source:www.ft.com)
The terms of the agreement were not released, but Visa and other payment cards have been under heightened scrutiny for their fees as more people have turned to the internet to shop during the pandemic. The squabble had underscored merchants' growing clout in the fee war.
After previously declaring that it will cease taking Visa credit cards in the UK due to excessive transaction fees, Amazon stated in November that it was considering eliminating Visa as a partner on its U.S. co-branded credit card.
Amazon consumers will be able to use Visa credit cards in its stores as a result of the deal, the e-commerce giant said in a statement.
Neither party stated what fees will be levied in the future, an issue that has risen to the fore in the United Kingdom after an EU-mandated cap on card fees was lifted following Brexit.
Some experts viewed the conflict between Amazon and Visa in the UK as a negative omen for the card industry, arguing that it could foreshadow a struggle in the much larger US market.
After the country's payments authority found no evidence to justify the increases, British legislators announced last month that they would investigate increases in the fees Visa and Mastercard charge businesses.
Visa began charging 1.5 per cent of the transaction value for credit card purchases made online or over the phone between the UK and EU in October, up from 0.3 percent and 0.2 per cent, respectively.
According to analysts, average credit card processing fees in the sector range from 1.5 per cent to 3.5 per cent.
In the past, retailers considered credit card processing fees as an unavoidable cost, but this may be changing as a result of technological advancements and more consumer choice in the payments sector.
According to payments giant WorldPay, credit cards will account for a third of North American e-commerce spending in 2020, but mobile payment solutions like Venmo and "buy now, pay later" (BNPL) financing schemes are gaining traction.
Even though alternative payment methods have been on the rise for some time, the pandemic has exacerbated a decreasing trend in credit card applications, boosting the popularity of BNPL financing.
According to WorldPay, credit cards' proportion of North American e-commerce spending fell 7 per cent last year, while BNPL's share climbed 78 per cent.
Other large retailers have settled fee issues with Visa in the past after announcing that they would no longer accept Visa credit cards in certain areas of their companies.
Walmart Inc.'s Canadian unit, for example, announced in 2016 that it would discontinue taking Visa credit cards due to a lack of agreement on fees. After seven months, the corporations announced that they had reached an agreement.
Visa expressed its delight at the achievement of a wide, global agreement with Amazon.
"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," a Visa spokesperson said in an email.
(Source:www.ft.com)
