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Amazon ditches plan to stop accepting Visa credit cards
Amazon previously announced that it would stop accepting Visa credit cards in the United Kingdom, and now this plan has changed. It was reported that the e-commerce giant is ditching its plans regarding its acceptance of the said credit card, at least for now.
Customers were already expecting Amazon to stop honoring their Visa-issued credit cards starting Jan. 19 since this was already revealed a few weeks ago. However, in a new statement that was issued earlier this week, the company said it would no longer proceed with its plans.
In a statement sent to CNBC via email, an Amazon spokesperson stated, “We are working closely with Visa on a potential solution that will enable customers to continue using their Visa credit cards on Amazon.co.uk. Amazon customers can continue to use Visa cards after Jan. 19 while we work to reach an agreement.”
It was in November when Amazon initially declared that due to high fees that Visa charges for credit card processing transactions, it decided to stop accepting the card for purchases. At that time, the credit card company said it was very disappointed with Amazon’s decision, as per Reuters.
Now, with the new announcement from Amazon, it is not clear what changed the company’s mind. It is also not clear if this new decision is temporary or final.
Observers in the industry said that the change of plans on the side of Amazon is actually not surprising because it will also be a disadvantage for the e-commerce firm since most people in the U.K. use Visa credit cards. Thus, if it will not be accepting this card, then it will also result in huge sale losses.
“Amazon is a retail giant so it has some leverage, but there is no way it won’t accept Visa cards,” David Ritter, a financial services strategist at IT firm CI&T, said in a statement regarding Amazon’s about-face. “It is more likely that Amazon has been applying pressure tactics. The move by Amazon is likely a way to negotiate a longer-term agreement on rates, or even to push for a freeze to its current rates.”