As the January 19th deadline loomed, inching closer — potentially changing the landscape for card payments in the U.K. —Amazon announced in a statement on Monday Jan. 17 that the change “will no longer take place.”
Amazon U.K. will not bar Visa cards from its site after all, CNBC reported.
“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,” an Amazon spokesperson told CNBC by email.
What changed, and why did Amazon seem so prepared to pull the trigger? Let’s review the context.
If the ban had gone into effect, online commerce would not have come to a screeching halt at the end of the week in the region. Consumers, after all, would have still been able to use Visa debit cards, or other credit cards in order to hit that “buy” button.
But we note that there’s a bit of hassle and friction in doing so — just enough, perhaps, to turn at least some consumers off from completing their transactions. Down the line Prime subscriptions may have been interrupted.
As has been reported, Amazon has been offering consumers a discount of 20 pounds to make the switch from the Visa cards, indicating that it’s willing to have some financial skin in the game, so to speak, and is willing to subsidize the switch.
Broadly speaking, Amazon had wanted consumers to switch away from using Visa credit cards in the U.K. due to what it has said are the high costs tied to the transactions.
We’re talking here, of course, about interchange fees, the fees that banks charge merchants to accept their credit cards, and where Visa gets paid a certain percentage of each transaction.
We noted in this space before that the interchange rate has indeed jumped.