Amazon cancels its plan to stop accepting Visa credit cards from customers in the United Kingdom. This dramatic twist succeeds an announcement in November 2021, which prevented British customers from using the Visa credit card on its marketplace starting from January 19, 2022, due to Visa's high costs in processing card transactions. However, Amazon on Monday stated that "the expected change regarding the use of Visa credit cards on Amazon.co.uk will no longer take place on January 19." The company has opted to work with Visa on finding potential solutions that would allow customers to continue using the Visa credit card.
Against the backdrop of Brexit, Amazon has denied any political relation in its drive for a restriction on Visa. Amazon dispute with Visa transcends the hike in fees into the quest for control as it has achieved with Visa's counterpart Mastercard. According to Amazon's company report, customers have spent nearly $110 billion in cards processing fees in the past year. This report is no surprise considering its dominance in the e-commerce industry. However, this new decision by retailing giants affords Visa a chance at negotiation.
Analysts led by Sanjay Sakhrani believe that both parties are likely to reach a resolution with "minimal financial impact" to Visa. However, this opinion is flawed considering the fears amidst users would prompt a large migration of customers from Visa into Mastercard in a bid to stay in business even after the set deadline. Fingers crossed with the latest decision. Visa still stands a chance at maintaining its role as a significant player in Amazon. A considerable challenge will remain to regain its already lost users back to its network.
United Kingdom in focus
Population: 67.22 million in 2020 as compared to 66.84 million in 2019
GDP: $2.708 trillion compared to $2.857 trillion in 2019
GDP per capita: $40,284 in 2020 compared to $42,354 in 2019