Amazon to stop accepting Visa credit cards issued in UK in huge change for buyers

Retail giant Amazon will stop accepting payments made using Visa credit cards issued in the UK from next year.

Customers this week received a notification from Amazon stating that “starting 19 January 2022, we will no longer accept Visa credit cards issued in the UK.”.

The online behemoth said the change is due to the high fees charged by Visa to process transactions.

Amazon customers can still use Visa debit cards, as well as MasterCard and Amex credit cards, as well as Visa credit cards issued outside of the UK, according to the information it shared with customers.

“We are very disappointed that Amazon is threatening to restrict consumer choice in the future. When consumer choice is limited, nobody wins,” a Visa spokesman said in an email.

“We have a long-standing relationship with Amazon, and we continue to work toward a resolution.”

Earlier this year payments provider Visa announced plans to hike interchange charges on items ordered in the UK from Europe.

The company - which is the biggest issuer of debit cards in the UK – informed its 4,000 clients of plans to increase interchange fees in March.

Under it, the rate increased to 1.5% for online credit card payments - a fivefold increase.

For debit card transactions, the rate rose from 0.2% to 1.15%.

The move will particularly affect online transactions with EU-based companies in sectors such as online retail, hospitality and travel.

Interchange payments are levied on behalf of banks each time a payment is made, with the money then passed on to the card-issuing bank.

Will you still be able to pay on Amazon once the changes kick in? Let us know in the comments below

It follows a similar move from rival Mastercard earlier this year.

In January, Mastercard said EU-based businesses could be asked to pay up to five times more fees when UK consumers order an item from abroad.

The EU introduced a cap on interchange fees in 2015 after concerns that hidden costs were leading to excessive charges for both companies and consumers.

However, Mastercard said that the current cap no longer applies now that Britain has left the EU - warning that payments between the UK and European Economic Area are now deemed "inter-regional".

From October 15, Mastercard will charge a 1.5% fee for every online credit card payment from the UK to the EU, up from 0.3% at the moment.

For debit card payments, that fee will jump from 0.2% to 1.15%. It's triggered fears that struggling retailers could hike prices for Brits who order from abroad.

Kevin Hollinrake, chair of the all-party parliamentary group on Fair Business Banking, called for regulators to introduce a new cap.

"This smacks of opportunism and I would urge the regulators to step in as a matter of urgency to ensure that financial institutions do not use Brexit as an opportunity to hike up costs that consumers will ultimately bear."

Adam French, Which? consumer rights expert, said: "Consumers are already facing significant inconvenience and extra costs when shopping with businesses based in the EU and Mastercard's decision to reimpose these hefty charges will come as another blow.

"The success of Brexit will be judged by how it affects our everyday lives, so the government must not neglect these consumer issues. Ministers must do a better job of explaining a confusing array of new rules and regulations and the government needs to work with the EU with a view to removing these costs as part of future negotiations."

Inflation hits highest in nearly a decade at 4.2% as car prices and energy bills soar

Barclays customers told they’ve missed mortgage payments despite paying in full