LONDON—Amazon has shelved its plan to stop accepting Visa credit cards issued in the United Kingdom, reports CNBC. A statement issued by Amazon yesterday said that the changes “will no longer take place.”
Amazon had planned to discontinue accepting Visa credit cards issued in the U.K. starting on Jan. 19, 2022, citing high swipe fees.
“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.
In the past, Amazon announced it would introduce a 0.5% surcharge on Visa credit cards in Australia and Singapore last year. Amazon has previously declined to say how much Visa charges the retailer to process transactions made on credit cards in the U.K. The U.K. Payment Systems Regulator has raised concerns about competition in this sector, which is dominated by Visa and Mastercard.
In the U.S., credit card swipe fees remain one of the highest operating costs for convenience store retailers after labor, according to NACS State of the Industry data. Consumer preferences for more touch-free transactions and the coin circulation challenge in summer 2020 led to record debit and credit card usage at convenience stores. In 2020, 74.6% of all transactions were paid by plastic, and overall card fees paid by the convenience store industry were $10.7 billion, NACS SOI data indicate.
Lack of competition in the payments sector has allowed credit card swipe fees to skyrocket, negatively impacting business owners who, to compensate for swipe fees, must increase prices. Banks that issue Visa and Mastercard credit cards charge merchants an average 2.25% of the purchase price to process transactions, according to the Nilson Report, a global news and statistics provider for the payment industry. Multiplied across millions of transactions each day, those fees more than doubled from $25.6 billion a year in 2009 to $67.6 billion in 2019 for Visa and Mastercard alone. The overall processing fees paid by U.S. merchants to accept all card payments jumped to $116.4 billion in 2019, up 88% since 2009, according to the National Retail Federation.