Amazon’s decision marks a ‘turning point in the modern economy’

Amazon’s decision to halt usage of Visa credit cards over high transaction fees, caused ripples across UK payments and ecommerce. 

Merchants have had aggreivances with transaction fees for many years, with the latest step by Amazon marking the issue coming to the fore. 

Siamac Rezaiezadeh, Director of Product Marketing at fintech in bank-to-bank payments GoCardless, stated that it’s a pivotal moment in the relationship between retailers and the card industry.

“Amazon’s decision marks a turning point in the modern economy; it’s the moment retailers decided they’ve had enough of being stung by the high fees charged by the card industry, simply for the privilege of collecting a payment,” stated Rezaizadeh

“This move will prompt other merchants to explore alternative payment options and represents a tailwind for the adoption of newer methods, such as account-to-account (A2A) payments. 

“Not only do these reduce the cost for businesses through removing the now-redundant intermediaries in each card transaction — they also make it easier, quicker and more secure to pay for consumers, thanks to other innovations like open banking.

“Amazon’s announcement shows that major brands are ready to fight back against the monopoly of card networks who have long had the power to set and raise fees. It continues the move away from pieces of plastic introduced in the pre-internet world to payment methods built for a digital society.”

Furthermore, it’s a move that many have stated has been elevated by Britain’s departure from the EU, with the limits on interchange fees no longer applying to the EU. 

David Maisey, CEO at MultiPay Global Solutions, however, stated his belief that the decision will force consumers to reconsider the fundamentals of retail.

He said: “Amazon is once again making people rethink the fundamentals of retail. Payment is a crucial part of the process which has for a long-time revolved around card providers and the fees they charge. 

“Even the arrival of mobile payments like Apple Pay and Google Pay did not disrupt card processing in the same way that today’s news will do. With Amazon questioning Visa’s fees, you can be sure that other retailers are now looking at them too. 

“Card providers are not going to disappear any time soon, thanks to their huge market and mindshare with customers. However, Amazon is firing the starting gun on a race for new payment methods. The good news is that the technology exists for retailers to offer new payment methods. 

“Many existing Android payment terminals can already take new alternative payment methods like instant payments. With just a quick software update they are ready to go. 

“For the consumer, it’s just as easy. Instant payment can be done by a mobile app that reads a QR code generated by the merchant device. Once scanned this triggers the payment, which goes directly to the retailer’s bank account, without any card fees being charged.”