In a significant boost to the card network, Amazon has agreed to end its dispute with Visa over credit card fee charges.
This comes with a recently inked global deal that will allow UK customers of Amazon to shop freely with their Visa cards.
Amazon will now also drop a 0.5% surcharge on Visa credit cards transactions in Singapore and Australia, which it planned to introduce last year.
The dispute birthed in November of last year, when Visa transaction fees in the UK rose from 0.3% to 1.5%. Many commentators believed this was caused by the impact of the UK leaving the European Union.
“We’ve recently reached a global agreement with Visa that allows all customers to continue using their Visa credit cards in our stores,” stated an Amazon spokesperson.
“Amazon remains committed to offering customers a payment experience that is convenient and offers choice.”
Last month, British lawmakers planned to analyse increases in the fees Visa and Mastercard charge to businesses after the UK’s payments regulator found no evidence to justify the rises.
Commenting on the decision, Siamac Rezaiezadeh, Director of Product Marketing at GoCardless, stated: “As this chapter of the Amazon and Visa feud closes, it’s important to keep one eye on the bigger picture: businesses are now pushing back against unfavourable terms, ones they historically had little choice but to accept.
“The landscape has now changed dramatically with the rise of BNPL and open banking-enabled payments, both of which are increasingly popular with consumers. This gives businesses a genuine alternative to the card schemes.
“Replacing costly cards is now a viable, and perhaps better, option for every company, particularly as they do more business online — an environment which cards were simply not designed for. The continued maturity of innovations like open banking, coupled with business and consumer demand for more ‘digital-first’ payment methods, means that we soon expect to see a shift from ‘card on file’ to ‘account on file’”
Amazon has been pressuring Visa to lower it’s transaction fees. This is largely due to Amazon’s massive market power but also increased frustration along with a number of retailers regarding the costs from major card entities.
Card networks such as Visa and Mastercard also face pressure from ‘buy now, pay later’ fintech companies like Klarna, who effectively bypass the traditional payment via the use of cards.