The Amazon Visa credit card ban announcement on Wednesday saw Google searches for ‘Mastercard credit card’, ‘non Visa credit card’ and whether the credit card used by their bank was a Visa branded card spike by over 1,000% each as UK shoppers looked to different credit card options accepted by the retail giant.
Amazon is also reportedly considering switching its US Amazon co-brand credit card from Mastercard to Visa, according to Bloomberg.
But why is Amazon going to stop accepting Visa credit cards in the UK – and when will the Amazon Visa credit card ban start?
Here’s what you need to know.
Why is Amazon banning Visa credit cards?
In an email sent to UK customers on Wednesday morning, Amazon informed users of its giant online store that it will soon stop accepting UK-issued Visa credit cards due to “high fees” in the country.
The email to Amazon UK customers stated that customers “can still use debit cards (including Visa debit cards) and non-Visa credit cards like Mastercard, Amex and Eurocard to make purchases.”
It went onto ask customers to update their default payment method to reflect the change, or add one of the new eligible payment methods instead, before the change comes into effect.
Amazon UK’s move comes in the wake of increased credit and debit card transaction fees from payment providers Visa and Mastercard which took place following Brexit.
Prior to the UK’s departure from the European Union, transactions between the country and others in the European Economic Area were capped – meaning that companies like Visa could not suddenly hike fees on credit or debit card use for cross-border transactions.
But the impact of Brexit saw Visa and Mastercard increase transaction charges in early 2021.
Visa credit card transaction fees for those using debit cards issued outside the European Economic Area (EEA) for EEA vendors increased from 0.2% to 1.15% after the UK exited the agreement, while credit cards fees increased from 0.3% to 1.15%.
Mastercard likewise stoked criticism from UK companies and vendors when it increased its fees to 1.5% per cost of a transaction for credit card purchases between the UK and EU.
When will Amazon’s Visa credit card ban come into effect?
The retailer’s UK arm said that it will stop accepting Visa credit cards as payment for purchases made on its website from 19 January 2022 – giving UK customers approximately two months to prepare for the change.
Which UK bank credit cards are Visa?
As one of the most popular credit, debit and pre-paid card suppliers worldwide, it’s no wonder that many UK customers are concerned that their bank’s credit cards could fall into the Amazon Visa credit card ban.
While Natwest, Halifax and Lloyds Bank credit cards appear to be Mastercard branded, Barclaycard credit cards are Visa branded.
Likewise, HSBC’s Classic, Student, Balance Transfer and Purchase Plus credit cards are all Visa branded – meaning they will not be accepted as Amazon payments if issued in the UK and should the Visa UK credit card ban go ahead.
Monzo cards are Mastercard debit cards, so would be accepted.
What has been said about Amazon no longer accepting UK Visa credit cards?
An Amazon spokesman told the Press Association said: “The cost of accepting card payments continues to be an obstacle for businesses striving to provide the best prices for customers.
“These costs should be going down over time with technological advancements, but instead they continue to stay high or even rise.
“As a result of Visa’s continued high cost of payments, we regret that Amazon.co.uk will no longer accept UK-issued Visa credit cards as of January 19 2022.
“With the rapidly changing payments landscape around the world, we will continue innovating on behalf of customers to add and promote faster, cheaper, and more inclusive payment options to our stores across the globe.”
A Visa spokesperson said: “UK shoppers can use their Visa debit and credit cards at Amazon UK today and throughout the holiday season.
"We are very disappointed that Amazon is threatening to restrict consumer choice in the future.
"When consumer choice is limited, nobody wins.
They added: "We have a long-standing relationship with Amazon, and we continue to work toward a resolution, so our cardholders can use their preferred Visa credit cards at Amazon UK without Amazon-imposed restrictions come January 2022.“
Gareth Shaw, Which? Head of Money, said: “This announcement may come as a shock to some Amazon customers, but there have been long-standing concerns about soaring credit card fees that affect both consumers and businesses."Consumers used to paying with a Visa credit card should be aware that switching to a debit card would mean they lose some valuable legal protections that enable them to get their money back if anything goes wrong with a purchase.“We would encourage Amazon and Visa to urgently find a resolution to prevent any restriction on consumer choice.
"Regulators should also look very closely at this development and work to establish whether fees in the credit card market are fair and what impact this will have on competition.”