Amazon bans Visa cards in UK

Amazon.com Inc will stop accepting Visa credit cards issued in the United Kingdom from next year because of high transaction fees, the e-commerce giant said on Wednesday, escalating its fight with the credit card company.

Separately, Amazon confirmed it was in talks with several payment networks including Mastercard Inc, American Express Co and Visa as part of its  "standard process" for reviewing its US co-branded credit card.

Bloomberg earlier on Wednesday reported that Amazon was looking to move its co-branded credit card from Visa to Mastercard.

In recent months, Amazon has introduced surcharges on customers using Visa credit cards in Singapore and Australia, citing high fees.

Amazon said the UK decision take will take effect on January 19, 2022. In a statement, it said such charges should be  "going down over time with technological advancements, but instead they continue to stay high or even rise."

Shares of Visa closed 4.7 per cent lower on Wednesday and shares of rival Mastercard dropped 2.8 per cent.

Amazon shares rose 0.2 per cent. American Express shares closed 0.7 per cent lower.

Visa last month began charging 1.5 per cent of the transaction value for credit card payments made online or over the phone between the UK and EU, and 1.15 per cent for debit card transactions, up from 0.3 per cent and 0.2 per cent, respectively.

The British Retail Consortium said other retailers in the United Kingdom faced higher charges for cross-border payments, following Britain's departure from the European Union.

Historically, retailers have accepted Visa's charges as the cost of access to its huge network of card users, analysts said, but that could be changing.

The move marks an  "important turning point in the payments industry," said Laura Hoy, equity analyst at Hargreaves Lansdown, adding Amazon may hope to drive more customers to its own payments system.

"Ultimately, we think Amazon has the edge in this game of chicken - whether customers adopt its own payment system or Visa gives in and lowers its fees, either is a win for the retail giant," Hoy said.