The Amazon vs. Visa Standoff Is Over: Two Companies Come To An Agreement

Amazon and Visa have reached an agreement after a long-running dispute over huge credit card fees, so U.K. consumers who want to use Amazon can rest easy knowing there will not be a ban on Visa card payments.

“Visa is pleased to have reached a broad, global agreement with Amazon,” a spokesperson for Visa said in an email to Bloomberg. Visa added that the two companies would collaborate on “new product and technology initiatives to ensure innovative payment experiences for our customers in the future.”

“We’ve recently reached a global agreement with Visa that allows all customers to continue using their Visa credit cards in our store,” Amazon’s spokesperson wrote in a statement on the matter to CNBC.

The e-commerce giant will also drop the 0.5% surcharge on credit card transactions in Singapore and Australia, which it introduced last year in response to Visa’s fees. The dispute started in November when Amazon said it would no longer accept payments via Visa credit cards in the U.K. after Jan. 19.

Two days before the expected change was scheduled to take place, Amazon abandoned those plans and reentered negotiations with Visa. The changes in the U.K. came after it left the European Union, and Visa's interchange fees for credit cards rose from 0.3% to 1.5% as it was no longer bound by the E.U.’s fee limit.

Though there is no information on the specifics of the agreement, Amazon had been putting pressure on Visa to lower its fees after growing frustration from retailers across the country.

Retailers have long been frustrated with the fees they pay every time a customer swipes a card at checkout. While it does not amount to much at the time of checkout, overall Bloomberg estimates that merchants spent $110 billion on card processing fees in 2020.

“The big-picture significance of this dispute is that it has drawn attention to these high fees,” Merchants Payment Coalition, an industry group, said in a statement to Bloomberg.

Roger De’Ath, U.K. manager at the fintech firm TrueLayer, told CNBC, “For too long, cards have been retrofitted into online checkouts, creating an invisible web of hidden costs and unwieldy payment structures that affect the cost base of every single retailer.”