Amazon has reached an agreement with Visa to accept its credit cards across its network, ending a standoff that threatened to disrupt e-commerce payments and deal a blow to a payments processor in the United States.
The details of the deal were not disclosed. But Visa and other payment cards have faced increasing pressure over their fees as more shoppers turn online during the pandemic.
The dispute highlighted the growing influence of retailers in the battle for fees.
In November , Amazon said it was considering dropping Visa as a partner on its co-branded credit card in the United States.
This came after the e-commerce giant confirmed earlier that it is stopping accepting Visa credit cards in the UK due to high transaction fees.
“The agreement means that Amazon customers can continue to use Visa credit cards in its stores,” the e-commerce group said in a statement.
Neither side mentioned what fees might be imposed in the future. The issue has surfaced in post-Brexit Britain, and the card fee cap imposed by the European Union is no longer in effect.
The dispute between Amazon and Visa was seen by some analysts as a bad sign for the card industry. They said that portends a problem in the much larger US market.
British lawmakers plan to scrutinize fee increases by Visa and MasterCard after the country’s payments regulator found no evidence to justify the increases.
Visa has reached a wide global agreement with Amazon
In October, Visa began charging 1.5 percent of transaction value for credit card payments made online or by phone between the UK and the European Union, and 1.15 percent for debit card transactions, up from 0.3 and 0.2 percent, respectively. The average credit card processing fee across the industry ranges from 1.5 to 3.5 percent.
Retailers in the past accepted credit card processing fees as an inevitable cost. But that may change due to innovations and increased consumer choice in the payments sector.
Credit cards accounted for a third of e-commerce spending in North America in 2020. But other payment options are getting stronger.
While alternative payments have been growing over the years, the pandemic has accelerated the downward trend in credit card applications and boosted the popularity of buy now, pay later.
The share of credit cards in e-commerce spending in North America fell 7 percent last year. While the share of buy now, pay later services increased by 78 percent.
A Visa spokesperson said: “This agreement includes acceptance of Visa in all Amazon stores and locations, as well as a shared commitment to collaborate on new product and technology initiatives.”
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