Clash of the titans as Amazon declares war on Visa

Amazon has written to some of its UK customers to say it will no longer be accepting Visa credit cards as payment from next year.

The US ecommerce giant has yet to notify this customer, so maybe Amazon has only contacted those who use Visa credit cards to settle their Amazon bills, but there’s little doubt this is official policy. The Mail has a screenshot of the email, which stresses the ban doesn’t apply to Visa debit cards. The report speculates that Visa is raising its transaction fees because it’s no longer constrained by EU rules.

Visa chose not to address that possibility in its emailed statement to Telecoms.com. “We are very disappointed that Amazon is threatening to restrict consumer choice in the future,” said the statement. “When consumer choice is limited, nobody wins. 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.“

It’s intriguing that Visa should choose to dwell on the concept of choice, since it’s a leading member of an electronic payments oligopoly that has been in place for decades. What choice do vendors have if it does decide to unilaterally raise its rates? What choice do any of us have when it comes to participation in the digital economy?

So what we have here is an e-commerce near monopolist locking horns with a payment processing near-monopolist. In many ways this is good for the consumer because it’s one of the only ways to keep these unaccountable digital titans  honest. On the other it’s probably just a bit of showboating to add spice to a negotiation that has presumably been underway for some time and is likely to conclude with Amazon getting a better deal from Visa than anyone else, regardless.

It should also be noted that Amazon has a much more cozy relationship with Mastercard in the UK, as illustrated by the offer of a co-branded credit card for those determined to sell their soul to the etailer. You have to wonder whether Mastercard is also planning to raise its rates next year, but has been granted a more dignified form of negotiation due to this existing relationship.

For the rest of us, we can but watch on impotently as the digital gods squabble in the heavens over our hard-earned cash. The pandemic and consequent lockdowns have concentrated even more power in the hands of a small number of players such as Amazon and Visa. Regardless of how this particular issue resolves itself, both of them seem destined to win in the long term.