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Amazon has issued an update to its customers, with a notification stating: “Starting January 19 2022, we will no longer accept Visa credit cards issued in the UK.” The company noted payments from other credit cards or Visa debit cards would not be blocked but despite this, many experts have warned consumers will be limited.
Alternatives to Visa for Amazon customers
Katie Brain, a Banking Expert at Defaqto, reacted to the announcement.
“This is bad news for consumers as it limits their choice of payment types,” she said.
“Also, if you are looking to make a purchase of an item which is worth £100 or more it is wise to use a credit card instead of a debit card as you are then protected by section 75 if something goes wrong. This is especially useful if you are making a purchase through Amazon marketplace which are third party suppliers. For those who only have a visa credit card, they will be restricted from January.
“This could be a good time to review the credit card you have as many of the best zero percent purchase offers are with Mastercard. For those who would like a rewards-based card, American Express has some great offers. Alternatively, plenty of other retailers still take Visa and it may be worth shopping elsewhere.”
Ms Brain went on to break down where the “Best Buy zero percent Purchase cards” can be found today:
- Tesco Bank – Clubcard Credit Card, duration of purchase rate (months): 23, monthly fee: £0, card type: Mastercard
- M&S Bank – Shopping Plus Credit Card, duration of purchase rate (months): 22, monthly fee: £0, card type: Mastercard
- NatWest – Purchase and Balance Transfer Card, duration of purchase rate (months): 22, monthly fee: £0, card type: Mastercard
- Royal Bank of Scotland – Purchase and Balance Transfer Card, duration of purchase rate (months): 22, monthly fee: £0, card type: Mastercard
- Sainsbury’s Bank Dual Offer Credit Card, duration of purchase rate (months): 22, monthly fee: £0, card type: Mastercard
- Ulster Bank – Purchase and Balance Transfer Card, duration of purchase rate (months): 22, monthly fee: £0, card type: Mastercard
- Lloyds Bank – Platinum Balance Transfer Card, duration of purchase rate (months): 21, monthly fee: £0, card type: Mastercard
- MBNA Ltd – Dual Offer Credit Card, duration of purchase rate (months): 21, monthly fee: £0, card type: Mastercard
- Santander – All in One Credit Card, duration of purchase rate (months): 20, monthly fee: £3, card type: Mastercard
- Tesco Bank – Clubcard Credit Card, duration of purchase rate (months): 20 monthly fee: £0, card type: Mastercard
Millions to be affected
James Andrews, senior personal finance editor at money.co.uk, explained shops are “entirely free” to choose whichever payment method they want under the current rules. However, with Amazon’s plans to stop accepting Visa credit cards, millions of Britons who own said cards will be hit. Mr Andrews noted big names such as Barclaycard, HSBC and Vanquis all use Visa on their credit cards and with American Express rejected by many UK retailers, consumers will be left with limited options.
“People looking for rewards on their spending or trying to split the cost of shopping with a zero percent purchase card on Amazon will be effectively forced to choose a Mastercard,” he said.
“Hopefully, Visa and Amazon work out their differences before the ban comes into force on January 19, but in the meantime it would be wise to check your cards now – and think about switching to a Mastercard if you have the option.
“The good news is that some of the best offers on the market at the moment come from Mastercard. With, unsurprisingly, Amazon’s own rewards card powered by Mastercard, as well as table topping offers from Sainsbury’s, Tesco and M&S.”
However, other experts within the field have welcomed the change, noting it should work out better for consumers in the long-term.
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“It’s no wonder Amazon is stopping their usage”
Peter Kimpton, a Personal Finance Expert at Family Money, was not surprised by the announcement. He said with Visa’s high credit card transaction fees, it’s “no wonder Amazon is stopping their use on site”.
Mr Kimpton noted that even though Amazon is a clear market leader, it needs to be able to remain competitive with its many online competitors, as well as small businesses that people are trying to support more and more, especially after the pandemic.
“With this in mind, they need to be able to charge the lowest prices possible and still make a profit, so it makes sense that the first thing to try and make cuts on is transaction fees,” he continued.
“Visa has responded by criticising Amazon for restricting consumer choice, however, I don’t feel this will be a problem, with many consumers opting to have more than one credit card as well as multiple debit cards. I predict Amazon will see no decrease in sales due to this change, and we might even see other large retailers following suit.”
Luke Massie, CEO of VibePay, also commended Amazon on its first step in ending “Visa’s monopoly”.
“At a time when consumers are already facing significant financial pressures, the battle between Amazon and Visa will have an immediate impact on their choices,” he said.
“However, this dispute will bring the payments industry one step closer to card disintermediation, resulting in long-term benefits for the consumer. Rather than the likes of Visa having a monopoly on the payments industry, these battles, which we expect to see more of in the future, will open the door for fintechs who are taking advantage of technologies such as Open Banking and account-to-account payments. We will then see consumers have more choice than ever before.”
Indeed, the impact of the changes appears to already be having an effect on consumers. New findings by casinosites.org on Google search data showed online searches for Visas rival Mastercard exploded 1,300 percent today in the UK. This jump was 16 times the average volume in one day, an “unprecedented spike” in interest in Mastercard.
Additionally, the same data showed searches for “cancel visa” skyrocketed to over 700 percent today, nine times the average volume in one day.
A spokesperson for Casinosites.org commented: “Amazon is the ultimate player in the online retail industry, and as a significant percentage of the UK rely on Amazon deliveries to meet their shopping needs, news of the company no longer accepting Visa cards will have a significant impact on Visa users.
“The sudden spike in searches for Visa alternatives such as Mastercard on the day of the announcement shows just how vital online shopping is to our lives today. Losing business with a digital retail giant such as Amazon could be very damaging to Visa, and hopes may well be high within the organisation that they can reinstate a working relationship with Amazon.”
Express.co.uk readers responded passionately to the Amazon news. PercyVeeranc said: “Frankly I shan’t miss Amazon – and they certainly won’t miss me!” While Tactica warned: “Amazon about to shoot itself in the foot with British Consumers.”
However, others appeared to take the side, or at least understand the decisions made by Amazon. Fred999 noted: “Visa need to reconsider their charges if they are so much higher than Mastercard and other credit cards.”
While Urbanmongrel said: “Seems like a valid point. Most businesses will not accept AMEX because of the fees (myself included) and some EU issued payment options are also not accepted in the UK.”
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