Amazon reaches agreement with Visa on payment fees |

JENNY SURANE and VLAD SAVOV Bloomberg News Inc. has agreed to accept cards from Visa Inc. on its global network, settling a dispute that threatened to hurt the financial giant’s business and disrupt e-commerce payments.

The deal, announced by the two companies, resolves a dispute that at one point prompted Amazon to consider a ban on UK-issued Visa credit cards. The retailer said it will no longer charge additional fees to customers who use Visa cards on its site in Singapore and Australia, and it will not disable Visa credit cards from

“We recently entered into a global agreement with Visa that allows all customers to continue to use their Visa credit cards in our stores,” a company spokesperson said by email. “Amazon remains committed to providing customers with a convenient and choice checkout experience.”

Amazon had considered moving its popular co-branded credit card to Mastercard Inc., Bloomberg News reported. The Amazon card is one of the biggest co-branded wallets in the industry, and the company used the talks to renew the deal to get better terms from Visa, according to people familiar with the matter.

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Retailers have long balked at the fees they pay every time a consumer swipes a card at checkout. While that might be pennies per purchase, it adds up: Merchants spent $110 billion on card processing fees in 2020 alone.

“The significance of this dispute as a whole is that it has brought attention to these high fees,” the Merchants Payments Coalition, an industry group, said in a statement. “It showed that even the biggest retailers are frustrated, and the situation is even worse for smaller retailers who don’t have the scale and Amazon resources to stand up to an entity as powerful as Visa.”

Read more: Visa thinks it will fix any issues with Amazon, says CFO

For larger banks and merchants, Visa often strikes special pricing deals to persuade them to send more volume through its network. The company set aside $8.4 billion in fiscal 2021 for such incentives, up 26% from a year earlier.

But Visa has been known to go even further, including in 2015 when the company won the Costco Wholesale Corp co-branded credit card. by giving the retailer a discount on the fee it pays to accept all Visa cards, not just its co-brand. map. In talks to renew the long-standing co-brand card agreement between Amazon and Visa, the e-commerce company hoped to strike a similar deal.

Another sticking point was Visa’s policy of categorizing all e-commerce payments as “card not present,” which typically results in higher rates.

“Visa is pleased to have entered into a broad global agreement with Amazon, a Visa spokesperson said in an emailed statement. “This agreement includes Visa acceptance at all Amazon stores and locations today, as well as a shared commitment to collaborate on new products and technology initiatives to ensure innovative payment experiences for our customers in the future. .”

While Amazon has been overcharging customers for using Visa cards on its Singapore and Australia site for months, it sought to up the ante late last year by threatening to stop accepting cards entirely. company credit by UK customers. Last month the two companies said they were working on a deal, narrowly avoiding an outright ban on UK cards.

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