Here’s what to do when online retail giant Amazon bans Visa credit cards

Here’s what to do when online retail giant Amazon bans Visa credit cards

Millions of Amazon customers will no longer be able to make purchases with a Visa credit card from Wednesday, the online retailer has warned.

It has taken the dramatic step of banning such payments due to what it claims are “high fees” that Visa charges to process the transactions.

Here’s what you need to know.

Advance warning: Millions of Amazon customers will no longer be able to make purchases with a Visa credit card from Wednesday

will I be affected?

Millions of businesses and individuals in the UK use Visa credit cards. Barclaycard and HSBC are among the banks that issue them.

Amazon and Amazon Prime customers will be affected, as well as those with Amazon-related subscriptions, such as with Audible.

What do I have to do?

If you’re an Amazon customer making purchases with your Visa credit card, you’ll need to use a debit card instead or find a new credit card provider.

If you store your bank details with Amazon to facilitate payments, you will also need to change them.

Should I switch to debit card?

You could, but there are good reasons to stick with a credit card — as long as you pay your bill in full each month.

If you make a purchase with a credit card for between £100 and £30,000, you are protected by the consumer rules.

This means that your credit card provider must bear the same responsibility as the retailer if something goes wrong.

If you use Amazon Marketplace, you might find this protection particularly reassuring.

So I’m going to apply for a Mastercard?

You could, but be careful. Sarah Coles, senior personal finance analyst at wealth management platform Hargreaves Lansdown, warns: “If you want to continue paying with a credit card, you may need to apply for a Mastercard, which isn’t just an irritation, but could affect your credit report too.

“Banks are more cautious about lending to people who already have access to lots of credit.”

Why does this happen?

Amazon says it’s taking the plunge because of Visa’s “high fees.”

Last year, Visa increased the fees it charges on online and phone transactions between UK shoppers and EU-based businesses from 0.3% to 1.5%.

While Britain was in the EU, purchases were protected by an EU-wide transaction cost cap, but that cap is no longer in place.

Mastercard also increased its fees by the same amount. However, Amazon has not taken the same approach with Mastercard, with which the retailer issues credit cards.

Amazon is currently offering a £20 gift card to new Amazon Platinum Mastercard customers.

Will he definitely move on?

Some experts had predicted that Amazon’s threat was designed to induce Visa to lower its fees.

However, since neither side has moved, consumers should be prepared for it. Visa said it was “very disappointed” with Amazon’s decision.

“When consumer choice is limited, no one wins,” he added.

And the opinion of the regulator?

The Payments Systems Regulator (PSR), which oversees these fees, says it is looking into the matter.

Last week the regulator revealed it had not seen evidence that costs for card issuers had risen enough to justify higher fees.

Writing to the Treasury Select Committee, PSR boss Chris Hemsley said: ‘Our proposed work will take a closer look at the reasoning behind the recent increases and whether this indicates any themes or concerns that warrant action on our part.


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