Amazon to stop accepting Visa credit cards from January 2022 – here’s all you need to know

eskbanker

I haven't researched any stats but the UK's share of global Visa (and AmEx/MC) revenues must be tiny, so it would surprise me if the UK arm of a retailer, or UK banks, moving away from them had a material effect on share price, market share, etc, or is the UK situation being mirrored extensively elsewhere too?

Migster

eskbanker said:

I haven't researched any stats but the UK's share of global Visa (and AmEx/MC) revenues must be tiny, so it would surprise me if the UK arm of a retailer, or UK banks, moving away from them had a material effect on share price, market share, etc, or is the UK situation being mirrored extensively elsewhere too?

As I understand it, the change is Brexit related and has an impact on both the UK and the EU. I believe both schemes now consider the UK to be outside of the EEA so different fees/interchange apply for online transactions involving a credit card. Amazon UK routes payments through Luxembourg, so as far as the schemes are concerned it is in the EEA and pays the higher fees. I'm pretty sure the higher fees apply to UK online merchants too if they take payments from cards issued in the EU.

eskbanker

Migster said:

eskbanker said:

I haven't researched any stats but the UK's share of global Visa (and AmEx/MC) revenues must be tiny, so it would surprise me if the UK arm of a retailer, or UK banks, moving away from them had a material effect on share price, market share, etc, or is the UK situation being mirrored extensively elsewhere too?

As I understand it, the change is Brexit related and has an impact on both the UK and the EU. I believe both schemes now consider the UK to be outside of the EEA so different fees/interchange apply for online transactions involving a credit card. Amazon UK routes payments through Luxembourg, so as far as the schemes are concerned it is in the EEA and pays the higher fees. I'm pretty sure the higher fees apply to UK online merchants too if they take payments from cards issued in the EU.

Wouldn't necessarily disagree with any of that but my point was that this is essentially a highly localised issue and therefore unlikely to be a significant impact on a massive global business like Visa, so a reduction in Visa revenue arising from Amazon's UK arm (or UK banks) moving to Mastercard will only be a minor dent in corporate terms and so wouldn't have had any material lasting impact on the share price, etc, hence the five-year charts for Mastercard and Visa not diverging particularly significantly.

cx6

Received an email from Amazon today saying basically they have reached an agreement with Visa.

Dear ...

We’ve recently reached a global agreement with Visa that allows all customers to continue using their Visa credit cards in our stores. As a result, we will not move forward with our previous plans to stop accepting UK issued Visa credit cards

GalacticaActual

I received an email from Amazon this morning (17th February 2022) to say Amazon have reached a global agreement with Visa and all customers can continue to use their Visa credit cards at Amazon:

phillw

eskbanker said:
Wouldn't necessarily disagree with any of that but my point was that this is essentially a highly localised issue and therefore unlikely to be a significant impact on a massive global business like Visa, so a reduction in Visa revenue arising from Amazon's UK arm (or UK banks) moving to Mastercard will only be a minor dent in corporate terms and so wouldn't have had any material lasting impact on the share price, etc, hence the five-year charts for Mastercard and Visa not diverging particularly significantly.

Whether it has an impact on the share price is down to the shareholders.

I would have thought Amazon would have tried to get a solution before offering people £5 to switch cards & Visa must have been worried about losing the business to come up with a solution.

WillPS

phillw said:

eskbanker said:
Wouldn't necessarily disagree with any of that but my point was that this is essentially a highly localised issue and therefore unlikely to be a significant impact on a massive global business like Visa, so a reduction in Visa revenue arising from Amazon's UK arm (or UK banks) moving to Mastercard will only be a minor dent in corporate terms and so wouldn't have had any material lasting impact on the share price, etc, hence the five-year charts for Mastercard and Visa not diverging particularly significantly.

Whether it has an impact on the share price is down to the shareholders.

I would have thought Amazon would have tried to get a solution before offering people £5 to switch cards & Visa must have been worried about losing the business to come up with a solution.

I suspect it was a show of force and a demonstration that Amazon would be in no hurry to re-enter negotiations if Visa didn't acquiesce. Of course we don't know the ins and outs of the deal but I presume it'd be more of a problem for Visa than it would have been for Amazon.

cx6

Am I reading the recent announcement correct - they shiny new Amazon Mastercard card I have will not be valid after January 2023 as NewDay are pulling out?

Dandytf

cx6 said:

Am I reading the recent announcement correct - they shiny new Amazon Mastercard card I have will not be valid after January 2023 as NewDay are pulling out?

to be auto replaced with newday 'pulse' cashback card.

thanks

eskbanker

MSE's piece about this is https://www.moneysavingexpert.com/news/2022/03/amazon-classic-and-platinum-credit-cards-will-be-scrapped-from-j/ but for some bizarre reason the associated 'official' forum thread has been posted on the TV MoneySaving board!

https://forums.moneysavingexpert.com/discussion/6341501/amazon-classic-and-platinum-credit-cards-will-be-scrapped-from-january-2023