American multinational tech company, Amazon has reached a global agreement with Visa to settle a dispute over credit card fees.
With this dispute settlement, Amazon customers in the U.K. can now continue using Visa credit cards.
Investors King recalls that Amazon’s UK website had disclosed to customers that it will stop accepting payments made with UK-issued Visa credit cards from 19 January.
This affected millions of people who use a Visa credit card to buy products on Amazon’s UK website and/or pay for their Amazon Prime membership.
According to Amazon, this decision is “due to the high fees Visa charges for processing credit card transactions”.
However, following an agreement between the two parties, Amazon will drop a 0.5% surcharge on Visa credit card transactions in Singapore and Australia, which it introduced last year.
“We’ve recently reached a global agreement with Visa that allows all customers to continue using their Visa credit cards in our stores.
“Amazon remains committed to offering customers a payment experience that is convenient and offers choice”, an Amazon spokesperson told CNBC via email on Thursday.
Visa also told CNBC that its agreement with Amazon would also see the two companies collaborate on “new product and technology initiatives to ensure innovative payment experiences for our customers in the future.”
According to Forbes, companies such as Visa and Mastercard provide the technology to facilitate payments between merchants and financial institutions. They make money by charging card issuers and merchants a fee on every transaction.
Investors King gathered that last October, Visa began charging 1.5% of transaction value for credit card payments made online or over the phone between the UK and EU, and 1.15% for debit card transactions, up from 0.3% and 0.2%, respectively.
Analysts revealed that average credit card processing fees across the industry range between 1.5% and 3.5%.
Meanwhile, Visa has made many changes to its business to accommodate the changes in the global financial ecosystem.
Tekedia reports that this includes onboarding crypto currency as means of payment through partnership with blockchain-powered cross-border payment facilitating companies.
