Amazon stops Visa payments on "too high fees" argument (UK)

[paxmao]

https://www.nytimes.com/2021/11/17/business/amazon-visa-britain.html

Visa is a solid company. Among its investors you will see Warren Buffet, that sees in this company a way realising its famous predicament of investing in the growth of US and the world. Basically a company that no matter who wins, is always there to process the payments.

Amazon is not happy about Visa piggy-backing on its success and has decided to only accept other cards. I wonder when will they figure out that they could actually be paying very little if they allowed bitcoin accounts in their platform.

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[Fortify]

https://www.nytimes.com/2021/11/17/business/amazon-visa-britain.html

Visa is a solid company. Among its investors you will see Warren Buffet, that sees in this company a way realising its famous predicament of investing in the growth of US and the world. Basically a company that no matter who wins, is always there to process the payments.

Amazon is not happy about Visa piggy-backing on its success and has decided to only accept other cards. I wonder when will they figure out that they could actually be paying very little if they allowed bitcoin accounts in their platform.

Unfortunately after the UK decided to leave the EU there are a lot of companies who are taking advantage of the chaos and the weakened negotiating power of the UK citizen (who are less protected by the laws of a much bigger bloc that have more resources to govern abusive company practices). You can see it with "roaming fees" (basically overseas call charges on phone networks) as well, that were gradually re-introduced as a cashcow after the EU had abolished the practice years ago for the benefit of every EU citizen. Now Visa and other card networks have decided to jack up the fees on card processing payments just because they can, while I don't like Amazon either they are effectively pushing back on this practice because it costs them a cut too. Basically the UK is being used as a Guinea pig right now by these mega corps because 51% of the population were too blind to see the obvious long term outcome with no benefits.

[magneto]

This is very interesting.

I don't think that it's necessarily a signal to move towards bitcoin, because if that was the case, then why would they allow Mastercard and AMEX to stay onboard among other payment processors?

Seems a bit targeted towards VISA to me, and probably why VISA stocks dropped by 5% today.

[DaveF]

From the article:

Businesses in Britain have already been subjected to higher credit card fees this year after the country’s exit from the European Union. No longer protected by the bloc’s cap on fees, Visa and Mastercard planned to raise the fees for online cross-border purchases made between Britain and many countries in Europe.

So Visa used Brexit to raise fees and Amazon said no.
Not surprising since they are both the 800lb gorilla so to speak.
Visa is massive in terms of card issuance and Amazon is well....Amazon.
I don't really have an issue with either doing what they did. It's business 101.
Make as much money as you can as long as you can.

With GB leaving the EU and not keeping the financial structures in place it allows businesses like Visa to do what they want. If others follow suit then either Amazon and others will stop taking all cards or just raise prices.

-Dave

[jackg]

while I don't like Amazon either they are effectively pushing back on this practice because it costs them a cut too.

I doubt amazon are pushing back on laws and legislations that don't benefit them, they're probably trying to get people to get their own card and are going to even higher lengths than previously (they were offering £20 cashback before - at least - for opening a credit card with them).

A few high street banks started switching to mastercard too (I think it was mastercard).

[Darker45]

I don't think this is more about Amazon and Visa. I think this is more about the UK, Brexit, and the EU. I think it seems unfair to say that Amazon is not happy about Visa piggy-backing on its success. Amazon and Visa's relationship, after all, is more like a symbiotic relationship. One is actually benefitting from the other. As a matter of fact, the option to pay with Visa is not completely taken out. Visa debit is still available. Although, of course, it is also a question why Amazon had to remove Visa credit when they could have just laid out all the options for their clients and let them have the freedom to choose the most convenient way for them. 

[adaseb]

Seems a lot of places don’t like Visa. Here in Canada if you go to a Costco and you want to pay by credit card they only accept MasterCard, not Visa. You try and pay by visa you get an error. 

I don’t think most people really care. Most people Probably got both Visa and MasterCard credits cards so it’s not an issue. Visa stock was down something like 5% however MasterCard was also down 3% and it’s because it was a down day in the markets, so obviously this doesn’t affect the price by a large margin.

[teosanru]

https://www.nytimes.com/2021/11/17/business/amazon-visa-britain.html

Visa is a solid company. Among its investors you will see Warren Buffet, that sees in this company a way realising its famous predicament of investing in the growth of US and the world. Basically a company that no matter who wins, is always there to process the payments.

Amazon is not happy about Visa piggy-backing on its success and has decided to only accept other cards. I wonder when will they figure out that they could actually be paying very little if they allowed bitcoin accounts in their platform.

Haha so elated to see big giants realising how expensive these so called payment gateways and credit card vendors are. The profits they make from all this is huge as global settlement today is a very big issue in itself and no one is able to provide a solution other than blockchain, but I think the only challenge that Amazon faces in accepting crypto payments is the hedging risk, the purchase agreements of Amazon are not in crypto which means they will have to sell the crypto in market but there exists a risk that the realisation might be lower due to fall in prices, either they should have a system of real time selling of crypto to usd whenever someone pays them in crypto or they should find some other way to hedge this risk only then would they be able to accept crypto as payments effectively.

[hugeblack]

What Amazon is doing confirms their need to create a way of paying value, no matter how they are, they might use centeral system or any other way.
The good side of this news is that although Visa handles thousands of transactions, the network is still expensive, so accepting Bitcoin will be very difficult, but at least there's a similarity.

[Poker Player]

Hopefully this will help them to start thinking seriously about payments with Bitcoin, LN or other cryptocurrencies. It would be a kick in the nuts to Visa if as a result of this in a while they implement crypto payments.

A few years ago, to think that Amazon could do it was almost a hallucinogenic delusion but today that possibility is becoming more and more real.

[NeuroticFish]

Although I see many rising their hopes vs bitcoin acceptance, unfortunately I don't think that's the case.

As somebody already said, it's pure business here. Both sides are flexing their muscles in order to get "a bit more". Of course, I expect that at some point soon they'll both agree to a middle point, since with the current state both sides will probably lose some money.

But that's all: business. No relation with bitcoin. They don't care about crypo. If they would care, they would have been simply buying it.

[kryptqnick]

It's not as big as the name of the thread sounds. If I understood correctly, it's only about Visa cards issued in Britain. Moreover, it's only about credit cards, whereas Visa debit cards are accepted. I also wonder how much is 'too high' in this situation. I always use debit cards, so I don't know the fees on credit cards, and my cards aren't British. Is it about high percentage or high fixed amount per transaction? It's important because answers to these questions can determine if accepting Bitcoin is a viable solution. With Bitcoin fees currently averaging at around $2.5, it's more than I usually have to pay for a fiat transaction fee, for instance.

[paxmao]

This is very interesting.

I don't think that it's necessarily a signal to move towards bitcoin, because if that was the case, then why would they allow Mastercard and AMEX to stay onboard among other payment processors?

Seems a bit targeted towards VISA to me, and probably why VISA stocks dropped by 5% today.

I am not saying that this is a move towards any kind of crypto, but rather than Amazon and other should start considering having crypto wallets from their clients to allow fast, easy and nearly feeless transactions if that is what they are interested. Why pay for every transaction to a payments processor when you could use an already existing system, liquid, safe and efficient such as bitcoin.

My take is that Amazon guys, regardless of their fantastic ability to execute their business strategy, are simply failing to realize the potential. Were they not already dominant in the market, this would have been a serious mistake.

It's not as big as the name of the thread sounds. If I understood correctly, it's only about Visa cards issued in Britain.
...

Please, notice the UK at the end of the headline. Do I need to make it more clear?

[Lucius]

Unfortunately, I can't read the article because it requires registration or subscription, so I might ask a question that has already been answered. How much of an impact can this move affect Visa and Amazon when it comes to both companies ’revenue in terms of the GB market? I'm trying to conclude whether Visa users in GB will start putting pressure on Amazon to reconsider their decision, or will Visa at some point decide to cut fees anyway and thus admit that Amazon was right after all?

I am not saying that this is a move towards any kind of crypto, but rather than Amazon and other should start considering having crypto wallets from their clients to allow fast, easy and nearly feeless transactions if that is what they are interested. Why pay for every transaction to a payments processor when you could use an already existing system, liquid, safe and efficient such as bitcoin.

It may seem so from the perspective of a slightly more advanced Bitcoin user, but for most of those who would use Bitcoin payment at all, things are not at all simple. People are used to transactions being instant, relatively cheap, and someone else always making sure everything goes well.

Take the example of one user who decided to buy something on Amazon and pay with Bitcoin and used a wallet that automatically deducted his fee and he clicked send. In the meantime, it happened that the time between the blocks was as much as 60 minutes and his transaction was stuck due to a fee that is no longer appropriate. He is now in a situation where he does not know what to do and why his transaction did not go through, and that is nothing that can be described as simple, fast, or efficient.

What I want to say is that there are two important factors that Amazon certainly takes into account when they do not want to implement the payment option with Bitcoin. The first is that most of those who own Bitcoin do not want to use it as a currency, and the second is that paying with cards is still easier for the average Joe than the simplest crypto wallet.

[NeuroticFish]

Unfortunately, I can't read the article because it requires registration or subscription, so I might ask a question that has already been answered. How much of an impact can this move affect Visa and Amazon when it comes to both companies ’revenue in terms of the GB market? I'm trying to conclude whether Visa users in GB will start putting pressure on Amazon to reconsider their decision, or will Visa at some point decide to cut fees anyway and thus admit that Amazon was right after all?

The impact is not that big, since only the UK VISA credit cards are affected. Still unpleasant and some customers may just buy from elsewhere.

I've found an alternate link here: https://fortune.com/2021/11/17/amazon-blocks-uk-visa-credit-card-payments-fee-dispute/
Some interesting numbers:

Visa and Mastercard this year both raised their interchange fees from 0.3% to 1.5% for credit-card transactions between the U.K. and the EU

The British Retail Consortium said Wednesday that the hikes were costing British retailers $135,000 more each day, while also adding costs for Italian, German, and Dutch retailers selling into the U.K.

It's interesting that Amazon didn't do the same with MasterCard, although I see they have the same "problem".
Or maybe they just try to force them to lower the fees - one by one.

[Findingnemo]

I wonder when will they figure out that they could actually be paying very little if they allowed bitcoin accounts in their platform.

Surely Jeff have this in his mind but its not officially a legal tender anywhere in the apart from that one El Salvador so he didn't have bitcoin in the accepted payment just because of regulatory issues and nothing else of I am not wrong.

[doomloop]

Amazon is not happy about Visa piggy-backing on its success and has decided to only accept other cards. I wonder when will they figure out that they could actually be paying very little if they allowed bitcoin accounts in their platform.

I would say that it is not really reasonable for Amazon to stop working with Visa because there are no alternatives and this means anyone who uses Visa based card will not be able to buy anything from Amazon, or at least in UK. I believe that it is high time that some companies get competition no matter how profitable or how horrible of a business idea it is.

I get that visa and mastercard has some "competition" but mainly they do not, they actually have a ton of small competitors that have zero power. Same with this chip crisis as well, I get that it requires a ton of money and a lot of expertise, but we should not be forced to wait and instead should have competition that could fix all of this. Monopoly was never a good thing and Visa is profiting from being a near monopoly.

[oHnK]

Monopoly was never a good thing and Visa is profiting from being a near monopoly.

I'm not affected by Amazon's decision to cut cooperation with a visa credit card from the UK, but on the other hand, the impact on Amazon itself is that they lose the segment of users who use the credit card.  But I'm sure this is just one form of negotiation with big companies that almost monopolize the market so wide on a global scale.  If the issue is because transaction fees are so high and Amazon hopes, those transaction fees should be cheaper because of technological developments.  Wouldn't this benefit the user?  I don't think this is detrimental to many parties other than Visa itself.

[stompix]

Amazon stops Visa payments, I can definitely see some pikachu faces from Amazon visa cards owners

What I want to say is that there are two important factors that Amazon certainly takes into account when they do not want to implement the payment option with Bitcoin. The first is that most of those who own Bitcoin do not want to use it as a currency, and the second is that paying with cards is still easier for the average Joe than the simplest crypto wallet.

There are also other downsides.
People always think of the cost as in one transaction and that's all, but Amazon also needs to pay a fee to move the coins it has received, even exchanges usually go through two steps of batching transactions from what I see when I try to trace my coins, then it's the thing with the fees, we're now experiencing a low fee period but just imagine a 50k tx added on top of what we have, it won't be cheap anymore.
Of course, we could use LN, but we first need users on LN which again, seems like one lengthy process although fortunately, it did pick a bit of steam lately..

But probably the most important thing is what you've mentioned, and actually renders these concerns unfounded, will people spend their coins? In every topic, I see things like "I'm not spending my precious coins", I think that even poeple who own both BTC and a credit card will go >95% of the time for the card.

[dkbit98]

It would be much better if they could just accepted Bitcoin and Lightning Network payments instead of doing this, all sounds like some big tech excuses from and secret deals from Amazon.
I wondered if Mastercard and other payment options are still available, so I looked on Amazon UK website and accepted payment methods still have Visa listed there as available along with MasterCard and American Express.
https://pay.amazon.co.uk/help/201754650

[DaveF]

It would be much better if they could just accepted Bitcoin and Lightning Network payments instead of doing this, all sounds like some big tech excuses from and secret deals from Amazon.
I wondered if Mastercard and other payment options are still available, so I looked on Amazon UK website and accepted payment methods still have Visa listed there as available along with MasterCard and American Express.
https://pay.amazon.co.uk/help/201754650

They are accepting it until mid January, so no surprise it's still listed. We also don't know if it's a bluff or not. Up until some IT person takes it out of the payment processing API they can still reach and agreement with VISA over the rates. It could just be they are both seeing who blinks 1st I think Vida will, possibly not a first but after a few weeks I think they will come back with a better rate.

Amazon stops Visa payments, I can definitely see some pikachu faces from Amazon visa cards owners

That is for the US, the UK already went MasterCard

https://www.amazon.co.uk/gp/cobrandcard/marketing.html?pr=ukndplat&plattr=footer&place=camp&ie=UTF-8&ref_=footer_cbcc
With an insanely high 21.9% APR I might add. As in wow holy fuck that's an interest rate.

-Dave

[jostorres]

Amazon is not happy about Visa piggy-backing on its success and has decided to only accept other cards. I wonder when will they figure out that they could actually be paying very little if they allowed bitcoin accounts in their platform.

I do wonder why Amazon has never accepted Bitcoin, and so far the only thing I think has been stopping them from doing this is the volatility of bitcoin. Maybe they think that accepting bitcoin is going to affect their business,. Since it is a platform that has to do with buying and selling, the price of bitcoin can go down at any point and that would result to them losing money after a product has been sold.

I am guessing that must be why they have decided to stay clear from bitcoin completely. It is possible that they must have thought about it and discussed it several times to know whether it would fit in. Anyways, they know platform would work best for them and that’s what they have chosen.

[Lucius]

But probably the most important thing is what you've mentioned, and actually renders these concerns unfounded, will people spend their coins? In every topic, I see things like "I'm not spending my precious coins", I think that even poeple who own both BTC and a credit card will go >95% of the time for the card.

We have the results of an interesting survey posted in Bitcoin Discussion in which 13% of 11 000 respondents said they would use Bitcoin "as a medium of exchange for goods and services" which in some way confirms what you noticed on the forum, but also what I always point out as one of the reasons why big players like Amazon are still not interested in Bitcoin as a payment option.

Those who have been with Bitcoin for a long time know what it's like to pay something 1 BTC back in 2015 (only $200+) or even earlier, and know that the same BTC is worth almost $60k today.

[so98nn]

while I don't like Amazon either they are effectively pushing back on this practice because it costs them a cut too.

I doubt amazon are pushing back on laws and legislations that don't benefit them, they're probably trying to get people to get their own card and are going to even higher lengths than previously (they were offering £20 cashback before - at least - for opening a credit card with them).

A few high street banks started switching to mastercard too (I think it was mastercard).

Yeah, this makes sense. I was wondering on what technology they are offering their Amazon Credit Card? Like Visa and MasterCards run on their VisaNet of global network, how about Amazon?
Are they having their own network like that, and if yes, is not it will cost them more than paying the little fees per transaction. I am wondering what is the strategy behind launching their own card.

At first it seems Visa rival but think the infra cost thats included in it. Or amazon credit card could just be a redemption based system where they will accumulate how much money is used and then charge it.

Anyways, its worth nothing that; Amazon being giant company and still they thinking about such fee changes is the reason they are best business model.

They should consider various options of crypto's. I have seen many micro-earning sites paying out the money in crypto after PayPal. Moreover everyone knows the popular Casino's which are based on the crypto so the implementation is not that hard.

[dezoel]

Do not get anything crypto related out of this because we are not doing all that better neither. There are some like Avax and SOL that are free or at least near free most of the time and yes I like them too. However, reality is that bitcoin and ethereum are the two most known coins and they charge so much more for each move.

I get that it is understandable to spend that on investment because you could make so much more, but when it comes to moving money around crypto is a horrible method right now. For something that came out to replace fiat and be a better version of money, crypto surely lacks the ability to be cheap and fast to move around. I hope that we could drop those gas fee problems but so far I would say this news is nothing related to crypto since with these costs Amazon wouldn't even look at crypto way, it just doesn't make sense.

[DooMAD]

So much for Visa "Working to connect everyone, everywhere" and "open doors all over the world".   

More like fleecing everyone, everywhere.  Sounds like doors are closing if they continue being greedy. 

[fiulpro]

https://www.nytimes.com/2021/11/17/business/amazon-visa-britain.html

Visa is a solid company. Among its investors you will see Warren Buffet, that sees in this company a way realising its famous predicament of investing in the growth of US and the world. Basically a company that no matter who wins, is always there to process the payments.

Amazon is not happy about Visa piggy-backing on its success and has decided to only accept other cards. I wonder when will they figure out that they could actually be paying very little if they allowed bitcoin accounts in their platform.

I do think that is not going to just affect them but at the same time a lot of people at once. VISA is very normal and I do think it's the most normal card that people carry around and use at the same time. It would not only be bad for Amazon but it would be bad for the VISA company as well, so what I see here is :
1.VISA companies needs to revise their rates.
2.Amazon needs to sort this out for the customers as well.
Bitcoins can be good but at the same time :
1. Lightning network needs improvements first
2. It would take time for sure to make such a big decision.
Some companies do rely more on credit card payments as well, hopefully am Amazon can provide people with other options and not just make one payment type a priority for them. 

[Silberman]

Although I see many rising their hopes vs bitcoin acceptance, unfortunately I don't think that's the case.

As somebody already said, it's pure business here. Both sides are flexing their muscles in order to get "a bit more". Of course, I expect that at some point soon they'll both agree to a middle point, since with the current state both sides will probably lose some money.

But that's all: business. No relation with bitcoin. They don't care about crypo. If they would care, they would have been simply buying it.

While true it is nice to see some push back against them, how many times we have heard in the past that bitcoin transactions were too expensive, while the people making that criticism forgot to mention that in many cases the fees they will pay for a transaction of that size will be higher with the traditional services like visa, now it is true this is just a business decision, but at the same time this means that if Amazon at some point makes the conclusion they can get an even bigger cut if people make payments with bitcoin then they can begin to accept it as a payment option and even promote it.

[DaveF]

Well Amazon blinked 1st: https://www.cnn.com/2022/01/17/tech/amazon-visa-uk/index.html
Makes you wonder how much Visa jacked up their rates vs. everyone else since Amazon picked on them.

Or was it more of Amazon picking on the biggest target to see how they did and if it went well they could go after the other players.

-Dave

[stompix]

Makes you wonder how much Visa jacked up their rates vs. everyone else since Amazon picked on them.

~ 5 times
https://www.ft.com/content/4820b619-4d35-4c6a-8523-fc685c047374

From October, Visa will charge 1.5 per cent of the transaction value for credit card payments made online or over the phone between the UK and EU, and 1.15 per cent for debit card transactions, up from 0.3 per cent and 0.2 per cent respectively.

And it's the same as Mastercard
https://www.bbc.com/news/business-55796426

From October, Mastercard said it would increase these fees to 1.5% on every transaction, up from 0.3%.

Probably Amazon has decided that it's far easier to deal with the merchants on the platform and have them cover a part of the cost that going to war with Visa.

[TheNineClub]

Ah yes, standard business politics. They didn't make a sweet enough deal for Amazon, therefore they are banned. Unfortunately, Amazon is in that position where they can dictate the terms for everyone. I don't know about Amazon and crypto, at least on any serious level, they seem to be too uptight about their business to have an open mind.

[Fortify]

Well Amazon blinked 1st: https://www.cnn.com/2022/01/17/tech/amazon-visa-uk/index.html
Makes you wonder how much Visa jacked up their rates vs. everyone else since Amazon picked on them.

Or was it more of Amazon picking on the biggest target to see how they did and if it went well they could go after the other players.

-Dave

I try to avoid Amazon like the plague, but it would seem in a roundabout way that they were actually sticking up for the consumer in this whole dispute. Almost nothing has changed with regards to the Visa cost mode, since the UK has left the EU they have decided to prey on this separated country like a vulture and stick up the fees just because they can. Hopefully a cryptocurrency is able to put all of these card payment networks out of business eventually, because they are just profit driven companies who will empty consumer pockets at any chance they can. It looks like Amazon was bluffing all along however, because there's a certain group of customers out there who are unlikely to make a move to Visa debit or Mastercard Credit cards.

[Sithara007]

1.5% is just too much. And both Visa and Mastercard increased their rates by the same amount. This is a classic example of how the monopoly works. These two companies are having an almost complete monopoly on the payment processor segment, and a multi-trillion company such as Amazon is having issues in getting a good deal out of them. I won't be surprised if Amazon comes up with their own payment processor (or teams up with some less known payment processor firm). But these things are going to take a lot of time.

[DaveF]

Makes you wonder how much Visa jacked up their rates vs. everyone else since Amazon picked on them.

~ 5 times
https://www.ft.com/content/4820b619-4d35-4c6a-8523-fc685c047374

From October, Visa will charge 1.5 per cent of the transaction value for credit card payments made online or over the phone between the UK and EU, and 1.15 per cent for debit card transactions, up from 0.3 per cent and 0.2 per cent respectively.

And it's the same as Mastercard
https://www.bbc.com/news/business-55796426

From October, Mastercard said it would increase these fees to 1.5% on every transaction, up from 0.3%.

Probably Amazon has decided that it's far easier to deal with the merchants on the platform and have them cover a part of the cost that going to war with Visa.

Ouch 5X? That's insane, or as I like to say. "I'm from New York, we have rules here, 1st you pull out a gun, THEN you rob me. You just can't show up and take my money, that's just not how its done"

I can see why Amazon tried to force some concessions. If they both went 5X I wonder why they picked on Visa.

Either way, I wonder how many other merchants are going to walk away from taking cards at those rates.
For smaller shops I can see them going back to cash only. Had they gone up a little bit at a time over the next 3 years I could see them just slowly adapting. But a big hit all at once it usually what causes people to walk away from a product / service.

-Dave

[stompix]

Either way, I wonder how many other merchants are going to walk away from taking cards at those rates.
For smaller shops I can see them going back to cash only. Had they gone up a little bit at a time over the next 3 years I could see them just slowly adapting. But a big hit all at once it usually what causes people to walk away from a product / service.

No, the scenario you picture is impossible.
First, the fees only apply to online purchases, and then only to purchases made outside of the UK with a UK card, so somebody that would switch to accept cash only could not take those clients, and shops that sell face to face are not affected by this.
So basically there is no way for anybody to really avoid it, and although it sounds really bad , like a 5x times increase is actually 1% on the price, with the current inflation paying £592 instead of £587 would probably not even matter anymore so most of it will be passed from amazon to merchants to consumers.

[paxmao]

Latest news are that they are seeking an agreement. Visa and Mastercard hold a great grip on the smaller or even to medium sized business as there are not that many alternatives. It is true that their "moat" is being eroded by the fintech initiatives, start-ups and local "heroes", etc.. but for now, they are there to stay and to "get a cut on the world growth". It is only Amazon and other super-large that can challenge or even become an alternative.