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