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

[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.