A group of crypto investors failed to buy a first printing of the U.S. ConstitutionÂ Fees face-offÂ The battle between the worldâ€™s largest e-commerce company and the worldâ€™s largest payments network started quietly.
It began in Singapore, wherein September Amazon.com Inc. started adding a small surcharge to any purchases made with a Visa Inc. credit card, citing â€śVisaâ€™s high cost of payments.â€ť The company soon began passing along the extra fee to customers in Australia as well. This week, Amazon upped the ante: The e-commerce giant announced it will ban Visaâ€™s cards in the U.K. starting next year.
â€śWe believe the cost of accepting credit card payments should be going down over time to allow merchants to reinvest savings into low prices and shopping enhancements for customers,â€ť Amazon said in an emailed statement. â€śYet despite technical advancements, some cardsâ€™ cost of payments continue to stay high or even rise.â€ť Visa, for its part, said it is â€śvery disappointing that Amazon is threatening to restrict consumer choice in the future. When consumer choice is limited, nobody wins.â€ť
Now, there are signs that the feud is making its way to the U.S., too. Amazon in recent weeks has announced deals with PayPal Holdings Inc.â€™s Venmo and Affirm Inc. that will give U.S. shoppers another way to avoid Visa. The retailer is also considering shifting its popular co-brand credit card to Mastercard Inc. amid the simmering tensions.
In some ways, the fight is nothing new. Retailers have long balked at the fees theyâ€™re forced to pay each time a consumer swipes a card at checkout. While it can amount to just pennies per purchase, that adds up: Merchants in the U.S. spent $110 billion in card-processing fees last year alone.
Most consumers have little idea that these costs exist or how much they amount to, even though retailers say theyâ€™re responsible for higher prices on many everyday goods. Theyâ€™re also a big part of the credit-card company business model. In the U.S., itâ€™s often these swipe fees that help bankroll popular premium credit-card rewards and fraud protection.
With its latest move, Amazon is taking a page from the likes of its rivals Walmart Inc. and Kroger Co., both of which have temporarily instituted similar bans on Visa cards. For now, most analysts believe Visa will be able to reach a truce with Amazon, as it has done with Walmart and Kroger in the past.
â€śWe expect Visa and Amazon to reach a U.K. deal as customer choice and ubiquity are paramount,â€ť Dominick Gabriele, an analyst at Oppenheimer, said in a note to clients. Still, he added, â€śwe remain cautious.â€ť â€”JenniferÂ Surane
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From World News including Title: What's Behind Amazon's Feud With Visa
Sourced From: www.bloomberg.com/news/newsletters/2021-11-19/what-s-behind-amazon-s-feud-with-visa
Published Date: 1637323730