Amazon and Visa end feud over fees that threatened to leave cardholders paying more—or locked out

February 17, 2022, 10:53 AM UTC Inc. has agreed to accept Visa Inc.’s cards across its global network, settling a feud that threatened to damage the financial giant’s business and disrupt e-commerce payments.

The agreement, announced by both companies, resolves a dispute that at one point spurred Amazon to consider a ban on U.K.-issued Visa credit cards. The retailer said it will no longer charge customers who use Visa cards on its site in Singapore and Australia an extra fee, and won’t turn off Visa credit cards from

“We’ve recently reached a global agreement with Visa that allows all customers to continue using their Visa credit cards in our stores,” a company spokesman said via email. “Amazon remains committed to offering customers a payment experience that is convenient and offers choice.”

Amazon had considered shifting its popular co-brand credit card to Mastercard Inc., Bloomberg News has reported. The Amazon card is one of the industry’s largest co-branded portfolios, and the company used talks to renew the agreement as a way to secure better terms from Visa, according to people familiar with the matter.

Retailers have long balked at the fees they pay each time a consumer swipes a card at checkout. While it can amount to just pennies per purchase, that adds up: Merchants spent a whopping $110 billion in card-processing fees in 2020 alone.

For the biggest banks and merchants, Visa often reaches special pricing agreements to persuade them to send more volume over its network. The company set aside $8.4 billion in fiscal 2021 for such incentives, 26% more than a year earlier.

But Visa has been known to go even further, including in 2015 when the company won the Costco Wholesale Corp. co-brand credit card by giving the retailer a break on the fees it pays to accept all Visa cards, not just its co-brand card. In talks to renew the longstanding co-brand card agreement between Amazon and Visa, the e-commerce firm was hoping to secure a similar deal.

Another sticking point had been Visa’s policy of categorizing all e-commerce payments as “card not present,” which typically translates into higher rates.

“Visa is pleased to have reached a broad, global agreement with Amazon,” a Visa spokesman said in an emailed statement. “This agreement includes the acceptance of Visa at all Amazon stores and sites today, as well as a joint commitment to collaboration on new product and technology initiatives to ensure innovative payment experiences for our customers in the future.”

While Amazon has been surcharging customers who use Visa cards on its site in Singapore and Australia for months, it sought to up the ante late last year with a threat to stop accepting the firm’s credit cards by U.K. customers entirely. Last month, the two companies said they were working on an agreement, narrowly avoiding an outright ban on U.K. cards. 

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