Ecommerce giant Amazon plans to stop accepting Visa credit cards in the U.K. starting early next year.
The company said the decision came as a result of the high processing charges that Visa is now levying for handling credit card transactions.
“The cost of accepting card payments continues to be an obstacle for businesses striving to provide the best prices for customers,” an Amazon spokesperson said.
“These costs should be going down over time with technological advancements, but instead, they continue to stay high or even rise.”
Amazon has told its U.K. customers that they can still use their Visa debit cards and credit cards offered by Mastercard and American Express. However, it is also encouraging users to update their default payment method.
After Brexit, an existing EU limit on card interchange fees no longer applies in the U.K., which opened up the door for card networks to raise their charges. Earlier this year, both Visa and Mastercard announced that they were increasing their charges for processing online transactions between the U.K. and the EU.
Visa noted that it was “very disappointed that Amazon is threatening to restrict consumer choice in the future. U.K. shoppers can use their Visa debit and credit cards at Amazon U.K. today and throughout the holiday season.”
“We have a long-standing relationship with Amazon, and we continue to work toward a resolution, so our cardholders can use their preferred Visa credit cards at Amazon U.K. without Amazon-imposed restrictions come January 2022.”
Amazon’s move to stop accepting Visa credit cards might lead to the renegotiation of processing fees between the two companies — something smaller retailers cannot do since they lack the bargaining power.