Amazon Strikes Global Deal To Accept Visa Credit Cards (bbc.com) 45
Amazon will accept Visa credit cards across all of its sites after the two businesses reached a global agreement. From a report: The online retail giant had last year threatened to stop the use of Visa credit cards in the UK due to the fees Visa charged to process payments. Amazon customers in Singapore and Australia also had to pay a surcharge if they used a Visa credit card to purchase goods. However, Amazon and Visa said they have now struck a deal. The Visa surcharge on Amazon's Singapore and Australia websites will be removed from Thursday, 17 February. Amazon had already postponed the ban on using Visa credit cards in the UK while negotiations continued.
Not too surprising (Score:3)
The era of store cards like sears in cs text books (Score:2)
Store cards where a thing in the 1980's, be they charge cards, or version two credit cards rebranded - which failed for some retailers in the uk - i am sure amazon could reinvent that rabbit as they have done with mail order.
Sears was the example of an academic case study . I guess a conversation with visa might have mentioned that idea and technical capability to reinvent sears charge card.
Visa is anti competition with the Olympics deal and if a pay network becomes non universal then it becomes not impor
Re: (Score:2)
How is it anti-competition? Visa paid a bunch of money to the IOC to be a sponsor. MasterCard, AmEx, etc., they could've paid more for it.
You might as well complain about Coke or McDonald's being anti-competitive for the same reason. Or that you can only see the Olympics on NBC (try watching it on another network - they're not allowed to show photos or videos, and never the IOC logo).
Or M
Greedy bastards agree to keep taking money. (Score:2)
Re: Greedy bastards agree to keep taking money. (Score:2)
Re: (Score:1)
So..what exactly do you propose to take it's place?
I mean, ok, sure, it often sucks, but it sucks less than EVERYTHING else tried before.
Re: Greedy bastards agree to keep taking money. (Score:2)
Re: (Score:1)
We were talking about "Capitalism", not either corporatism or socialism...
Re: (Score:2)
We were talking about "Capitalism", not either corporatism or socialism...
In theory, there's a difference. In practice today, not so much. No CEO in their right mind would run the business they're CEO of as a sole proprietorship, because then they'd be personally liable for everything the company did, as opposed to having a corporate shield. In practice, they can take legal risks and engage in behaviors that they would never do if they had personal liability.
Better headlines, please. (Score:3, Insightful)
"strikes" is one of those contronyms which good editors will not use in a headline like this without a lot more context. Did Amazon strike the deal from the plate; i.e. strike it as a possibility? Or strike it as in mint it into existence?
Thank goodness for the summary and the actual linked-to article.
There is no "good guy" here (Score:4, Informative)
Visa's largest fee increase was for cross-border interchange payments and Amazon UK were stung by it because they process their payments in Luxembourg to reduce the amount of UK tax they pay.
The vast majority of merchants in the UK process their payments in the UK. Whilst their own domestic interchange fees did also rise, they were not affected in any way by the cross-border interchange increase.
There is no "good guy" here. On one hand you have Visa taking advantage of Brexit to hike their fees and on the other hand you have Amazon having a strop because it hurt their their tax avoidance strategy.
Re: (Score:2)
I bet you can add in the nuisance of interchange fees based on loyalty and reward systems. These vary according to card, issuer, and sometimes the goods being purchased. And they sting some merchants who care not one bit for these card loyalty programs. Amazon actually benefits and/or participates in some of these, so they get it, but issuers resist identifying the card and fee relationships, fearing merchants will try to divert purchases to 'less expensive' forms of payment. And that is a whole other topic
Re: (Score:2)
Interchange was originally set up to encourage card issuers. This was because there was a lot more money to be made by banks offering payment acceptance to merchants than there were issuing cards to customers. You can't charge customers for having and using a debit card, but you can charge a merchant for accepting one - so the interchange attempted to address that imbalance.
As you rightly said, it's also been used to fund card loyalty schemes and Apple Pay also takes a small cut of that if they are involved
Re: (Score:2)
Why do you claim Amex fees are higher than other issuers/acquirers? Is this a current (today) situation?
I seem more parity on fees than ever, though circumstances do differ for certain industries, and more often for processors, who have a variety of unique fee structures.
Re: (Score:2)
This [bankrate.com] was written before the current fee change but, back then, Amex was 100 bps higher than both Visa and Mastercard.
Re:There is no "good guy" here (Score:4, Interesting)
That was a great article. But it was lacking in some areas...
First, it focused on 'overseas travel', and I assume it meant Americans traveling overseas: "When choosing a credit card for overseas travel,"
Mentioning acceptance, the article seems to give the impression that Amex and Discover are accepted at fewer merchants than MasterCard and Visa. As of 2021 Amex was accepted at 99% of merchants that also accepted Visa/MasterCard in the US, but does lag behind in the rest of the world. Not sure this impacts fees.
From another article: "A Feb. 2020 Nilson Report claims that American Express is now accepted at 10.6 million merchants in the United States, equating to a 99% acceptance rate.:. At that time, Visa was reported as accepted at 46M locations, MasterCard at 37M, Discover at 48M, and Amex at 44M... Close in the US, but overseas perhaps different.
This same article stated "Most Amex cards offer premium rewards, and each swipe from these cards can cost merchants 2.3% of the sale or more. This is a significant fee reduction compared to years past, resulting in a larger acceptance of Amex cards nationwide. In contrast, Visa, Mastercard and Discover can charge fees of between 2.15 to 2.26%."
Now, to be fair, most card issuers offer rewards. Amex isn't unique in this, just watch the ads. But 2.3% v 2.15%? Actually, given that the UE and UK both cap interchange fees, I'm wondering if this is even entirely accurate or meaningful. .15%? An interesting difference. But I'm pretty certain that 1.5% fees are rare enough to be superfluous.
But to debunk a few other statements:
Merchants can process Amex via many avenues, and virtually all processors that handle MasterCard/Visa also handle Amex. Many banks that process can give a merchant a single statement with all their credit card activity, MC/V/Amex. Amex acts as issuer and acquirer, so it is indeed unique there, but actually several other entities issue Amex cards, including Citibank and USAA, for instance, but also others, and worldwide several banks including Bradesco. This complicates the interchange fee regulation compliance, as fees for the interchange cards were the basis, and the impetus, for most regulation. Debit also worldwide. Amex is in the debit business now, so that's going to be interesting.
I think, if research were done, you might find that Amex is closer to MC/V in fees than expected. And if that were all, merchants might change their minds.
Re: (Score:2)
Ahh yes, sorry, I was talking about UK and Europe, rather than the US.
To be honest, I'm not remotely surprised that Amex is accepted at 99% of merchants in the US - the clue is probably in the name :)
Re: (Score:2)
Re: (Score:2)
Yes and no.
As someone who voted remain, I agree with your general premise - however Amazon weren't objecting to moving to a cross-border interchange fee structure. They'd been on that fee structure since the beginning of 2021.
Amazon's objection was the significant price increase that Visa decided to apply to cross-border interchange in October 2021 - which was far higher than the price increased for domestic interchange.
Re: (Score:2)
Amazon's objection was the significant price increase that Visa decided to apply to cross-border interchange in October 2021 - which was far higher than the price increased for domestic interchange.
Part of the issue is the contract between Amazon and Visa. Visa may have given Amazon time to move their processing however Amazon UK did not move their processing to the UK to avoid the fees. Or they would have to negotiate a new contract which they did.
Re: (Score:2)
I would not calling it "taking advantage" of Brexit as a consequence of Brexit. The UK left the EU. Amazon UK processed their payments through Luxembourg which is a member of t he EU. Therefore Amazon UK has to be charged non EU rates according to existing rules. There were going to be consequences which Brexit supporters did not recognize would be a problem.
That wasn't the problem and it's not about Brexit. All a post Brexit UK did was provide Amazon with a G7 sized economy that gave Amazon a plausable excuse to try to force negotiation of their transaction fees with Visa worldwide, not just for the UK . Amazon were quite happy with Mastercard's rates in the UK post Brexit and Visa's increase in rates were going to match Mastercard's. It wasn't like Visa were going to become more expensive than Mastercard, they were going to be the same. Amazon however are in
Cardholders should pay the fees (Score:3)
Thereâ(TM)s a complete lack of transparency and incentive to shop around for cards with the lowest fees while they're paid by the merchants. It's a sweet deal for the card companies. It shouldn't require a company the size of Amazon to force competitive pricing. Many banks already add a separate transaction fee to overseas transactions, so why not do the same for credit cards?
Debit cards (Score:2)
I lived in Switzerland for a few years. Everyone used debit cards for most transactions (chip and PIN). Much lower costs. Fast and easy. Credit cards often had a surcharge to use them.
In the US, credit cards have a monopoly and skim about 3% off of every transaction. It's a real gravy train for them (and, of course, a cost to you). They also do things like prevent merchants from charging a fee to use credit cards.
(Switzerland also got rid of paper checks completely. All payments were by EFT from your bank a
As usual in the US, it's a per-state thing... (Score:2)
In the US, it's illegal to charge a fee for credit card use in five states [usatoday.com].
It's legal in all states to offer a discount for cash payments, which is the same thing more or less.
Re: (Score:2)
-It's like a default opt-in even for cash while the rewards programs turn transaction fees into an opt-out. It is backwards.
Re: (Score:2)
The credit cards cancel the contract with the merchant if they do that, which effectively makes it impossible.
I think there are some attempts at laws to make that illegal but none exist yet.
Re: (Score:3)
Credit card corps have paid for laws to protect their monopoly position.
Re: (Score:2)
The US only started using chip-and-pin in a large scale a couple of years ago, when the CC companies decided to force it by shifting liability for fraudulent swipe transactions from the issuing bank to the merchant. Before that, no one was willing to replace their point-of-sale hardware to support it. Afterwords, everyone did. So give the US some time to catch up with the rational, more advanced ways of Europe ;)
Don't even get me started on paper checks. I was in the banking industry here in the US for 20+
Re: (Score:2)
I lived is Switzerland 15 years ago and there were no paper checks and most transactions were debit cards.
I would think that 15 years would be enough for the US to catch up to Europe.
Re: (Score:2)
I lived is Switzerland 15 years ago and there were no paper checks and most transactions were debit cards. I would think that 15 years would be enough for the US to catch up to Europe.
lol you underestimate the US's resistance to change. ESPECIALLY if the better idea comes from Europe.
Re: (Score:2)
Europe had much more incentives to solve that problem due to their losses. If the situations were reversed, it's a reasonable guess that the US would have pushed forward much quicker
Re: (Score:2)
Re: (Score:2)
https://www.digitalcheck.com/w... [digitalcheck.com]
"Unlike the Unites States online card authorization environment, the UK has primarily been an offline authorization market. Because of the difference in authorization environments, UK card
Re: (Score:2)
If you use debit instead of credit, you rarely get a discount. Gas stations used to be the only places that gave you a cash discount but even some of them don't anymore.
But in another sense, everything has a transaction fee. Even the store is marking up price so that they can buy a building, hire cashiers, etc. Debit cards cost money to operate, servers to buy, techs to hire, but it gets paid for by investing your money and sometimes by bank fees. The credit card fees stand out because they're a bit mor
Re: (Score:2)
I hope you realize that the "discount" or "cash back" that you get when using a credit card is just a partial rebate of the money they take from you when you use the credit card.
Debit card transaction fees are much less that the 3-5% that credit cards charge.
Re: (Score:2)
What's best for me? (Score:2)
There's a whole mess of complexity in these issues. Ultimately whatever money I spend gets dispersed amongst the participants - and I very specifically do not pay attention to that allocation. Not my problem. I buy nearly everything on credit cards, but I haven't carried a balance in a decade. I accumulate points, and turn them into things - usually gift cards. I did the math, and I do right by me. The only exceptions are for local unique restaurants, and farmer's markets. That's it.
If the rules change, an
Re: (Score:2)