Amazon has announced it will stop accepting Visa credit cards for payments in the UK from January, citing the cost of processing payments, which has made it too expensive to support them.
“As a result of Visa’s continued high cost of payments, we regret that Amazon.co.uk will no longer accept UK-issued Visa credit cards as of January 19, 2022,” Amazon said in an email sent to customers.
However, the e-commerce giant said it will continue to accept payments on Visa debit cards, as well as other credit cards from other firms, such as Mastercard and American Express.
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The new rules highlight the impact of disruption decentralized finance (DeFi) and blockchain-powered payment systems have brought to the payment industry.
It thus beckons on payment companies such as Visa and Mastercard to adjust their framework to accommodate the new financial order of things.
Amazon said that technology advancements should be making payment processing fees reduce, but complained that they were actually increasing.
“The cost of accepting card payments continues to be an obstacle for businesses striving to provide the best prices for customers,” the company said in a statement.
“These costs should be going down over time with technological advancements, but instead they continue to stay high or even rise.
“With the rapidly changing payments landscape around the world, we will continue innovating on behalf of customers to add and promote faster, cheaper, and more inclusive payment options to our stores across the globe.”
A Visa spokesperson said the company was disappointed and hoped to resolve the situation before the deadline went into effect.
“UK shoppers can use their Visa debit and credit cards at Amazon UK today and throughout the holiday season,” the company said.
“We are very disappointed that Amazon is threatening to restrict consumer choice in the future. When consumer choice is limited, nobody wins.
“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 UK without Amazon-imposed restrictions come January 2022.”
Fintech and cryptocurrencies have provided alternative payment systems that are tremendously being adopted. One of the key factors driving the wide adoption is cheap transaction processing fees, which was made possible through the elimination of intermediaries.
The backdrop poses a huge challenge to traditional payment firms, as the adoption of blockchain and fintech means losing their clients. Though some, like Mastercard, who has been partnering with other payment companies, are redesigning to tag along the shift, others are still stuck in their costly traditional system, and it’s beginning to tank their customer-base.
The financial industry was designed to rob people, they do little but cash out big. From New York to Lagos, from Hong Kong to London, the story is the same, they have been milking people for generations.
Nobody has explained why money transfers should cost a lot, while social media platforms operate freemium; financial transactions should cost a fraction, if not completely free.
Crypto to the rescue…