Amazon has reached an agreement with Visa that would allow it to continue accepting Visa credit card payments, putting an end to a dispute about escalating payment rates.
"We recently reached a global agreement with Visa that permits all customers to use their Visa credit cards in our stores," Amazon announced Thursday in an emailed statement.
Amazon noted that the company remains committed to providing consumers with "a convenient and customizable payment experience."
Earlier this year, the e-commerce giant announced that it will continue to accept Visa credit cards issued in the United Kingdom on its British website, adding that it was negotiating with Visa to resolve a payment charge disagreement.
Amazon said it will discontinue charging Visa users additional fees in Singapore and Australia.
According to several observers at the time, the move could have been a negotiation technique by Amazon, pushing certain consumers toward Mastercard or American Express.
Bloomberg News has disclosed that Amazon explored transferring its popular co-branded credit card to Mastercard Inc.
According to sources with knowledge of the matter, the Amazon card is one of the largest co-branded portfolios in the business, and the company utilized negotiations to renew the deal to win better terms from Visa.
Retailers have long grumbled about the fees they incur when a customer swipes their card at the register.
On Sept. 15, last year, Amazon implemented a 0.5% extra to Visa credit card transactions on its Singapore website. Singapore was the first country to impose this levy on consumers.
While it may seem insignificant, it adds up: merchants will spend a stunning $110 billion on card processing costs in 2020 alone.
Visa and Mastercard provide the technology that enables payments to be made between merchants and financial institutions. They earn money by charging transaction fees to card issuers and merchants.
While these fees have no direct impact on the prices we pay as consumers, they do increase a retailer's basic costs, which may eventually be reflected in increased prices.
Additionally, they influence the payment provider that a retailer or financial institution selects, which can affect where we can use our debit and credit cards.
Meanwhile, Visa frequently strikes special price agreements with the largest banks and merchants to entice them to send greater volume across its network.
The company allotted $8.4 billion for such incentives in fiscal 2021, a 26% increase over the previous year.
