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Amazon will continue to accept Visa credit cards after reaching a global deal, just weeks after the retail giant threatened to stop accepting Visa credit cards in the UK. Bloomberg reports that Amazon will also stop charging Visa credit cardholders an extra fee on purchases made in Singapore and Australia.
At the core of the dispute were the payment fees Visa charges Amazon each time a customer makes a purchase with one of its credit cards. In the UK in particular, Visa’s interchange fees on credit cards had risen from 0.3 percent to 1.5 percent after the UK left the European Union and was no longer bound by EU fee limits.
Bloomberg reports that Amazon had considered shifting its lucrative co-branded credit card from Visa to Mastercard to secure better terms. Amazon was reportedly chasing after a similar arrangement to the one struck between Visa and Costco on their co-branded credit card, where Costco was offered a break on all processing fees in exchange for the co-branded partnership.
“We’ve recently reached a global agreement with Visa that allows all customers to continue using their Visa credit cards in our stores,” an Amazon spokesman told Bloomberg. A spokesperson from Visa added that “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.” Both companies declined to comment to CNBC on the exact payment terms of the new agreement.
The dispute between the two giants drew widespread attention last November, when Amazon said it would no longer be accepting payment via Visa credit cards in the UK after January 19th. However, on January 17th, Amazon said it would continue to accept payment via the method after all and that it was “working closely on a potential solution” with Visa.