The news is quite unbelievable: Amazon has announced that from next year it will no longer accept payments with Visa credit cards issued in the UK due to increased fees.
Amazon stops accepting Visa UK cards
Specifically, the problem only concerns Visa’s interchange fees in the UK, which have risen to 1.5% compared to 0.3% in the EU, for example. The e-commerce company will offer a €20 discount to customers who use an alternative payment method, such as Amazon-branded credit cards from American Express and Mastercard.
The exclusion does not affect Visa credit cards issued outside the UK, nor Visa debit cards.
After the publication of this news, Visa’s stock on Wall Street fell by 5%, back to the levels of eight months ago.
A sign of things to come
Some believe that this could only be a sign of a wider and deeper change in online payments.
New technologies are undoubtedly dramatically lowering transaction fees. For example, a BTC payment with the Lightning Network not only has no costs as a percentage of the amount paid but has costs that rarely exceed one cent.
On a payment worth $100, the commission costs are less than 0.01% and are paid by the buyer and not the seller.
Some analysts argue that these developments collectively are a clear sign that the entire online payment ecosystem is undergoing rapid change in the e-commerce sector lately.
E-commerce and cryptocurrencies
Amazon does not yet support cryptocurrency payments, and current systems for paying in cryptocurrencies on Amazon using crypto-powered debit cards still have very high fees for both sellers and buyers. Cryptocurrency payments with PayPal also suffer from similar problems.
However, this does not apply to e-commerce sites that accept direct crypto payments, even though they may then have to pay fees on crypto to fiat exchanges.
Even though not many e-commerce sites accept direct payments in crypto yet, there are already some that take advantage of e.g. cashback or reward programmes in cryptocurrencies, e.g. through intermediaries such as Mode, which allows cashback in crypto from e.g. Ocado, Homebase and Boots.
It is undeniable that a profound change is taking place in the online payment industry, which could turn into a revolution when cryptocurrencies become widely used as a direct payment method.