Visa to drop surcharges for Amazon customers in Australia, Singapore
A new agreement between Amazon and Visa over its credit cards and credit card fees has global ramifications.
Amazon customers from the United Kingdom will now be able to make purchases with Visa credit cards, while those in Australia and Singapore will be able to make purchases with the cards without having to pay a 0.5% surcharge, reports CNBC.
The two companies have disagreed over fees charged by the credit card company, with Amazon previously planning to stop allowing consumers in the U.K. from making purchases with Visa credit cards.
Amazon backtracked on the plan last month, only two days before it was set to be enacted, as the companies continues to discuss ways to end their dispute over the transaction fees.
“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 spokesperson told CNBC via email Thursday. “Amazon remains committed to offering customers a payment experience that is convenient and offers choice.”
Amazon has been pressuring Visa to lower its credit card fees, with retailers becoming increasingly frustrated with the extra costs that comes with dealing with major credit cards and their market power and sway.
Major credit cards such as Visa — along with Mastercard and American Express — have faced more competition recently with the emergence of “buy now, pay later” fintech companies, which allow consumers to bypass traditional card payment methods.
Known as swipe fees, the transaction charges have long been an area of dispute between businesses, customers, and the financial companies enacting them.
Roger De’Ath, a country manager at U.K.-based fintech firm TrueLayer, told CNBC the agreement between Visa and Amazon shows the need to develop new ways to make payments.
“For too long, cards have been retrofitted into online checkouts, creating an invisible web of hidden costs and unwieldy payment structures that affect the cost base of every single retailer,” De’Ath said to CNBC, in an email.