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Amazon and Visa differed on interchange fees charged on merchants by the latter for processing digital transactions between the UK and the European Union.
“We are working closely with Visa on a potential solution that will enable customers to continue using their Visa credit cards on Amazon.co.uk,” an Amazon spokesperson told CNBC by email.
The two behemoths disagreed on the fees charged on each transaction, which culminated in Amazon’s decision to stop accepting U.K-issued Visa credit cards as from January 19, 2022. However, with the two organizations working on a possible solution, Amazon shoppers can rest assured their UK-based Visa credit cards will be valid.
“Amazon customers can continue to use Visa cards on Amazon.co.uk after January 19 while we work closely together to reach an agreement,” Visa’s spokesperson noted.
Visa shares had gained approximately 0.19% in the after-hours, around $215.07. Amid the huge adoption of electronic payments around the world and positive market fundamentals, analysts are unanimous on the possible bull market. Thereby a Buy rating from 37 ratings according to a survey conducted by MarketWatch.
Shares of the e-commerce giant on the other hand traded 0.12% below last Friday’s close, around $3,239. Similarly, analysts are optimistic the company will deliver gains, thus a Buy rating from 52 ratings according to MarketWatch.
Notably, Amazon and Visa differed on interchange fees charged on merchants by the latter for processing digital transactions between the UK and the European Union.
What It Means for Amazon and Visa
The e-commerce company has seen its market cap skyrocket to almost $2 trillion over the pandemic period. At the time of publication, the company had a market capitalization of approximately $1.64 trillion.
The company has had to re-negotiate its global relations-following notable geopolitical challenges. For the UK case, Amazon and other tech companies had to adhere to new rules that came forth with Brexit.
Notably, an EU cap on interchange fees no longer applies in the UK, thereby allowing card networks to raise their charges. Moreover, other companies like Mastercard Inc (NYSE: MA) have also increased their UK-EU interchange fees.
Amazon, however, was considerate with its customers who needed to shop during The festive period. The future for both companies lies in the ability to negotiate the new rules set by both the European market and the United Kingdom. Meanwhile, Amazon UK customers can continue to use their UK-issued Visa credit cards.