Very few companies could make such a daring move to reject Visa credit cards entirely. This shift speaks to Amazon’s unique market position, a true domineer of the ecommerce space.

Neil Smith

Head of strategic partnerships, EMEA and APAC regions, Forter

Remember the days when Amazon was a bookseller? Now, its global domination is undeniable. Amazon has grown exponentially since its founding in 1994. So has its influence on the landscape of the business world we see today.

In November of last year, Amazon announced that it would no longer accept Visa credit card payments in the United Kingdom as of Jan. 19. The online retailer explained that this decision was “due to the high fees Visa charges for credit card transactions,” the online retailer explained. Amazon executed similar actions with the same sentiment in other parts of the world. Amazon imposed a surcharge on Visa credit cards in Singapore and Australia and offered users twenty pounds ($27) off their next purchase to update their default payment method.

Very few companies could make such a daring move to reject Visa credit cards entirely. In recent history, Walmart Canada and Kroger attempted it. However, each corporation resumed accepting Visa payments shortly after the initial drop.

Now, as uncertainty between Amazon and Visa rises, there has been a discussion about making the same move in America. This approach is contrary to what most companies are currently doing—offering customers flexibility by working with as many payment options as possible. Some companies have even developed “buy now, pay later” plans to keep up with competition and gain favor with consumers.


This shift speaks to Amazon’s unique market position, a true domineer of the ecommerce space. To deny an entire company’s common payment method indicates a change in power within the industry, as retailers who compete directly with Amazon find it challenging to follow in the ecommerce giant’s footsteps.

Consumers will comply

A small number of Visa-using consumers in the U.K. who are affected may respond to the change by taking their business to other merchants. Thus, those smaller retailers may experience a short-term benefit from the small influx of new customers who insist on paying with Visa credit cards. It is more likely that the vast majority of consumers who enjoy the convenience of shopping with Amazon will simply do as the ecommerce giant asks and switch to another payment method. And it is likely the small influx for those smaller shops will be significantly overshadowed by Amazon’s increased profitability.

By paying much lower card processing fees, Amazon can increase profit margins and will therefore be able to offer deeper discounts to customers, increasing its sales and its negotiating power with suppliers and manufacturers. Amazon’s increased profitability enables them to continue to buy market share in the big picture. As the split takes effect, it could contribute to Amazon’s significant market advantage and make it harder for other online retailers in the U.K. (and anywhere this happens) to compete.

Amazon’s long-term strategy

What does this indicate about the future of payments? How do these moves foreshadow Amazon’s long-term strategy?

At this time, Amazon is not exclusively retail and is considered a competitor across a wide range of finance and commerce industries. By rejecting Visa, Amazon may make an example out of them to the other big credit card companies. In the future, Amazon can use this as leverage to pressure other credit card companies and suppliers to fold to its preferred rates. Amazon is unlike any other retailer in the market space today, meaning its power could eventually influence or even dictate what credit cards and financial services consumers are willing to use.


To see Amazon as an owner of the complete commerce process may reveal the primary motivations behind the decision to no longer accept Visa as payments. With fewer payment choices, Amazon will be able to convert many new customers to its Amazon Platinum Mastercard, which offers shoppers the ability to accrue rewards quicker by shopping with Amazon. Both effects are likely to result in Amazon becoming even more deeply embedded in its customer relationships and driving further brand loyalty.

In speculation, it seems as though Amazon and Visa could have resolved the feud if Visa offered the rate Amazon wanted. Visa may feel additional pain from losing out on processing fees from Amazon’s massive transaction volumes in the coming months. The fact that Amazon has already gone public to consumers with this announcement suggests that conversations at the negotiating table have already failed. What this means for the U.K. payments industry and the rest of the world will soon be uncovered.

Forter is a fraud prevention technology provider.