• Sectors we work in banner(2)

    Quick Reads

What does Amazon’s ban of Visa Credit Cards mean for UK consumers?

What’s happening?

If you are an Amazon customer with a UK Visa credit card linked to your Amazon account, you may have woken up on Wednesday 17th November 2021 to a rather surprising email. Amazon informed its customers that it will be blocking the use of UK Visa credit cards on its platform from 19 January 2022.

The BBC has reported that Amazon is also offering £20 for Prime customers to switch away from Visa to an alternative payment method, and £10 for other customers.

Visa card scheme credit cards are used by a number of the UK’s largest credit card providers, including Barclaycard and HSBC. This ban is likely to be disappointing news to customers of those banks who do not currently have an alternative credit card on the Mastercard or American Express card schemes to use online at Amazon.

The ban does not apply to Visa debit cards which will still be accepted on the Amazon platform.

Why is the change happening?

Amazon has blamed the change in its card acceptance policy on the increasing cost of payment processing fees charged by Visa, claiming Visa’s fees are excessive and an obstacle to low prices for consumers.

In response, Visa has claimed that its charges are competitive, have a minimal effect on prices and that nobody wins when choice is restricted.

Are there any legal implications for consumers?

If you currently have a UK Visa credit card registered on Amazon, and do not have an alternative Mastercard or American Express credit card to replace it with from 19 January 2022 onwards, you will likely be forced to update your payment card to your bank debit card or stop using Amazon altogether.

From a legal perspective, switching from a credit card to a debit card means large purchases over £100 on Amazon will no longer benefit from protection under section 75 of the Consumer Credit Act 1974. Section 75 protection means your credit card provider must take the same responsibility as the retailer if things go wrong for any purchases between £100 and £30,000. If the goods fail to arrive, or the merchant goes bust, you are protected by your credit card provider up to the full value of the purchase.

Are there any competition issues?

This is a more difficult question to answer. Amazon has blamed the decision on commercial considerations (i.e. increased fees), which could well be above board and fair. However, some may look at the fact that Amazon has its own UK credit card which operates on the Mastercard card scheme and the reports that it is actively incentivising customers to use payment methods other than Visa as evidence that it is unfairly “favouring its own”.

Will the ban actually come into effect?

It is possible that this very public commercial dispute will blow over if the two sides can agree some form of settlement prior to the 19 January 2022 start date. The choice of the January date is an interesting one as it falls at the end of the busiest period of the year for UK credit card spend as consumers make Christmas and New Year purchases.

For the time being, Amazon customers with Visa credit cards will be along for the ride as they await developments with interest.

Kevin Peachey, BBC Personal Finance Correspondent Quote: “This row between two corporate titans is now being played out in full view of their customers.”

Our thinking

  • James Walton writes for the Evening Standard on whether the Government can expect a return on its new National Wealth Fund

    James Walton

    In the Press

  • IFA Magazine quotes James Walton on the launch of a new National Wealth Fund

    James Walton

    In the Press

  • Retailers and consumer credit – the need for regular check ups

    Richard Ellis

    Quick Reads

  • Re UKCloud: The importance of exercising control over a fixed charge asset

    Cara Whiffin

    Insights

  • Consumer Duty Board Report

    Richard Ellis

    Insights

  • Business Green quotes Caroline Greenwell on the FCA's new sustainability disclosure regime

    Caroline Greenwell

    In the Press

  • FT Ignites Europe quotes Anne-Marie Balfour on working hours and potential disputes

    Anne-Marie Balfour

    In the Press

  • DIFC Courts Release 2023 Annual Report

    Peter Smith

    Quick Reads

  • Caroline Greenwell writes for The Law Society Gazette on the LIBOR scandal

    Caroline Greenwell

    In the Press

  • Portfolio Adviser quotes Richard Ellis on the FCA's first public findings against former fund manager Neil Woodford

    Richard Ellis

    In the Press

  • Daniel Sullivan writes for Law360 on hundreds of 'rogue filings' being lodged via Companies House and advice for affected banks

    Daniel Sullivan

    In the Press

  • Charles Russell Speechlys grows its rankings in The Legal 500 EMEA directory

    Frédéric Jeannin

    News

  • There is a new tax law in town – but it’s probably not what you think

    Sarah Kadhum

    Quick Reads

  • Digital assets consultation by the Law Commission

    Cheryl Tham

    Insights

  • Charles Russell Speechlys continues to grow its Financial Services Regulation & Funds offering with the appointment of Jeremy Bell

    William Garner

    News

  • FT Adviser quotes Richard Ellis on industry pushback to FCA plans to name firms under investigation

    Richard Ellis

    In the Press

  • Charles Russell Speechlys hosts international arbitration event in Dubai

    Peter Smith

    Quick Reads

  • Charlie Ring and Ross Youngs write for FT Adviser on where wealth managers should look to for their own financial advice

    Charlie Ring

    In the Press

  • Take-aways for UK firms from ESMA’s consultation on reverse solicitation

    Cheryl Tham

    Insights

  • FCA Authorisation: Do I need to be FCA-regulated?

    Richard Ellis

    Insights

Back to top