American Express partner with Amazon though, they have Amazon branded AMEX cards, so I expect there is benefit to both. I do think this payment space is both very strong, but also in a slight state of flux as I still think it could be disrupted, I don’t have a horse in this race anymore in terms of Visa/Mastercard/Amex/Paypal etc… (I own Amazon though).
I expect they will come to a deal and it wont happen.
Because cards’ fees were capped in UK due to EU legislation, UK leaved the EU, so card issuers became free to increase their fees.
Now UK is trying to “return” to the previous EU legislation, so it can be competitive. But I’m wondering why UK wants to negotiate with EU, if the problem is with Visa, an US company. After all, it seems that there were some good things of being part of a economic bloc as the EU.
Since Brexit, an EU-enforced cap on fees charged by card issuers is no longer in place in the UK.
The move by Amazon, earlier reported by Bloomberg News, has prompted the UK Trade Commission to call on the government to improve the UK-EU trade agreement and analysts to call on British regulators to look into the fees in the credit card market.
“If Amazon can’t make it work, with all their resources and ability to navigate legislation to avoid costs, then small businesses have no chance and so the government must improve the UK-EU trade and cooperation agreement to keep British businesses competitive,” said Tamara Cincik from UK Trade and Business Commission
It just goes to show some regulations are good, some not so good for consumers. In reverse, the UK has banned PFOF since 2012, and its still being considered in the EU, although France and Germany now pushing for it.
Looking into the Amazon thing more, not many people have Visa Credit Cards. Given that there is a bit of a monopoly between Visa/MasterCard/Amex/Paypal, perhaps relaxing the restrictions on charging structures, would allow new players an opportunity to the market.
With more competition in the market, perhaps things will go the other way and be better for consumers.
All depends on your view, I’m probably looking through rose tinted glasses on the competition point.
There isn’t competition between the card payment schemes, it’s an oligopoly. The major players (btw, the US players, Visa/Mastercard mainly and also Amex in a smaller scale) can between themselves slice and control the card payments market. The only entity that was able to more or less control them is EU, that created legislation that capped their fees.
Curiously most European Fintechs partnered with Mastercard for their cards, including many UK Fintechs, Wise (ex-Transferwise), Revolut (also have Visa cards), Starling, Monzo, Monese, Curve, N26, bunq, Paypal, Neteller.
Amazon charge extra for using Visa in Australia and Singapore as well.
In this case, it’s because Amazon UK sales are booked in Luxembourg not the UK and Amazon doesn’t want to pay increased fees that Visa has announced.
Ironically, MasterCard announced the same changes before Visa did.
There are quite a lot in of UK Visa credit cards: Barclaycard, Nationwide, Jaja, Tymit, Coop/Smile, First Direct, Vanquis and most HSBC UK credit cards for starters.
I own a credit card and don’t use it to live on credit.
When shopping you can get extra protection using a credit card(Section 75), and I also collect bonuses as well. As long as you pay the card off in full, the bonuses are effectively free money.