Amazon has announced a U-turn on plans to block visa credit card payments for customers in the UK.

In December, the ecommerce giant revealed it planned to restrict the use of Visa credit cards from 19th January, prompting concerns among consumers and a dispute between the two organisations.

In a statement to customers today, Amazon confirmed it intends to drop the plans, adding that the two companies are collaborating to reach an agreement.

“The expected change regarding the use of Visa credit cards on Amazon.co.uk will no longer take place on January 19,” the statement read.

“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,” it added.

Both companies are yet to confirm whether the U-turn is permanent. However, it does mean UK Visa customers can continue using Amazon after the original deadline.

The Amazon-Visa Payments dispute – what happened?

The rift between Amazon and Visa emerged last year when Amazon announced the policy change.

Initially, the US tech giant cited high processing fees for payments for the changes.

In October, Visa increased fees on transactions made by Brit shoppers and EU businesses from 0.3% to 1.5%.

Amazon claimed this increase was an “obstacle” for the company and negatively impacted consumers. Visa responded by accusing Amazon of inhibiting consumer choice.

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“When consumer choice is limited, nobody wins,” the payment provider said.

Before Britain exited the European Union, transactions between UK consumers and EU-based businesses were capped by EU legislation, but the cap is longer in place.

Visa isn’t alone in hiking transaction fees. Mastercard, with which Amazon maintains a close working relationship, also announced increases.

Consumer backlash

Polls conducted in the wake of the announcement revealed British consumers were frustrated at the ecommerce giant.

A study from OnePoll found that 13% of Amazon customers in the UK – the equivalent of six million users – intended to stop buying products from the site or reduce the frequency of shopping via the platform.

This potential backlash could’ve cost Amazon up to $1.4 billion in revenue, according to the study.

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