Visa and Amazon have settled their year-long dispute about credit card payments through the e-commerce site.

The two business giants have penned a deal that will see Amazon accept Visa credit cards across all its sites without charging customers extra fees.

The rift between Amazon and Visa began when the e-commerce giant announced policy changes around high processing fees for payments introduced by Visa.

In October 2021, Visa increased fees on transactions made by UK shoppers and EU businesses from 0.3% to 1.5%.

At the time, Amazon said this increase was an “obstacle” and negatively impacted consumers. Visa responded by accusing Amazon of inhibiting consumer choice.

The online retail giant subsequently threatened to halt use of Visa credit cards in the UK, adding that Amazon customers in both Singapore and Australia would have to pay a surcharge for using a Visa credit card to buy products.

However, now that a deal has been struck, Visa cards will now be accepted and the surcharge will be removed from Thursday, 17 February.

Commenting on the news, an Amazon spokesperson said: “We’ve recently reached a global agreement with Visa that allows all customers to continue using their Visa credit cards in our stores.”

Visa added: “This agreement includes the acceptance of Visa at all Amazon stores and sites today, as well as a joint commitment to collaboration on new product and technology initiatives to ensure innovative payment experiences for our customers in the future.”

Before Brexit, fees charged by card issuers between UK consumers and EU firms were capped by EU legislation. This has subsequently been removed as Britain goes it alone.

There was substantial backlash from consumers to the argument between Visa and Amazon as people saw a chance they would be affected by the changes.

A OnePoll study found that around six million Amazon customers intended to stop buying products from the site or reduce the frequency of shopping via the platform.

At the time, Visa accused Amazon of restricting what customers have access to, stating that: “when consumer choice is limited, nobody wins.”

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Commenting on the impact of the penned deal, Siamac Rezaiezadeh, Director of Product Marketing at GoCardless, said it is important we now keep an on the “bigger picture”.

“Businesses are now pushing back against unfavourable terms, ones they historically had little choice but to accept,” Rezaiezadeh said.

“The landscape has now changed dramatically with the rise of BNPL and open banking-enabled payments, both of which are increasingly popular with consumers. This gives businesses a genuine alternative to the card schemes.”

Rezaiezadeh added: “Replacing costly cards is now a viable, and perhaps better, option for every company, particularly as they do more business online — an environment which cards were simply not designed for.

“The continued maturity of innovations like open banking, coupled with business and consumer demand for more ‘digital-first’ payment methods, means that we soon expect to see a shift from ‘card on file’ to ‘account on file’.”

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