I believe everyone must have received the news in the past two days that Amazon will stop accepting Visa credit cards. Maybe many friends don’t understand the meaning of this information. The editor is here to organize and interpret it for everyone.
Amazon announced an important decision on November 17th that it will no longer accept credit cards issued by Visa UK from January 19th next year. When a platform refuses to accept a certain payment method, it may be because the risk or cost of the method is too high. In the news, Amazon also gave the reason that the card acceptance fee is too high.
Not only that, Amazon also said it is in talks with several card organizations, including MasterCard, American Express, and Visa, but the talks are only part of a "standard process" to evaluate U.S. co-branded credit cards. Earlier reports said Amazon was considering switching its co-branded credit cards from Visa to MasterCard.
A similar situation occurred as early as 2016, when Walmart Canada gave up supporting Visa credit cards because they could not reach an agreement on fees. The two sides did not reach a settlement until seven months later.
Since 2021, Amazon has made several major policy adjustments on the payment side, including the payment service provider plan for sellers, the addition of a second payment account, and the BNPL buy now pay later service announced in the third quarter, and then the closure of UK Visa credit card acceptance. Each change actually shows Amazon's deployment of risk management, revenue layout and cost control on the payment side. And each change will have a certain impact on sellers.
This news seems to be aimed at the front-end buyers, but it actually reveals more information. Amazon’s dissatisfaction with the transaction costs of Visa cards may lead to banning more buyers from using Visa cards, and even sellers. For example, many sellers currently use credit cards or virtual credit cards to bind Amazon stores as a payment method for store fees or CPC advertising fees. Once the deduction fails, the consequences are very direct. The advertisement will be removed and the store sales will plummet. Even more serious is that the European site account may be reviewed due to multiple deduction failures.
In this case, in order to spread the risk, sellers can prepare a Mastercard credit card or virtual card in advance and add a Mastercard in the Amazon backend payment method to be prepared. Currently, there are several mainstream payment institutions on the market that can provide Mastercard services, and they generally have cash back activities. You can choose the best one.
(Sample of adding a credit card in Amazon backend)
Of course, in addition to this, this policy adjustment for Visa may also have a short-term negative impact on sellers’ sales. Because from the data, as of 2019, the average number of credit cards held by the British was only 1.1, which means that a large part of the population only has one credit card. More importantly, most of them are Visa cards. According to the data released by Statista before Brexit in 2019, Visa has a market share of up to 89% in the UK card market. Therefore, for the majority of sellers, once the policy is implemented, they may suffer a decline in transaction volume from British Visa cardholders in the short term.
(Image source: Statista) In short, since the platform policy is still unclear in the future, it is recommended that everyone apply early and be added as soon as possible to prevent problems before they occur and have a basis for action. Amazon Visa Credit Card |
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