On a crisp autumn morning in London town, I awoke to an email from someone whom I hate but just can’t quit: Amazon.
The company was writing to notify me of some important news: it will soon stop accepting Visa credit cards for UK payments.
Customers will still be able to use Visa’s debit cards, but the firm’s credit cards are getting dumped on January 19.
Amazon blamed the move on Visa’s high processing fees, but conspiracy theorists suspect something bigger is afoot.
Were Jeff Bezos and his Sun Valley buddies plotting a financial revolution? Did Amazon need to save some dough to colonize the cosmos?
I put on my tinfoil hat, rewatched JFK, and called up my pals in QAnon to find out what was up.
1. Amazon plans to crush payment providers
Payment processing firms are deeply integrated into our financial system, but their position could become less secure.
“Many merchants are looking for alternative ways to process customers’ payments, especially in light of the high fees charged by some providers, like Visa and Mastercard,” said James Hickman, the chief commercial officer at Ecospend, a UK fintech. “The decision is significant, however, in that it sets a precedent for many others to follow suit.”
Developments in Open Banking could allow Amazon to bypass card firms and take payments directly from customers. That could save Bezos some cash to splash on ego trips to space.
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2. This is all because of Brexit
Visa’s charges have risen since the UK left the European Union. The EU had capped cross-border interchange fees at 0.3% for credit cards, but those rules have disappeared since Brexit.
In March, the Financial Times repoted that Visa planned to increase its interchange fees to 1.5%.
Martin Lewis, a financial journalist and founder of MoneySavingExpert.com, said Visa’s price-hike triggered Amazon’s ban.
Amazon to stop allowing people to use Visa credit cards from Jan (Visa debit, mastecard & amex still fine)
It’s because Visa is increasing transaction rates now the EU cap no longer applies (post Brexit).
It’s a possible negotiating tactic for Amazon to gets its fees reduced.
— Martin Lewis (@MartinSLewis) November 17, 2021
Amazon has denied that Brexit was the specific cause of the dispute. Indeed, the company has also introduced new charges for Visa credit cards in Australia and Singapore. However, the increased costs in the UK could have deepened the feud.
3. Bezos is in bed with Mastercard
Mastercard has also increased its UK-EU interchange fees, but nonetheless escaped the credit card ban.
While Amazon currently uses MasterCard for its own credit card in the UK, the company says this relationship has nothing to do with the Visa feud.
In the wake of the announcement, however, reports emerged that Amazon could shift its co-brand credit card from Visa to Mastercard. Online searches for Mastercard, meanwhile, increased by 1,300%.
Perhaps Mohammed bin Salman isn’t the only person with Jeff Bezos’ dick pics.
4. It’s just a negotiation tactic
Amazon’s move could be an attempt to negotiate newer fees.
The move has already taken a chunk out of Visa’s stock price. The payments firm may want to negotiate before Amazon’s enormous market share causes further damage. The e-commerce giant’s January 22 deadline gives them some time to make a deal.
The outcome could be lower fees or more users for Amazon’s own payment system. Visa and its customers may suffer, but Bezos’ world domination plans could go from strength to strength. Congratulations, Jeff.