Amazon to stop accepting UK Visa credit cards
bloomberg.com
bloomberg.com
Visa have put up UK-EU interchange fees (as post Brexit they're not covered by the cap)
But it affects Amazon because when you buy something from Amazon UK, you're billed by Amazon Luxembourg and Amazon UK then fulfil
Amazon's tax avoidance strategy is part of the reason the charge has increased for them.
If they billed from the UK it wouldn't affect them
Not really due to Brexit. Nice attempt at pushing your agenda though.
As the poster said - it is the gift that keeps on giving.
The UK is basically Mexico now. You saw how well their trade negotiations with the EU went; expect the US and China to walk all over them too.
The main power lever the UK has at this point on the global stage is the fact that its banks orchestrate and facilitate global money laundering at the intersection of corporations, organized crime and autocratic regimes. And is rapidly losing that role to crypto.
More like under half billion (~447.0 million).
>The UK is basically Mexico now
Except it has a much bigger more advanced economy and a ton of other differences but carry on with the hyperbole.
> The Netherlands and Germany are filling that role ...
Just recently Royal Dutch Shell just switched headquarters to UK from NL, maybe there are some advantages then.
> Was doing it off the top of my head
Any more facts you want to come up with from the top of your head? I think I'll just disregard the rest of your facts then.
I expect they will try to extend their advantage in the coming years by using "selective legislation" to encourage multinational corporations to re-home to the UK. See: Unilever and Shell. This is only the beginning in my view.
Trade deals are about power and taking the one for the EU as example because we (UK) need access to their markets more than they need access to ours then they always had the leverage
It'll be the same with US, China etc.
Even in the trade deals we've achieved with countries like New Zealand we've not been able to take advantage of being a larger economy and we've allowed lamb imports just to get a deal
It makes sense in theory, however, if I look at the actual changes where UK has now diverged from EU laws like this one, those changes seem bad for the UK public (in order to benefit e.g. banks), and it turns out this freedom for politicians to do whatever they want somehow results in even less accountability to the interests of British public than the unelected unaccountable Brussels officials cut off by Brexit. Sad.
Schools near me in (not UK) are struggling to feed students lunch because the companies they had contracted to deliver their food dont have enough drivers. One company a state over just cancelled their contract with nearly 60 rural schools because they simply aren't able to deliver.
As far as I've heard, the EU doesn't have these problems. It's only the UK. (I can't speak all the languages, but I asked friends from Denmark, Germany, Portugal, Spain and Italy if they'd seen reports of shortages in supermarkets and restaurants, but none have.)
The American problem looks fixable with vaccination, testing etc. A lot of drivers in Britain left the country, and there isn't a short-term fix.
[1] https://www.nytimes.com/2021/09/27/us/politics/schools-labor...
For example, https://www.ft.com/content/e8ca2a08-308c-4324-8ed2-d788b074a...
Driver shortages have been reported across the EU, but as far as I'm aware, food and fuel shortages are only in the UK.
e.g. https://trans.info/en/there-s-a-europe-wide-hgv-driver-short...
There's none of that in France, at least not for every day consumer goods. The prices of energy however have skyrocketed and semi-conductors are as lacking as anywhere else.
There's a shortage all across Europe, but as far as I have heard it's only in the UK where it's sufficient to cause problems with food distribution.
(Natural gas prices have reduced food production in the Netherlands: https://www.bloomberg.com/news/articles/2021-09-30/your-toma... but would we have seen the result of that yet?)
> The great British public still have their heads in the sand in the wake of lorry driver shortages, nursing staff shortages and doctor shortages.
Restaurants open or closed is a luxury; /care
Some food not available, might be a luxury, but the vids I've seen were quite shocking.
So we don't actually have a choice, our politics are as rigged as American politics. A small cabal pick the two PM choices, and we have to pick between bad or worse.
The first-past-the-post electoral system has no defense against well-funded interests essentially buying all the candidates.
One could wonder if the substandard electoral system exists purely because of this flaw (or feature for the few powerful).
I don't think different systems differ so much as far as being rigged goes, it's just the rigging that changes. In the end, power is always in the process of cooptation.
The dynamics are same prior to runoff because the plurality electoral system gives no representation to the majority that didn't vote for the winner (almost a given since there will be >2 candidates).
You'd need proportional representation and/or an electoral system like Borda,RCV,Star or instant runoff to significantly proof against spoiler mechanics that the wealthy can exploit.
Again, none of these measures guarantees against money corrupting electoral processes, just makes it more costly and unsure that any given corruptive effort pays off.
Britain has sold off vast swathes of housing stock and is privatising ever more healthcare delivery. Zero-hour contracts are a thing nowadays. Industries that most countries run as a public service have been privatised.
Collectivism has been replaced with neoliberalism. Our country has swung miles to the right both socially and fiscally. But yes, you can be out and brown.
But a curious note from that article: "The move to increase interchange fees will bring it into line with MasterCard, its rival payments group, which announced a similar move in January."
So why is Amazon restricting customers with Visa and not MasterCard?
Can't be the UK-EU Post-Brexit policy alone.
Costco ran into this with American Express, though in retrospect the move to Visa seems like a worse move (more non-Costco Visa cards in circulation).
I just want to stress that we both can only speculate.
Could you expand on it a worse move for Costco? I thought it was great they moved to Visa because majority of Americans does not have Amex for credit card. The only way we can use our Visa card is through debit card only. So by moving to Visa (they have largest cardholders than Amex/Discover in America), Costco gained more consumers so the consumers can use their Visa credit card without resorting to debit card. It helps me a lot because I don't and never have Amex. Amex don't have a lot of retailers coverage (they used to be popular back in the 80s/90s), same for Discover. I recalled Amex have higher transaction fees, I believe higher than Discover, and Amex explicitly disallow passing the fee to the consumers. So made sense retailers prefer Visa/MC because they have lower transaction fees. This is what I remember back in the day when Costco made this announcement.
They now accept any Mastercard. But most Canadians probably pay with Interac debit anyway.
You can pay with Visa online, but if you return to a store they hand you cash. It's really weird how anti-Visa Costco is in Canada.
I’ve been a CostCo member since at least 2006. I really liked the fact that they gave me an AmEx, but I didn’t really use it for anything other than CostCo.
About a year later, I discovered that you could use any major credit card to debit card to pay for your goods at CostCo, so long as you identified yourself with your CostCo branded card. I stopped using the CostCo branded card soon thereafter.
After they switched to Visa, I stopped going to CostCo pretty much entirely.
It wasn’t until the pandemic started that I went back to CostCo on a couple of occasions to buy some things that were not available elsewhere.
I’ve got enough Visa and MasterCards. I don’t need any more.
Not at all. These exclusive acceptance deals do usually have lower-than-otherwise rates for all cards from that issuer, though perhaps not as low as the co-branded card.
Think about it - if Costco had the same fees from a normal (not co-branded) Visa card as they did from a normal MasterCard, what incentive do they have to disallow normal MasterCards but still allow normal Visa cards?
I don't think this is the end of it either, it smells like a negotiation threat. Visa have a larger market share overall (80%, including debit cards [1]) but Mastercard leads in credit cards. Amex has always been fairly niche because it's not accepted everywhere.
[1] https://www.statista.com/statistics/1116580/payment-card-sch...
> Visa was the largest card issuer in Ireland and the United Kingdom, with market shares of over 80 percent in both countries. (from 2019)
Reading further it does look like most Visa cards are debit cards and Mastercard has the lead in credit cards.
PS: Comment updated after some research.
Re: Mastercard
It seems that Mastercard is more widespread among "hot" banking startups, ie I can create virtual debit Mastercards on Revolut and Monzo
They were definitely first in this space but Revolut has issued Visa's (in some cases) for a while now, and for instance Wise has recently switched from MasterCard to Visa entirely.
All the major banks apart from Barclays and HSBC use Mastercard for credit
(MC taking less of a cut of the final fees then Visa, so the banks getting a higher precentage of the fees then they would have sticking with Visa. Lets say MC gave away 5% of their cut to the banks, keeping 95% of the your slice of the pie when you are processing more pies is more than 100% of your slice of fewer pies if you get what I mean).
99% of debit cards are Visa, and most people buying stuff on Amazon would be using a debit card, folks only really use credit cards for large purchases and things like travel, here.
Even when it comes to credit cards, I would say Mastercard has like a large chunk - like 80% in terms of institutions (but who knows in terms of actual customers), I would say.
Barclays and HSBC are the only majors that do Visa as far as I know. And Vanquis which is a junky one for people with bad credit.
The other majors like Lloyds, TSB, Bank Of Scotland, Halifax, Natwest, RBS, are all Mastercard. Same with most smaller banks like Virgin and CapitalOne, and store branded ones like Sainsburys/M&S/Tesco, too, as well as the remainder of the popular bad-credit cards like Ocean, and Aqua. Mastercard.
Most people in the uk chase points and credit cards have much better points and bonus' than debits.
Huh? I'm in the UK, have been an Amazon customer for over 20 years and have always used a credit card for everything. I didn't even know you could use a debit card, and can't see any reason you'd want to. Paid off in full every month, better consumer protection, what's not to like?
Well, the predatory business model, for one. The reason your credit card company can offer you "better consumer protection" and other benefits is because they count on a percentage of people not paying off their debt in time (and thus making more money out of them).
Also, I personally wouldn't want "better consumer protection" to be mediated by a private company. That should just be the default.
(Although the time my debit card did get stolen somehow, my bank did refund out of goodwill presmably becuase they didn't want to lose a customer).
https://www.which.co.uk/consumer-rights/regulation/section-7...
In bits of Europe where it's allowed (like here in Denmark), it's not unusual for shops to add a percentage to the total for payments by local credit card, business credit card and/or foreign credit card. I haven't yet seen a shop with a different price for cash vs debit cards.
The appeal of credit cards is higher volume - more purchases because people can put it on credit, it’s more convenient, etc. That’s why you’ll see even roadside fruit stands offer credit card payments.
Plus stores are in competition with each other (to varying degrees). Some will choose to absorb the entire 2% or a part of it since, in their mind, it’s a net positive trade off.
It’s like saying a 5% increase in property taxes are just passed through as a rent increase. It all depends on the market. The right answer is something between 0-100% is passed through.
You’re confused - in the UK the better consumer protection with a credit card is the law. On debit cards it’s at their discretion.
Nothing to pay off, you're spending your own money, can't be overcharged, can't go below zero, if someone leaks your spending card they can't touch the majority of your money, no scummy business practices.
Never owned a credit card, don't have the slightest wish to do so.
What do you mean debit card for receiving money? In what sense?
>> Automated payment from the 1st one to the 2nd one
Again, I have absolutely no idea what you mean by that. Payment from a debit card to a debit card? What?
Seems like a lot of work to do what CCs do automatically. I guess the upside is that crazy spending is impossible (well, if you make sure to forbid negative balances on the spending account) and it's impossible to accrue interest.
I'm unaware of a UK bank that will let you do this, so...
e.g. a train ticket purchase from a guard using a mobile terminal
they were very easy to spot as they didn't have the raised digits (for the imprinting machine... old fashioned offline transaction)
now they're coming back again, but still not super common
Monzo's own help pages explicitly state that your balance can go into the negative, because offline debit card payments will not be rejected. They'll also gladly take you into the negative if you owe them money (e.g. through a Monzo Plus or Premium sub, or use their Flex service).
Search Monzo help for "Unarranged Overdrafts".
As far as I'm aware, there is no UK bank that will guarantee they will reject all payments and never let you go into a negative balance on a debit card transaction. This is also a profit centre for them, so there's little motivation to actually do so.
https://monzo.com/help/overdrafts-loans/unauthorised-overdra...
Keep your primary account for getting paid, and for covering bills, then load up the second account with play money for the month.
I know a few people who do this.
I just use an AmEx account but it's a little frustrating that you can't set a spending limit on the card.
I have the majority of my net worth invested at one of my brokers and I tend to hold minimal cash in my bank account...better to be invested than hold cash these days.
You now have perks, points, insurance, consumer protection and still zero worries.
https://www.americanexpress.com/uk/credit-cards/all-cards/?i...
> I see no real reason why to use Amex over Visa or Master/Maestro
Cashback/rewards, and it's accepted on Amazon in the UK after this year is a really good reason to use it over Visa at least. Maestro is non-existant in the UK. Maybe mastercard is a better choice, but I carry two cards _anyway_ , so one might as well be an Amex, and the second should be a mastercard?
> Majority of hotels around Europe don't accept it, same with restaurants, small business, shops
I completely disagree. Almost every restaurant, hotel, cafe takes it. All major airlines accept them, the major train operators accept them, the major hotel booking sites and airbnb both accept it.
> there is not a single reason to own one in Europe, even with cashback (cashback to what actually, since i cannot use it anywhere)
Well there is, cashback, and contrary to what you're saying it _is_ usable in europe. You can book a flight with Ryanair, a train on trainline, hire a car via hertz/sixt/europcar, book a stay with airbnb/booking/hotels, and eat out in restaurants and local cafes all with an amex.
Everyone is paying for the perks, since prices are the same for everyone, but only the people with a credit card are getting them.
You're paying for their perks every time you buy with a debit card - it's madness to use debit.
That said, I do get annual cashback of 1% on one of my cards.
I've have some credit card debt, none of it carries any interest. When I buy appliances or furniture I usually take the interest free financing despite having the ability to pay. Why pay a few grand today when you can spread that out interest free for 2 years and let that value appreciate? I would have lost out on tons of money if I had sold investments up front to buy those goods. So instead of getting rid of all that money a year ago, I got 30% gains in the market.
Bizarrely, never owning a credit card will negatively impact your credit rating.
I have to spend everything on a credit card, then when i get home from shopping 45 minutes later go and pay it off using a debt card.
Its so unfriendly for the consumer.
Keeping an eye on my spending and borrowing on a daily basis is now a negative?
I assume you sit in the same camp that thinks i can afford £1400 monthly rent for 5 years but not an £800 mortgage yeah?
You are aware that interest rates have been incredibly low for years? They have to go up to keep a lid on inflation, and the BoE needs to be able to do that without worrying about mortgage borrowers being overstretched.
I had this issue, and had to get a credit card and buy stuff on it for a year... basically without using credit you may not have a credit rating.
I always lose my cards and have to get them replaced, so have been back on just a debit card for a few years now.
I had to get a credit card as mortgage got denied because my credit record didn't exist. Three months after the card, I got approved.
This is despite me earning an extravagant wage relative to my age for over a decade and never missing rent/utilities/council tax.
Bad system.
It isn't that a lack of credit card hurts your credit rating, but that a lack of any credit hurts your credit rating in Canada or the US.
There are other ways to get an initial credit rating than a credit card, although I agree that this is the path most easy, and chosen by many to get that first rating.
The method I employed, was to buy a car and had a parent cosign. I made all the payments, and this was enough to kick start, and give me at good credit rating.
I also didn't say 'you need a credit card to get a good credit score', I said not having one will negatively impact your score. This is 100% correct; Your credit score is made up of various metrics on how you manage debt, one of which is credit cards. You will get a % boost if you have a card that you manage well, whereas without a credit card, you will get no boost at all in that category. Granted, you may make up for it overall in other categories, but in the main, for most people, my statement still stands. Credit scores start at 0, and only improve if you show you can manage debt across multiple products.
Credit bureaus are definitely legislatively controlled here, and court decisions have an effect on them too.
That aside, I didn't say low utilisation, I said no utilisation. This has a good chance of your card being cancelled by the card issuer, which has a negative effect on your credit.
Bottom line is, unless you plan to use the card, there are better methods of increasing your credit score, so it's not a good idea to get one.
Only since then have I actually had anything on my credit report (monthly broadband payment, phone contract, monthly car insurance payment because I didn't want to keep paying the whole 3k up front every year after moving out, etc) and despite that the score has remained unchanged.
In our case, the bank required a savings account containing a 10% deposit in the name of a family member, which is returned to them with interest after 3 years (unless you fall into arrears). ~50% of that money was our own savings and the rest was from parents savings, which allowed us to get on the property ladder with ~1yr less saving and no cost to our families after the 3yr period.
When somebody does a credit check on you they don’t get a score, only a remark on whether that person has done any negative with respect to their credit worthiness. Thus there is really only the negatives which count.
Credit reference agencies instead report credit history.
The difference is a subtle but very important one, as it allows companies to assess your individual circumstances, rather than base decisions on an arbitrary score.
The above misunderstanding is so commonplace that the Redit UKPersoanlFinace sub had (has?) a bot explaining this on every UK post mentioning 'credit score'. Here "credit scores" are instead a marketing gimmick launched by credit reference agencies to get consumers to subscribe to monitoring services. The 'score' they give is meaningless.
https://blog.moneysavingexpert.com/2021/06/martin-lewis-cred...
By the same logic credit scores don’t exist in the US either. It’s just an approximation, your bank still makes their own decisions.
https://www.which.co.uk/money/mortgages-and-property/mortgag...
Neither are truly unsecured. It just takes longer than an outright repossession because it takes two or three court claims instead of just one.
The debt collection industry relies on this, and regularly forces sales of property to pay back CC and other debts.
So CCs are disastrous for people who can't pay their debts. Not only are the interest rates extortionate, but for lenders they're almost as safe as a secured loan. And because of the high rates they can be considerably more profitable.
But it's true that in the era of negative interest rates, only silly people don't owe money.
Not going into debt unnecessarily is a great thing, but it's not a data point in your favour, it's the absence of a data point.
If you got approved for $40k, there's something else funny going on.
I own a credit card, as you get additional consumer protections using a credit card rather than a debit card in the UK.
Pay it off in full every month. No problem.
Some banks offer similar things on debit cards, but it's always at the banks discretion rather than required by law.
Never paid a penny in fees or interest in over 15 years.... and an annual statement of fees (issued by law) informs me of this fact each year.
Indeed if say an IT problem occurs and they can't do that transfer under UK law they eat the fees incurred. "The customer must be made whole".
As to fees, the merchant doesn't have to accept cards, as we see with Amazon, if they don't like the fees. Why should ordinary consumers care? When we were part of the EU the cards couldn't charge excessive fees, now Brexit allowed them to unlock this potential source of profit.
...and can't get a mortgage and buy a house because you have no credit score.
It is possible some people could have so little credit history that having a card for a while might be beneficial. I don't know enough about the system to be sure, so maybe I was being a bit flippant, for which I apologise.
If you have proof of income you're going 90% of the distance.
No idea where the card is now, but the credit systems seemed to become aware of me after that.
I can’t even begin to imagine how you could see this as an advantage. It’s really not.
I write 'real' since most of the FinTechs like Revolut, N26 etc often issue debit cards that may fail in exactly that situation. It doesn't help if your account is flush with 10k USD and a car rental could easily block 2k for claims on your debit card, some will just not accept Revolut & co. Thus I am always forced to carry an emergency backup credit card from a major bank just to be on the safe side...
Very much looking forward to the day some other means of international payment (crypto?) will be generally accepted.
Banks and debit providers also do ID checks, as required by law, but don't check anywhere near as hard, since there is no way to steal money from the bank if your account can't go negative.
In the UK, it's really hard to get a bank account where they'll do that. Instead they'll pay it, call it an "unauthorised overdraft" and then charge you for that. This is their business model - it's how they make sufficient income to operate.
There are "basic bank accounts" which don't provide a credit facility, but these only exist because people with poor credit histories can't get bank accounts otherwise, and the regulator has threatened to enforce their availability otherwise. However since this means that there currently isn't any rule, the banks make it very difficult for an ordinary person (with good credit) to open a "basic bank account".
More information here: https://researchbriefings.files.parliament.uk/documents/SN03...
And a Supreme Court decision here: https://www.supremecourt.uk/cases/docs/uksc-2009-0070-judgme...
I'm pretty sure all of them do, just ring up your bank and ask them to set your overdraft limit to 0
I've certainly done this with HSBC & Santander in the past, and when I got my Monzo account it was 0 by default (You had to sign up for an overdraft if you wanted one).
Monzo might be an exception here.
In the US, 2%+ on all purchases (either directly or through points) is pretty standard. Going up to 5%+.
But I know this can be very different in other countries. I believe Japan has little to no incentives?
This is just as anecdotal as GP or indeed myself. I never use a debit card and don't know anybody that uses them other than for getting cash out of an ATM
For info: the debit & credit cards from my bank look almost identical. The only difference is one says "credit" in small black text. My credit card handles exactly like my debit card in terms of tap-and-pay etc. I just wouldn't use it to take out cash from an ATM, but then I can't remember when I last needed to do that.
You can be dinged both for having credit and not using it in a given month, as well as exceeding a certain threshold (~10%?) of your credit limit.
So yeah, I don't think I care too much about my credit rating at all, it doesn't seem to be affected by this in the sligtest.
Also worth noting Credit Karma uses TransUnion which is only one of the big three rating agencies, and arguably the least important compared to Equifax and Experian.
What is this unicorn you speak of...? :) jk, I know some exist, I've just been irrationally faithful to a bank that probably does not deserve it anymore (coop)...
(But I keep my savings in an account that offsets against my mortgage, so I'm effectively getting a similar deal in practice by not accruing interest on that.)
The only exception where I'd prefer a debit card is in very rare cases when there's an additional fee for using a credit card. That's usually for large sums and/or international payments though, in which case I tend to use a specialised FX company or Revolut. My normal debit card is literally the last card I ever use, when all else fails or is more expensive.
But why? The credit card is strictly better isn't it? I thought the main reason people used debit cards was that they got one automatically with their checking account and just never bothered to apply for a CC, but that's not the issue for you.
And yes, it can be easily worked out but I guess I just can't be arsed. And for purchases under £100, credit cards offer no additional protection whatsoever, so for my daily shopping I'd just be making my life more difficult for no reason.
They offer better protection against fraudulent charges though? If your card gets skimmed it doesn't matter whether you were paying £5 or £5000.
What exactly can a credit card do better than this?
the key difference is with the debit card it's your money that's been stolen, whereas with a credit card it's the bank's money
This means for example if you buy a flight and the airline goes out of business, your credit card provider will need to refund you. Also if goods are faulty, you now have two possibilities to get your money back - and the credit card companies are usually more amenable.
1. (As everyone says) consumer protection. I can dispute a charge to a CC and am not standing out the cash (unlike debit)
2. Debit transactions don't have any inherent limit. The bank might flag a very large transaction but once a debit transaction is underway it can't be stopped. I had > £10k stolen from my online account via a debit transaction and though the bank made good, still, bad taste.
3. Most important if you are young - using (and paying off) credit card will improve your credit score which helps you when you do need the credit.
4. Delayed payment. Even when you clear your debt every month you're still getting the benefit of 30 days free credit on your purchases. In our current savings-rate environment this is somewhat moot but anyone who travels for work or has significant work expenses that they have to wait to get reimbursed for will find this a major feature. Lending your employer money really sucks.
5. Rewards cards. These have gone crappy over the last decade but if you are in a role where you have significant work expenses or where you put most of your expenditure through the CC it can be worthwhile to hunt around for and switch cards for deals. Spending £1000 at Amazon/year on a debit card will get you exactly £0 in rewards. Even 1% cashback would be worth having.
The only downside to CC's I see is that some people can't trust themselves with credit - they'll spend up to their limit and get into a spiral of debt. If you don't do that, they're better than debit cards in my opinion.
1) I've been able to dispute payments on my debit cards without any issue, they were always reversed instantly by the bank. Maybe I've been lucky, I don't know. And for the "bank is liable for your purchases" thing - that doesn't apply to anything under £100 either.
2) That is a stupid limitation of UK banks, not debit cards in general. I have a bank account in Poland and for the debit cards with that bank I can set individual limits for internet transactions, terminal payments, CNP(card not present) transactions as well as ATM withdrawals - with separate daily/monthly/temporary limits. Why British banks don't implement this is unfathomable to me.
3) I suppose, I have no comment on this really.
4) yes, but then you need to remember to pay it off and how much exactly, which is a bit of a pain if you have your daily spending mixed in with bigger purchases that you want to pay off over a longer period of time.
5) Again, personal experience - other than 0% interest on purchases, never had a credit card in the UK with any rewards whatsoever.
And yeah, it's not about downsides of CCs - it's just that when I pay for my daily shopping with my debit card it's out of my account, I know how much I have to work with at any given time, done. As I said elsewhere, I can't be arsed to work out it if my spending is spread across multiple accounts and different forms of credit.
I used to fly to New York in first for free once a year on my reward points before COVID.
Is there ever a situation that you can use a credit card but not a debit card? There are occasionally places that only accept debit cards, but I think the only time I've had a debit card refused was when hiring a car.
Hotels will sometimes do the same for a room night plus potential minibar charges.
The pre-auth gets released when you make the payment at the end of the car rental period.
The amount is (temporarily) deducted from my available balance when I use a debit card, just like it is deducted from the credit limit when I use a credit card.
https://www.ukfinance.org.uk/data-and-research/data/cards/ca...
£16.9bn on credit, £61bn on debit.
I suspect credit card spending is much more popular than you are suggesting due to consumer credit act protections and cashback offers.
Come on, Hacker News. You are supposed to be better than this — repeated discussions with the same "but in Europe" "I've do X so Y doesn't happen" comments is why I stopped reading Slashdot.
I've downvoted several anecdotes in this discussion. They contribute nothing to the discussion.
Feels like a lot of places are shunning Visa at the moment.
Other than getting a new card number (which some could say is a GOOD thing) switching from Visa to Mastercard in the UK has hardly any impact as 99% of places accept both.
This is delusional - the British have as many credit cards as people, £56.5 billion on credit cards, and 40% of credit card transactions were contactless, so certainly not large purchases.
Not quite that bad. In 2019 it was 82% visa 17% mc
and since there has been a move towards mastercard. My main bank, FirstDirect switched my debit card over this year. I also use Wise which is also with mastercard.
If they try to shaft both sides, then they'll simply lose market share.
I live in the Netherlands and biggest supermarket chain here, Albert Heijn, is strictly Mastro-only. This is not a problem for the locals, but you will find angry reviews left by tourists on pretty much every ah branch in Amsterdam on Google Maps.
The second-largest chain, Jumbo, will happily accept my AMEX credit card. In many cases, the groceries are even (slightly) cheaper there. That's why it has been my preferred place to do the groceries for years. But I find my self goes to ah much more often than Jumbo recently, simply because I moved and there is one right across the street.
There are a small handful ah branches (see below) in tourist spots that does accept credit cards. In all other places, you should see posters apparently made by the staff that puts red crosses on Visa, MasterCard and AMEX logos near the entrance and/or the checkout kassa.
From https://www.ah.nl/klantenservice/onze-winkels/zelfscannen-en... (in Dutch):
> In sommige winkels kan je met je creditcard of buitenlandse pre-paid debetkaart betalen: de winkels op Schiphol, veel stationswinkels, de winkel achter het paleis op de Dam in Amsterdam en de winkel aan de Weteringschans in Amsterdam. Bij alle andere winkels kan dit niet.
It wasn't a branch that accepted credit cards (it was full of crossed off card logos), the clerk saw my foreign card with Mastercard logo and said that wouldn't work but I insisted by showing it had a Maestro logo on the back. Reluctantly they said OK, go ahead and for everyone's surprise, it worked.
The transaction ended showing up on my credit card statement, and to this day I really don't know what happened. I know that international withdrawals (that should use Maestro network) appear on my checking account. Who knows...
Example in English: https://www.flysas.com/en/help-and-contact/faq/booking/why-d...
And in Danish: https://www.tivoli.dk/da/om/vilkaar-og-betingelser/betalings... (or without the reasoning in English: https://www.tivoligardens.com/en/om/vilkaar-og-betingelser/b... )
https://www.citizensadvice.org.uk/debt-and-money/borrowing-m...
If you force cash and credit card transactions to be the same price then the extra 0.5% is charged to everyone, and outside of extreme cases like this post there is little incentive for credit card operators to lower their fee.
I would be willing to bet the fees Amazon gets are vastly different from the fees a small merchant has to endure.
They obviously tried to squeeze a little bit more and now they’ll leave it to the shareholders to pressure the company to accept whatever Bezos wants.
I worked in credit card payments (on acquiring side).
Any market share advantage between Visa and Mastercard is very, very fragile. It is basically your choice which card to pull out for payment.
It is also why Visa and Mastercard these are so alike almost in every aspect. When one does something, the other copies it.
The only reason this is still split between two companies is exactly because of this parity between products. People have no reason to prefer one over other and simply toss a coin to make their choice.
When I had chance to configure my phone to do NFC payments, my bank supported it only for Mastercard, so I configured Mastercard and that's how it is now. I know a lot of people got Mastercard because here (in Poland) it was tiny bit faster than Visa.
If Amazon bans UK Visa, people will not stop using Amazon. They will either pull out the other card or grumble for couple of days and get Mastercard.
It is likely Visa has NO negotiation power here. They are the ones that have commoditized themselves and are easily replaceable for their competitor. It is likely Amazon is well aware of this and this is just a show of strength that will be followed by Visa submitting to it because they have no choice.
The main motivation for this is to make payment technology transparent to the user (as in use any card anywhere, expect similar behavior, etc.) A lot of this is standardized so much that it is virtually the same for both.
And I know this, because it was my job to implement these standards. I calculated some 17 thousand pages of specifications in various forms.
Both Visa and Mastercard gain a lot form this because it is not a zero-sum game. Because of this cooperation people have been steadily increasing their use of credit card payments and this I think created a lot more revenue than they could have ever created for themselves by winning a cutthroat competition.
Merchants put up with high Amex transaction fees because Amex cardholders tend to be affluent and frequent purchasers.
Especially considering that card transaction fees (in the EU and UK) are capped by the Interchange Fee Regulation (IFR) [1]
But I suppose Amazon processes card payments in such huge volumes that they expect to get rates below the cap limits (0.2% for debit cards and 0.3% for credit cards), or Visa are applying excessive additional fees outside of the interchange fee?
Received: from a0-156.smtp-out.eu-west-1.amazonses.com (a0-156.smtp-out.eu-west-1.amazonses.com [54.240.0.156]) <redacted>
From: "Amazon.co.uk" <amazon-offers@amazon.co.uk>
Subject: Visa credit cards will not be accepted, starting 19 Jan, 2022
Date: Wed, 17 Nov 2021 09:15:34 +0000
Content-Type: text/plain; charset=utf-8
Amazon.co.uk
<name redacted>
Please note that this e-mail is being sent from an e-mail address that cannot receive e-mails. If you have any questions and wish to contact us, click here:
https://www.amazon.co.uk/gp/help/customer/display.html?<redacted>
2021 Amazon.co.uk is a trading name for Amazon EU Sarl, for Amazon Media EU and for Amazon Services Europe Sarl, all of which have their registered office at 38 avenue John F. Kennedy, L-1855 Luxembourg.The email formatting was so shite, I'm pretty sure any savvy reader assumed it was pishing (even though the URL appears legit).
Sometimes they are "empty" like here, or contain placeholders in place of the actual data, or just break random features (e.g. eBay prevented other users from sending me photos).
This should not be a thing.
Also, there are different payment systems (non US). It is up to sellers to support them.
Also, paying at stores, clinics, doctors, etc.. all done with PIX nowadays. Very few people are carrying cash these days. Very few clinics had a payment machine to accept debit/credit cards and now with PIX they have no incentive to do so anymore.
To transfer funds, you can specify the user's ID (which can be a phone number, national tax identification or some random string the user creates). To pay for purchases, you usually scan a QR code or copy a payment string using your bank's app/website. It's very convenient.
Absolutely, and I kinda expect this to become the case eventually across Europe, as the "cashless society" vision becomes inevitable. If you make it de-facto compulsory for citizens to operate electronically, it's only fair that there should be the sort of guarantees and accountability that only the State can provide, even if you lose a bit of innovation or efficiency.
Unless a business is extremely small, extremely low margin or doesn’t want an electronic record of the transaction most businesses prefer not to deal with cash.
So you are back to a payments network. Those are very hard to bootstrap and are not free to run.
https://www.businessinsider.com/pablo-escobar-and-rubber-ban...
Maybe look at Adyen instead.
By VISA/ MasterCard contract backed by governments' regulations a merchant in EU can not charge more because he's using a card instead of cash. Of course the transactions costs are paid by the customer, it's just all customers instead of those paying by card.
That's why some cards have charges, to the merchants, of around 2%... because the customer who use that cards does not pay them.
If I, as a customer, when doing an Amazon checkout saw a 2% charge to use VISA I would drop them in a second. Because that's hidden on purpose, I keep using it.
No idea what's going here.
https://www.frbservices.org/financial-services/fednow/about....
It will be a cheap/free, instant, money sending service. What will be the point of visa/mastercard/paypal then?
I don't know for sure, but 2% over revenue could easily be about what the government collects in corporate taxes derived from that revenue.
at least all b2b transactions should move out of card payments, and hopefully with crepto or modern digital banks the b2c will follow, but right now too many banks are holding people's money and too many of them are consolidated / act as a cartel.
It is also virtually cross subsidy from people paying cash/bank transfer to people paying by credit cards.
And as per my other comment, the customer isn’t necessarily paying the full 2%. If credit card companies became charities and charged 0% would all prices drop by 2%? Of course not.
If all these consumer-unfriendly practices are banned, you see the real cost of such cards. Same happens for many customers in Germany: pay 10€/month for a bank account with included VISA/MasterCard, pay 30€-60€/year for such a card, or use only a national card.
What are your thoughts on ATM fees? Is there a "real cost" to maintaining ATM fees? Should it be passed to the consumer? Or is it an unfriendly consumer practice that Europe has rightfully "banned" (aka not common)? It seems to me they're just charging you another way by selling your data or whatever!
How much do Europeans pay for Whatsapp, by the way?
Also, can you share the European law that bans merchants paying a percentage for financial transactions to the payment processor? I'm unfamiliar with it, and am also curious to understand how Visa and Mastercard exist at all in Europe given the banning of this consumer-unfriendly practice.
If I had my way, the 1€/year fee would be back ;)
> What are your thoughts on ATM fees?
I hate them, but I can understand why they exist and are still legal to this date (although it is inconvenient having to find an ATM that has a contract with my bank).
> Also, can you share the European law that bans merchants paying a percentage for financial transactions to the payment processor?
It’s limited to 0.2%, which is why the card companies have been asking customers to pay a monthly cost for the cards instead.
https://thepaypers.com/thought-leader-insights/blik-and-the-...
"(...) at the end of 2020 BLIK overtook payment cards in terms of the number of transactions made in global ecommerce (Polish and foreign) for the first time."
You can use it everywhere: from your local convenience store to Uber or Amazon Poland. It's also a Polish Venmo, or rather Zelle, where you can send money p2p using a phone number.
They are now experimenting with contactless payments, as well as trying to integrate with international online payment systems, and if those are a success, the future of Visa/Mastercard in Poland is rather... complicated.
And if Poland continues to be the predicting greenfield it was so far for FinTech, the decentralized, national solutions like these are likely to largely displace the 3rd parties of Visa/Mastercard/Amex alike.
That having said, one of BLIK's board members is the Mastercard CEE country manager, so... looks like they do anticipate that change.
Did not knew about the p2p thing. Thanks.
If it wasn't for the regular 2-5% I get back on my US-issued credit cards, I'd be mostly using BLIK only when in Poland.
I would actually trust such one more than anything bought by government...
Unfortunately, this card does not work for online payments, which has lead to PayPal being extremely popular. Other solutions, some national, some international exist as well, but have comparatively high fees.
Amazon Germany allows users to pay via SEPA direct debit from any European bank account. That incurs virtually no fees (iirc it's a flat 8c for a successful transaction), but comes with other problems regarding authorization. Only the biggest merchants tend to offer this option.
The European Payment Initiative (EPI) [0] is an ongoing effort towards online payments that work without trusting one particular private institution.
Drives me crazy that in some cases it's either that (which is unavailable to non German residents) or cash....
The merchant fees for EC card are the lowest amongst all cards. Pretty much all banks issue EC cards. Earlier, merchant fees could not be passed along to the consumer. Earlier this year, a change in regulation meant these fees would now be passed on to the consumer [0].
I foresee a future where there will be two prices (1) Payment w/o credit card and (2) Payment with EC card. I don't see why EC card owners should bear the costs of people who want to use credit card as a convenience.
[0] https://www.handelsblatt.com/finanzen/banken-versicherungen/...
I understand if the the fees accepted need to be added on and covered by the consumer who wants to pay with the most convenient form of payment they have - but again in Germany that's not even a possibility. I find it quite strange that it's one of the only places (if not the only place) in Western Europe where you struggle to pay with either cash or a card type that is only available in the country.
Banks are already in the process of issuing Visa or MasterCard debit cards to customers as top-of-wallet product, and issuing girocards only on request, sometimes also with additional fees. Visa/MC debit cards have much easier integration with Apple and Google Pay. And they can be used online, and are easier to be used internationally, as they are accepted in most places where Visa/MC credit cards are accepted, too.
The recent deprecation of the Maestro card scheme by MasterCard, which has been co-badged on virtually every Girocard for many years and which allowed the cards to be used during international trips in most countries, has only resulted in aforementioned moves of banks away from the Girocard to be accelerated.
If the EPI does not quickly come up with a card scheme that is a) very very cheap for merchants and b) rolled out quickly in all of Europe, the debit card market in Germany will fall into the hands of Visa and MasterCard. That's just how it is, unfortunately.
The bad joke behind all of this is that this entire outcome has essentially been kick-started by the European Union moving to cap interchange fees on Visa/MC debit and credit transactions - a move against Visa and MC, but one that backfired and opened the doors for national card schemes to essentially be eaten alive by those very two actors. That's because that move made these transactions cheap enough for many big merchants to start accepting these cards in the first place. Before the cap, those rates were outrageously expensive, and virtually nobody outside of the travel business accepted them.
That said, for many shops it was either girocard and cash or just cash only. Merchants just weren't willing to eat the fees associated with other card schemes.
Things have changed, though. The EU has capped the interchange fees of four party debit and credit cards to 0.2% and 0.3% respectively and now most shops tend to accept MasterCard and Visa as well.
Those cards that actually use the "ec" brand (rather than girocard) are proper debit MasterCards. You can see this on MasterCards German website [0]. Some banks are also using that branding to issue cards [1].
Beyond that, there are some girocards which are co-branded not with Maestro, but with MasterCard proper [2], although that is also unrelated to my previous statement.
[0] https://www.mastercard.de/de-de/mastercard-fuer-sie/finden-s...
[1] https://www.consorsfinanz.de/banking-service/kontakt/geld-ei...
[2] https://www.it-finanzmagazin.de/girocard-mit-co-badge-master...
This is enabled by the payment service provider APIs as per the EU Payment Services Directive (PSD 2) and the EU Single Euro Payments Area (SEPA) infrastructure that make these payments free and "instant".
Brazil has a pretty successful system in place. The only reason I still use credit cards anymore are aggressive cashback policies. For everything I can do with PIX I'm more than likely to choose it nowadays.
"The move to increase interchange fees will bring it into line with MasterCard, its rival payments group, which announced a similar move in January"
So it seems that Visa rate trails the Mastercard one and they will be the same.
No doubt they’ll work out a deal where the consumer pays more.
Edit: Could it also be that Amazon offer their own Mastercard credit card and they're trying to nudge people towards that?
I'd never even consider an Amex card due to my perception of it being something that many places won't even accept.
Lots of business meetings in London -> merchants need to accept Amex company cards -> people realize acceptance is high -> people look into Amex for their personal usage, for instance to enjoy higher rewards.
If you compare the rental flats with other top European cities, it’s really not overpriced.
Look at a 6k eur pcm flat in Barcelona and London, in Barcelona you will find slightly bigger flats with terrible build quality and services. In London you’ll get top quality fit and finish with excellent services.
Good luck finding a building with a decent concierge team in most European capitals. It’s almost unheard of.
Luxury product for rich people? Yeah, of course. Overpriced? Definitely not, there simply aren’t any viable alternatives to settle in.
Amex also has many more premium card with annual fees , travel perks etc which might be more relevant for someone living in London.
However, it's a charge card and not a credit card, so it does need to be paid off in full every month.
Only 2 of the high street banks offer them, and one is moving away from them.
The rest are all Mastercard.
Rather annoyingly most of my spending with Amazon is on my Visa credit card - can't quite figure out why they are now more expensive to process than the historically expensive AMEX.
Revenue: US$21 billion (2020)
Net income: US$10 billion (2020)
Amazon
Revenue: $425 billion (2020)
Net income: US$21 billion (2020)
It would seem the duopoly between Visa and Mastercard is very profitable, yet their fee's are constantly rising.
https://en.wikipedia.org/wiki/Visa_Inc. https://en.wikipedia.org/wiki/Amazon_(company)
In a cashless society, there's no point in mugging and robbing, because people don't have untraceable items of value on the at all times.
The only realist way to counter it is to stop charging VAT.
> In a cashless society, there's no point in mugging and robbing, because people don't have untraceable items of value on the at all times.
Because all the valuable items are digital and hackers can steal your money without meeting you in person.
Let's just take an example of who is endangered... a 16 year old girl from a strictly religious family who had unprotected sex and needs Plan B. In a cash environment, she'll pay for it with her allowance, and her parents won't ever discover she had bought Plan B. In a cashless society, her parents can see the evidence by checking her bank account.
Also, un(der)documented / "illegalized" people literally won't have a way to survive, as their access to bank accounts may be revoked or the government demand a live feed of all transactions, which means that e.g. the police can be dispatched to a supermarket where that person just bought food.
IT (and politics) definitely needs ethics education, as all the tech bros and other hypers of "going cashless" never take into account who will be negatively affected by their ideas!
Playing devil's advocate: that's only if the payment and the product are linked. When I buy something at a pharmacy with a credit or debit card, all that appears on the card together with the value is the name of the pharmacy. Looking at the bank account does not reveal whether the item I bought was toothpaste or chocolate (yes pharmacies also sell chocolate here).
A lack of cash allowance can easily be explained by buying some soda or fast food, but a paper trail is harder to consistently explain away.
You get a few added protections by purchasing with a credit card, and a mistake can't drain my current account in the same way as it could with a debit card, plus I get the benefits of a month or two credit for "free".
If I'm "forced" to use my debit card, I'll have to for essential purchases but this means that I likely won't be buying much more from amazon in the immediate future where I can find an alternative.
In Poland credit cards aren't popular at all and you just have separate account for monthly expenses with card attached to this account. For me it works fine. Don't understand the need for credit cards (I guess it makes sense for people living paycheck-to-paycheck).
I can pay with Visa on AWS, but not Amazon?
And if I close the Amazon account, it will close the AWS account?
I only really use AWS for S3, and if Cloudflare get R2 into my hands soon it does appear that Amazon will have finally done that which de-Amazons me... made it impossible to pay them. If the choice is "Change bank" or "Change shop"... one of these has far lower friction.
"When consumer choice is limited". Yea that's the problem, more competition is needed.
For example Revolut is available in a lot of countries, they're UK-based, and I'm guessing the cards are UK-issued since a lot of merchants think it's a GBP card (and they conveniently ask if they should do the currency conversion (and conveniently don't tell you their conversion rate is much higher and profits them)).
- [0] Both customer and merchant in EEA: 0.3%
- [1] Customer in UK, merchant in EEA: 1.5%
- [2] Customer in UK, merchant in UK: 0.3%
What's weird, though, is that the interchange for UK-issued debit cards used at an EEA merchant is also high (1.15%).
[0] https://www.visa.co.uk/dam/VCOM/regional/ve/unitedkingdom/PD...
[1] https://www.visa.co.uk/dam/VCOM/regional/ve/unitedkingdom/PD...
[2] https://www.visa.co.uk/dam/VCOM/regional/ve/unitedkingdom/PD...
I assume Amazon tried to leverage the tens of billions in purchases (across regions) to get a better fee structure from Visa and Visa said “no”.
No different than Costco dropping their long-standing Amex agreement in favor of Visa in the US a fewer years back.
“Kill the chickens to teach the monkeys” as they say in Singapore.
Now other companies know Visa is willing to tell the likes of Amazon “no”. Lesser companies won’t even ask.
"Starting 19 January, 2022, we will unfortunately no longer accept Visa credit cards issued in the UK, due to the high fees Visa charges for processing credit card transactions. You can still use debit cards (including Visa debit cards) and non-Visa credit cards like Mastercard, Amex, and Eurocard to make purchases. Please update your default payment method now, or add one of these new, eligible payment methods if you do not have one."
All these increasing fees definitely is a sign of pending high inflation world-wide, however. We know who stands to lose from not only the higher fees but also inflation, the typical consumer.
Perhaps because bank transfer is very developed in the UK, and wire transfers could totally replace credit cards, with lower fees?
On mobile devices, the effort to set up a wire transfer or direct debit is only maybe 1 minute for most users, and that's a one time thing, and unlike credit cards they don't expire either. Fees for the use of the system are effectively nil.
That gives visa a lot of lock in - and the competition is no longer MasterCard but instead openbanking API's.
They are probably well placed to determine how many customers use Visa with them versus Mastercard, or even have both and use both on the website. The subset who have only ever used Visa on Amazon may or may not have an alternative card they could use, but they will presumably have factored in the cost of potentially losing the sale entirely as a result of refusing Visa.
With Visa so entrenched in UK finance, it's not going to be received by customers the same way as Amex being refused (let's face it, Amex is refused most places because the only people who use it do so because they are getting cashback which is paid for by the merchant having increased fees). Instead, Visa will be the card they've always used, so if Amazon stop accepting it, I think a lot of customers will just shop elsewhere instead.
If everyone using Visa credit cards stop buying on Amazon starting 19th January, Amazon will probably budge.
But since everyone has a debit card Amazon must be betting that if they do stop accepting Visa credit cards then customers will just shrug and switch card because they really, really need that stuff now.
The free market has many problems. This isn't one.
Or, you know, Visa debit cards? Amazon don't actually let you pay with Faster Payments or direct debit AFAIK? And you can't wire transfer money you don't have, which is the whole point of a credit card in the first place.
No, this is going to be something weird about credit.
I can't help but wonder whether this is intended to fit into some sort of crypto currency (or govcoin) roll out.
B) I remember being charged an extra buck when I choose a credit card as my payment method. Why couldn't retailers just do this?
And if that is a substantial amount - how will the Lightning Network not drive Visa out of business?
[1] https://www.visa.co.uk/about-visa/visa-in-europe/fees-and-in...
---
Some customers received a notification from Amazon this week after making purchases, which said that "starting 19 January 2022, we will no longer accept Visa credit cards issued in the UK" due to the high fees charged by Visa to process the transactions
This says that only Visa credit cards will be blocked, not Visa debit cards.
I have a speculative guess that it might not just be about the merchant cost... It does seem that Visa offers more customer protection than Mastercard from what I can tell, so perhaps too many customers have got Visa involved for refunds because of the many dubious Amazon marketplace sellers listing fake or substandard products.
Like who is paid what exactly by whom. Is this somewhere available?
But additionally I use the +servicename trick on Amazon, and the email was delivered to me at jack+amazon@myemail. If it’s phishing it’s incredibly well done as it came from the source to the recipients used by the source
It's clearly some sort of negotiation ploy over fees.
--
Cryptocurrency will put Visa out of business. Both for debit and credit.