Amazon Affiliate Marketing Fees

Will the Amazon-Visa dispute spill over to other credit card companies?

Will the Amazon-Visa dispute spill over to other credit card companies?
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Dispute between retail giant Amazon and card giant Visa over UK credit card fees could have repercussions for competitors credit card companies such as Mastercard, American Express and Discover, according to analysts.

The subject of dispute in Amazon-Visa is the exchange fee, also known as “withdrawal fee,” which merchants pay to banks each time a consumer makes a purchase with a credit or debit card. Fees are set by Visa and other credit card issuers. It has been controversial for years.

While Senator Richard Durbin (D-EL) has led the campaign to pass a 2010 law setting debit card fees, there have been calls for it to be repealed. Critics also argue that it does more harm than good. Life is back on the heated exchange fee row thanks to the Amazon-Visa row.

“It shines a potentially negative light from a retailer’s perspective, on a source of income for fees, you know, the lifeblood of the credit card industry,” David Morris, an analyst at Insider Intelligence, said in an interview. “The biggest problem is the fact that Amazon is targeting exchange fees in a way that could have broader ramifications for the entire industry. Other participants like Discover and Mastercard also earn a lot of money on credit card exchange and debit fees.”

Amazon, whose e-commerce site is the most visited online, announced earlier this month that it would not accept payments from Visa credit cards originating in the UK after January 19 due to concerns about excessive exchange fees for those card transactions.

Amazon Visa is shrinking on several fronts. Earlier this year, Amazon announced that it would Charge additional fees for Visa credit transactions in Australia and Singapore.

Wall Street analysts have argued that Amazon’s tariff battle overseas is a “negotiating tactic” to cut costs in the United States and other key markets. While that could put pressure on the exchange rates for other card companies as well, it could also be beneficial if they win more Amazon business..

Seattle-based Amazon is said to be in talks with Master Card Credit Card About taking Visa’s place as a partner in a co-branded card. Spokesman Master Card Credit Card She referred questions about the discussions to Amazon, which did not respond to a request for comment. Visa also did not respond to requests for comment.

When it comes to market share for general-purpose credit card use in the United States, Visa is by far the leader, according to industry research firm Nilson Report. Last year, Visa captured 53.7% of the market, while Mastercard had 23.2%, American Express had 19.2%, and Discover Financial had a 4.0% share, according to a report from Nelson in February.

Amazon’s approach may also be beneficial for some competitors who do not use Visa cards.

Kenneth Suchowski, analyst at Autonomous Research, wrote in (a) a November 17 note to clients. “We believe Visa can solve the problem in multiple ways including lowering its price, offering more discounts and incentives, or by adding other value-added services to the relationship.”

Suchowski, whose company is a subsidiary of New York-based Alliance Bernstein Investment Management, argued in an interview that Amazon is targeting Visa first because the credit card issuer has the largest market share.

“Amazon wants to negotiate these fees lower because their argument is that they have invested a lot of money in infrastructure and know how to reduce fraud in those transactions on Amazon to a really low rate,” he said.

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