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Exclusive-Visa's chief financial officer expects to resolve fee row with Amazon

Stock MarketsNov 19, 2021 03:48PM ET
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2/2 © Reuters. FILE PHOTO: A Visa credit card is seen on a computer keyboard in this picture illustration taken September 6, 2017. REUTERS/Philippe Wojazer/Illustration 2/2

By Matt Scuffham

NEW YORK (Reuters) - Visa (NYSE:V) expects to resolve its credit card fee dispute with Amazon.com Inc (NASDAQ:AMZN) in Britain and hopes to continue its co-branded credit card partnership with the e-commerce giant in the United States, its Chief Financial Officer told Reuters.

Amazon said on Wednesday that it would stop taking payments from Visa credit cards in Britain from mid-January next year.

"We've resolved these things in the past and I believe we'll resolve them in the future," Vasant Prabhu said in an interview on Friday, adding: "It is our expectation that there will be a resolution so that UK consumers are not impacted."

Shares in Visa pared losses after Reuters reported Prabhu's comments, moving from 1.4% lower on the day to 0.5% lower. The shares then gave back those gains and were last trading down 1.4%.

Amazon said in its Wednesday statement that credit card charges should be "going down over time with technological advancements, but instead they continue to stay high or even rise."

Analysts have suggested its stance may be a negotiating tactic. In the past, other big retailers have settled fee disputes with Visa after announcing they were going to quit taking its credit cards in narrow segments of their businesses.

Walmart (NYSE:WMT) Inc's unit in Canada, for example, said in 2016 it would stop accepting Visa credit cards after being unable to reach an agreement on fees. Seven months later the companies said they had settled the matter.

Prabhu said reports on Wednesday suggesting the dispute was the result of an EU-enforced cap on fees no longer applying in the UK after Brexit were "entirely inaccurate."

That rule applied to cross-border transactions between the EU and UK, whereas the dispute relates to domestic transactions, he said.

In recent months, Amazon has also introduced surcharges on customers using Visa credit cards in Singapore and Australia, citing high fees, as the relationship between the two companies appeared to deteriorate.

Some analysts had expressed concern Amazon's move in the UK could be a precursor to the retailer dropping Visa's credit card in other territories, something Prabhu said he hoped would not materialize.

"Restricting consumer choice doesn't help merchants either," said Prabhu. "If a merchant tells me I can't use my preferred card that is not helpful to me as a consumer."

Amazon also said it is considering dropping https://www.reuters.com/world/uk/amazon-stop-accepting-visa-credit-cards-britain-2021-11-17 Visa as partner on its U.S. co-branded credit card and is in discussions about this with both with Mastercard (NYSE:MA) and Visa.

Visa said it remains in discussions about continuing its partnership with Amazon and is hopeful that it will continue.

"We hope to get to the point where our relationship with Amazon goes back to being what it was," Prabhu said.

Exclusive-Visa's chief financial officer expects to resolve fee row with Amazon
 

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