Still a Flexible Friend?


Amazon announced last week that it would stop accepting Visa credit cards as a payment method on its platform from January of next year. And to hammer the point home they offered cash incentives to customers to shift to alternative payment methods.

The case made by the online reseller was that the transaction charges associated with the Visa cards was just too high, and the direction of travel over the course of the pandemic hadn’t offered any comfort about future costs. Visa said it was ‘disappointed that Amazon is threatening to restrict consumer choice’.

Of course, it is hard to tell how this one will land with the general public. I am not convinced will have an enormous amount of sympathy for a company (Amazon) that has a questionable attitude toward its tax liability and a recent surge in sales that has seen its owner reach for the stars (quite literally). Then again a company that operates largely in a duopoly crying foul about ‘restriction of choice’ is also a little difficult to swallow.

So perhaps we shouldn’t focus on the specifics and instead see this as another example of the cumulative cost of transacting business. And one which has been accelerated by the changes in consumer behaviour as a result of the pandemic.

The Federation of Small Business and the British Retail Consortium both produced reports at the end of 2020 highlighting this issue, detailing the proportional increase in the cost of accepting digital payments over the last few years. 

Of course one of the lasting shifts brought on by lockdown(s) will be the predominance of digital payment methods. Many outlets that stopped accepting cash due to health and safety concerns have made the decision to adopt it as an ongoing practice. Whether we like it or not, the fact is we are using far less cash.

The challenge for many MI resellers is that they just aren’t in a position to try and hold the Credit Card providers to ransom, in the way Amazon are. 

Jeff Moody is the Commercial Director at the British Independent Retailers Association (BIRA) and he asserted that this was effectively a disproportionate share on smaller resellers who simply did not have the leverage necessary to effectively negotiate.

“The contracts available to large national chains are often not available to individual smaller independent retailers,” he said.

What is certain is that for retail sectors such as ours to suggest there is an alternative solution for accepting payment is simply not an option. We have to follow where our consumers take us on this one and that’s what opens up the challenges created by this kind of infrastructure.

The last word should go to Martin McTague of the FSB.

“The costs that accompany acceptance of card payments represent yet another overhead for embattled small retailers” 

The MIA has been working with the BRC to continue to draw attention to this issue, but we would like to hear from Members about their experiences. Please get in touch if you would like to contribute to this debate.