Truce Between Amazon And Visa Will Stem Lost Business But Confusion Still Reigns For Consumers

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“A truce has been called in the game of brinksmanship between, Inc. (NASDAQ:AMZN) and Visa Inc (NYSE:V) with the e-commerce giant appearing to relent and allow credit card customers to continue shopping on the site. The two sides have not completely backed down but last ditch talks over the weekend appear to have been productive and certainly Amazon is coming across as a lot more conciliatory in tone. Higher fees being charged by Visa remain a bugbear, and it’s likely that a long term solution will be involve some movement here, but it’s not in either companies’ interest for a war of attrition to re-start, with the prospect of significant losses in UK business for either side. This is a niggling headache Visa will want to see lifted as it grapples with competition from start-ups and more established rivals. But it does still remain the world’s largest payments processor and is still positioned squarely in the centre of the global shift towards cashless payments. With the contactless trend only recently hitting the US in a big wave, there is still plenty of growth potential ahead.

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The Truce Between Amazon And Visa

For consumers , if you’ve swapped your saved card on Amazon in expectation of the ban on Visa credit cards, it’s worth thinking carefully whether a credit card is the right option. If you make specific large purchases and want the extra protection it may well be worth switching back, but if it tends to mean you run up larger credit card debts, now could be a good time for a change. Unfortunately, this kind of 11th hour change is no good to people who had been forced to apply for a new Mastercard credit card. If you’ve already applied, it will already show on your credit record. It’s hardly fair that consumers should pay the price for two massive corporations facing off against one another."

Article by Susannah Streeter, senior investment and markets analyst Hargreaves Lansdown

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