Amazon to Stop Accepting Visa Credit Cards in the UK — Report


According to a report published by Reuters, Amazon.com, Inc. (AMZN) plans to stop accepting credit cards issued by Visa, Inc. (V) in the U.K., starting next year, due to high transaction fees.

Meanwhile, Amazon customers in the U.K. can continue to use Visa debit cards, American Express (AXP) and Mastercard (MA) credit cards, and Eurocard.

Company Reaction

An Amazon spokesperson said, “As a result of Visa’s continued high cost of payments, we regret that Amazon.co.uk will no longer accept U.K.-issued Visa credit cards as of January 19, 2022.”

A Visa spokesperson said, “We are very disappointed that Amazon is threatening to restrict consumer choice in the future.”

Market Reaction

Following Amazon’s announcement, the U.K. Trade Commission has called on the government to improve the trade agreement between the U.K. and the European Union (EU).

Furthermore, analysts have called on the U.K. regulators to look into credit card fees. (See Insiders’ Hot Stocks on TipRanks)

During Brexit, the EU had imposed a cap on credit card fees charged by issuers. However, this cap is not in place in the U.K.

Tamara Cincik from the U.K. Trade and Business Commission, said, “If Amazon can’t make it work, with all their resources and ability to navigate legislation to avoid costs, then small businesses have no chance and so the government must improve the U.K.-EU trade and cooperation agreement to keep British businesses competitive.”

Wall Street’s Take on Amazon

Recently, Citigroup (C) analyst Jason Bazinet maintained a Buy rating on Amazon but lowered the price target to $4,100 from $4,175 (15.5% upside potential) to reflect the third-quarter results.

However, Bazinet thinks there is a lot of scope for growth in the company’s business-to-business services.

Overall, the stock has a Strong Buy consensus rating based on 30 unanimous Buys. The average Amazon.com price target of $4,088.17 implies 15.2% upside potential. Shares have gained 14.3% over the past year.

Website Traffic of Amazon

TipRanks’ Website Traffic Tool, which uses data from SEMrush Holdings (SEMR), the world’s biggest website usage monitoring service, offers insight into Amazon’s performance.

According to the tool, the company’s website traffic registered a 30.64% decrease in global visits in October. Moreover, website traffic has declined 2.4% year-to-date.

Wall Street’s Take on Visa

On November 1, Mizuho Securities analyst Dan Dolev assigned a Buy rating to Visa and reduced the price target from $275 to $255 (24.4% upside potential).

Dolev said, “The expected dollar value of incentives in FY22 of ~$10 billion is roughly in line with their normal trajectory had COVID not happened. In other words, while the % appears elevated, this is a reflection of management’s low travel CXB volume assumptions, which we believe is very conservative given the pace of border reopening.”

Overall, the stock has a Strong Buy consensus rating based on 13 unanimous Buys. The average Visa price target of $276.77 implies nearly 35% upside potential. Shares have lost 9.1% over the past six months.

Website Traffic of Visa

TipRanks’ Website Traffic Tool, which uses data from SEMrush Holdings (SEMR), the world’s biggest website usage monitoring service, offers insight into Visa’s performance.

According to the tool, the company’s website traffic registered a 20.72% decrease in global visits in October. Moreover, the website traffic has declined 5.3% year-to-date.

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