As was reported earlier, Amazon UK has hit the pause button on an earlier announcement that it would stop accepting Visa for transactions in the UK. Of course, the decision to cease allowing Visa was due to the very high fees associated with using the payment processor. While Amazon could still decide to halt Visa for now – the credit card issuer is ok to keep doing business with the global e-commerce firm.
Ben Goodall, CEO of the online payments firm Banked.com, distributed his opinion on what exactly is going on. Goodall posited that Amazon probably never intended to stop accepting Visa but the ploy was to “test customer loyalty to the Amazon brand versus a payment brand.”
“There’s a couple of reasons to suspect this was an experiment on consumer behaviour. First, Amazon announced a ban on Visa credit card payments – which has a minority market share in the UK- instead of Mastercard – the most widely used credit card in the country- despite the fact that both payment providers have bumped up their processing fees,” Goodall said. “Amazon is always playing the long game and showed how far they are prepared to go to gather information to find ways to innovate and serve their vendors and consumers. The fact this also played into negotiations with Visa again is just part of the committed strategy.”
Goodall added that Amazon announced the cessation of Visa payments during Black Friday and Holiday shopping periods when there is an increase in overall spending.
Again, this would have been a perfect moment to conduct a controlled experiment on customer loyalty and consumers behaviour by gathering data on actions taken by prime customers especially,” said Goodall.
He went on to explain that Amazon would have garnered reams of data including who switched from Visa to Amex or Mastercard or who canceled Prime membership or added the Amazon Card. All of this information could be utilized if you are “building the super checkout for the future.”
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