Amazon.com Inc 's latest spat with Visa shows big retailers, armed with a growing array of payment options, are gaining the upper hand in their power struggle with card providers, but it's not a crisis for the payment company.
While Amazon may yet back down on the UK front, where the company accounts for less than 1% of Visa's credit card volume, according to an estimate by Piper Sandler analysts, the dispute is a bad sign for the card industry. Some analysts said it could presage a fight in the much bigger U.S. market."Amazon is treating this dispute with Visa as an experiment," said Piper Sandler analyst Christopher Donat.
While alternative payments have been growing for years, the pandemic accelerated a downward trend in credit card applications boosting the popularity of BNPL financing, especially among younger consumers. "Credit cards are still dominant players for non-cash transactions, but they need to be aware of the growing competition," Chris Dinga, payments analyst at GlobalData, wrote on Friday.
Some analysts said past disputes suggested Visa may have to blink before Amazon, such as when U.S. restaurant owners stopped taking Amex cards in the 1990s, leading Amex to reduce its fees.'AGNOSTIC'"Even a very large retailer like Amazon represents a relatively small portion of our payment volume," he said."If a merchant wants to offer credit in a different way, we're agnostic. We will do both. The buy now, pay later business has been a positive for us.
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