General

Credit crunch: Visa plummets in the UK due to Amazon ban | Technology News

[ad_1]

After Bloomberg News reported that Amazon was also considering changing its co-branded credit card to a competitor MasterCard, losses accelerated in the afternoon.

Visa Inc. announced its biggest drop in a year and a half on Wednesday, dragging down industry peers such as Mastercard, after Amazon said it would stop accepting purchases made with the company’s credit cards issued in the UK because of next year’s.

Visa’s stock price fell by 6.5%, and its market value evaporated by about $33 billion, as Amazon recovered the high fees for processing transactions. After Bloomberg News reported that Amazon was also considering changing its co-branded credit card to a competitor MasterCard, losses accelerated in the afternoon.

The plunge has exacerbated Visa’s painful three and a half months, extending its decline from a historical high in July to 20%. Among other credit card companies, the recovery of Mastercard fell to 3.5%, American Express fell 0.8%, and Synchrony Financial fell 1.9%.

Piper Sandler analyst Chris Donat said: “Although we believe that if Amazon executes its plan, it will be detrimental to Visa, we also believe that the two companies may reach an agreement to reduce Amazon’s UK credit card fees on the Visa network.”

The upcoming UK ban is the latest in a series of changes Amazon made to Visa credit cards internationally this year. In August of this year, the e-commerce giant told customers in Singapore that it would impose a 0.5% surcharge on all orders made with Visa credit cards. Less than a month later, it announced similar measures for Australian customers.

Due to the surge in so-called “buy now, pay later” products, investor sentiment towards Visa and other credit card stocks has also weakened in recent months. Companies such as Affirm Holdings Inc., Afterpay Ltd. and Klarna Inc. have surged in popularity this year, exacerbating consumers’ concerns about reduced credit card reliance. Despite this, analysts downplayed the risks, saying that concerns about structural changes have been exaggerated.



[ad_2]
Source link

Related Articles

Leave a Reply

Your email address will not be published.

Back to top button