Amazon halts plan to stop accepting Visa credit cards in the UK

There is an Amazon warehouse.

Amazon had planned to stop accepting Visa credit cards in the UK.

Brits were expected to be prevented from using a Visa-issued credit card on the platform from January 19th. The change will no longer take place, the firm said in a statement Monday.

Amazon is working with Visa on a solution that will allow customers to use their Visa credit cards on, an Amazon spokesman told CNBC by email.

Amazon made a shock announcement in November, saying that they had high fees for processing credit card transactions. Visa said it was very disappointed in the move and would work toward a resolution with Amazon.

Amazon and Visa have been at odds in the past, with Amazon introducing a surcharge on Visa credit cards in Australia and Singapore last year.

It is not clear why Amazon decided to change its mind about removing Visa credit cards from the U.K.

After January 19th, Visa will no longer be accepted on, but customers can still use their Visa cards.

Visa and Mastercard have raised interchange fees in order to make up for the cut they take on digital transactions between the U.K. and European Union. After the EU cap on interchange fees ceased to apply in Britain, card networks were allowed to raise their charges.

The dispute is not related to the U.K. withdrawing from the EU. The move was thought to be a way for Amazon to get some bargaining power over Visa to lower its fees.

David Ritter, a financial services strategist at IT firm CI&T, said the about-face from Amazon was no surprise. The move would have been difficult given that Visa credit cards may be tied to digital wallet like Apple Pay, and Amazon's own Prime subscription service.

Amazon has some leverage, but there is no way it won't accept Visa cards. It is more likely that Amazon is applying pressure. Major players in the retail space tend to pay their own rates. The move by Amazon is likely to be used to negotiate a longer-term agreement on rates, or even to push for a freeze on its current rates.

Kroger's temporarily banned Visa credit cards at a number of its stores due to high costs associated with major card networks, as other companies complain of the high costs associated with major card networks.

Visa and Mastercard are facing growing pressure from financial technology upstarts like Afterpay, which offer "buy now, pay later" services that let shoppers split the cost of their purchases over a period of monthly installments.

Roger De'Ath, head of U.K. at TrueLayer, said that the latest twist in the saga shows the power of the Amazon brand. The initial announcement pushed the debate around card fees for merchants into the mainstream.