South America is Pressing for More Regulation as Credit Card Transaction Fees Soar High

A pressing need for more regulation is on the horizon.  This is the current reality of many South American countries looking to get their Netflix to fix on a budget.  In recent news, credit card companies, Visa and Mastercard, are pushing for higher transactional fees for popular and not to mention, highly demanded entertainment commodities: Netflix, Spotify, and Amazon Prime Video.  Regions like Chile, Peru, Colombia, and Argentina, that are subject to such a change are pushing back with a call for regulations to be implemented that would limit the extent of how much can be charged as a means of maintaining a balance that is fair and amicable to all parties involved.

Such a call is not exclusive to the South American countries affected by the new tax.  The United Kingdom is also pushing for similar regulations.  Ever since its exit from the European Union or otherwise known as “Brexit”, regulation has been lacking in the department of transactional fees.  For this reason, similar complaints have been filed against both Visa and Amazon Prime.  Amazon Prime has established that it will no longer be accepting Visa credit card payments.  This new decision that took effect as of mid-January 2022 was met with some distaste as consumers felt that their choice of payment was being inhibited.  However, Visa also faced similar backlash for charging exorbitant fees which prompted Amazon Prime’s ultimatum in the first place.  Amazon Prime has put forth the effort to maintain amicable relations with consumers who paid with Visa credit cards prior by offering a twenty-pound compensation to switch to a more optimal payment alternative.  

Seeing that the United Kingdom is facing a similar experience with credit cards, Visa has set a prime example and awakening for South American countries facing a similar impending fate.  It has brought on the reality of what too could happen to the South American countries affected currently if the issue prolongs.  Regulation is the main resolution in mind because that will put a ceiling on just how high credit card fees can go.  

Amidst all of the backlash, Visa has commented its say on the matter at hand.  Visa has asserted that contrary to popular belief, it actually does not solely impose such fees and actually has less control over the matter than is thought as it is a partner in a collaborative payment network.  Mastercard, on the other hand, has declined commentary at this time. 

Date of publication 2/8/2022 

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