The digital payments industry has seen explosive growth over the past few years, with more consumers opting for contactless payments and alternative payment methods. This shift has put pressure on traditional banking institutions, such as Visa and Mastercard, who have long held a duopoly in the market. Now, Amazon is adding to this strain by moving away from supporting Visa credit cards in some countries, and imposing fees on customers who pay using Visa credit cards in others.

Amazon’s decision to no longer accept Visa credit cards in the UK was particularly significant as it serves millions of customers around the world. Analysts have speculated that this move is part of an effort to negotiate lower processing fees from Visa. Regardless of whether or not this is true, it highlights the power that tech giants like Amazon have when it comes to influencing the payments landscape.

Visa’s loss of market share due to Amazon’s decisions is only one example of how digital payments are reshaping the way people make purchases. According to recent research conducted by McKinsey Global Payments report, there have been over 200 million new entrants into digital payments since 2016, changing consumer behavior and creating new opportunities for companies outside of traditional banking institutions. In addition to this shift toward digital payments, many businesses are now beginning to look at alternative payment methods such as cryptocurrencies and direct debit transfers as well.

This transformation in consumer preferences towards digital payments presents a challenge for companies like Visa and Mastercard who have benefited from their longstanding duopoly in the past. While these two companies still hold a strong position with 51% of global card spend and $110 billion spent annually in processing fees last year, they must compete with growing competition if they want to remain profitable in this rapidly changing space.

For businesses looking to leverage digital payments without breaking the bank on processing fees or sacrificing customer experience, there are a number of options available. Third-party payment gateways like Stripe and PayPal offer inexpensive alternatives that require minimal setup time and offer features such as recurring billing for subscription services or integrated loyalty programs for shoppers. Additionally, some providers offer flat-fee pricing models which can be attractive for smaller businesses that may not process large volumes of transactions but still need reliable payment processing services.

Overall, it’s clear that we’re witnessing a major shift away from traditional banking institutions as more consumers turn towards alternative payment methods; however, it remains unclear what impact this movement will have on established players like Visa and Mastercard going forward. As more companies enter into the digital payments space and the competition continues to increase, we can expect both consolidation within existing firms and new entrants looking to capitalize on customer demand for low costs, convenience, and security around their transactions – all factors that will continue shaping how we pay going forward.