Walmart Canada to refuse Visa credit cards as interchange row heats up
13 June 2016 | 9455 views | 2
The turbulent relationship between North America's largest retail supermarket chain and the card schemes has reached a new nadir, with a decision by Walmart to refuse to accept Visa credit cards in its 370 stores across Canada.
In announcing its decision, the store claims that its Canadian arm pays over $100 million in credit card fees each year.
In November last year, Visa and MasterCard caved in to pressure from Canadian competition authorities and agreed to set a voluntary 1.5% ceiling on interchange rates in the country for the next five years.
The latest move by Walmart followed an evaluation of credit charges that drew the conclusion that the fees applied to Visa credit card purchases "remain unacceptably high".
"Visa and Walmart have been unable to agree on an acceptable fee for Visa transactions," the chain says in a statement. "As a result we will no longer accept Visa in our stores across Canada, starting with our stores in Thunder Bay, on July 18, 2016. This change will then be rolled out in phases across the country."
Customers will continue to be able to use other forms of payment including cash, Interac debit, MasterCard, Discover, and American Express. The injunction applies only to Walmart's Canadian operations.
Walmart has led a high-profile campaign on both sides of the border in the long-running battle between retailers and card schemes over interchange fees. The firm was one of the driving forces behind the now-defunct MCX, a QR code-based mobile wallet joint venture with other retail giants such as Target, CVS and 7-Eleven that hoped to bypass credit cards, reducing fees. MCX hit the buffers after Walmart began the rollout of its own mobile payments service to nearly 600 stores in Texas and Arkansas in May.
Previous skirmishes between the opponents have been fought out in the courts with a series of claims and counter-claims keeping legal teams from both sides in clover over the past ten years.
Walmart is betting that the latest move will force Visa into a rethink of its hard-nosed stance.
Says the retailer: "We sincerely regret any impact this will have on our customers who use Visa and remain optimistic that we will reach an agreement with Visa."