MISSISSAUGA, Ontario -- Walmart Canada is dropping Visa as an accepted payment method, it said.
Following an evaluation of credit-card transaction fees, the retailer said it has concluded that the interchange or swipe fees applied to Visa credit-card purchases remain “unacceptably high.”
In a statement posted to its website, the company said it is committed to saving people money, “which requires us to keep costs as low as possible. … We constantly work to reduce our operating costs, including credit-card fees. Unfortunately, Visa and Walmart have been unable to agree on an acceptable fee for Visa transactions. 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.”
Walmart Canada pays more than $100 million in fees to accept credit cards each year, it said. “Lowering costs such as these is necessary for us to be able to keep our prices low and continue saving our customers money.”
Customers will still be able to use other forms of payment, including cash, Interac debit, MasterCard, Discover and American Express.
The company remains “optimistic” that it will reach an agreement with Visa, it said.
The decision will not affect the U.S. stores of parent company Wal-Mart Stores Inc., Bentonville, Ark.
"Walmart made this business decision despite Visa offering one of the lowest rates available to any merchant in the country,” said Foster City, Calif.-based Visa in a statement cited by Reuters. "We are disappointed that Walmart chose to put their own financial interests ahead of their own consumers' choice."
Mississauga, Ontario-based Walmart Canada has more than 400 locations in Canada and more than 11,500 worldwide, according to the company's global website.
In the United States, Wal-Mart filed a lawsuit against Visa Inc. in a New York court, saying the payment operator was resisting the use of personal identification numbers (PINs) by U.S. customers making purchases on Visa debit cards, reported the Canadian Press.
Wal-Mart and other U.S. retailers have pushed to allow customers to use PINs instead of old-school signatures in a bid to prevent counterfeit card fraud; however, banks and payment network operators recently adopted Europay, MasterCard and Visa (EMV) chip technology and prefer chip cards verified by signatures, seeing no need to invest further in more expensive PIN technology.
According to the lawsuit, Wal-Mart said it pays Visa more for signature-based transactions rather than those made using PINs
In March, Wal-Mart had also sued Visa Inc. in an Arkansas court, accusing Visa of excessively high swipe fees, the news agency reported. The lawsuit came several months after the retail giant opted out of a $5.7 billion class-action settlement between merchants and Visa and MasterCard Inc., approved by a federal judge in Brooklyn, N.Y.
Wal-Mart, Amazon.com Inc., and Target Corp. were among those opting out of the monetary components of the settlement, in order to have the freedom to seek damages on their own.
"The anti-competitive conduct of Visa and the banks forced Walmart to raise retail prices paid by its customers and/or reduce retail services provided to its customers as a means of offsetting some of the artificially inflated interchange fees," Wal-Mart said in court documents cited by the news agency.
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