Walmart Canada To Stop Accepting Visa Cards This Summer
Walmart Canada raised eyebrows this weekend when the retail giant announced it will no longer accept Visa cards after failing to reach an agreement with Visa Canada over credit card fees. Walmart, which has more than 400 locations across Canada, will begin phasing out Visa cards on July 18th, 2016, starting with its stores in Thunder Bay, ON.
Read the full statement from Walmart Canada below regarding Visa credit card purchases:
Following an evaluation of credit card transaction fees in Canada and the rest of the world, we have concluded the fees applied to Visa credit card purchases remain unacceptably high.
Walmart’s purpose is to save customers money so they can live better. We are committed first and foremost to this purpose, which requires us to keep costs as low as possible.
To ensure we are taking care of our customers’ best interests and delivering on our promise of saving customers money, 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.
To keep prices low we continuously assess opportunities to lower our operating expenses. Walmart Canada pays over $100 million in fees to accept credit cards each and every year. 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 continue to be able to use other forms of payment including cash, Interac debit, MasterCard, Discover, and American Express.
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.
With this announcement Walmart joins the likes of Costco and No Frills as major shopping chains that don’t accept Visa cards. It should be noted that Walmart, much like Costco and No Frills parent company Loblaws, all offer their own co-branded MasterCards.
Related: Costco and American Express officially part ways
This move could be seen as a way to steer more customers towards the Walmart Rewards MasterCard. It could also be seen as a negotiating tactic to get Visa to lower the fees it charges on credit card transactions.
With over a month before Walmart starts phasing out Visa cards at select stores, there’s still plenty of time for Visa to come back to the table with a better offer.
Visa Canada charges interchange fees between 0.98% and 2.45%, depending on the retailer, transaction volume, industry, and type of credit card. See the fee chart below:
In a terse statement issued on its corporate website, Visa Canada didn’t exactly take the high road:
We regret Walmart’s decision to no longer accept Visa at its Canadian stores and the negative impact their decision will have on loyal shoppers across Canada. Walmart made this business decision despite Visa offering one of the lowest rates available to any merchant in the country. We are disappointed that Walmart chose to put their own financial interests ahead of their own consumers’ choice.
Final thoughts
It’s hard to sympathize with a company like Walmart that has been at the centre of controversy for decades over its labour practices and environmental record. But early consumer sentiment seems to favour Walmart over Visa – that this decision will hurt Visa more than Walmart because people are more loyal to their shopping centre than their credit card.
It will be interesting to see how this plays out over the next few months.
Has Walmart made the right move by dropping Visa over credit card fees? Or will this decision backfire and send loyal Visa cardholders to shop elsewhere?
I’ve always looked for reason NOT to shop at Walmart. This is just one more.