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Over the weekend, Walmart announced plans to stop accepting Visa credit cards at all of its Canadian retail locations as a result of “unacceptably high” fees, indicating rising tensions between the two firms.
The firm will roll out the change in phases across its Canadian locations beginning in mid-July. Walmart Canada will continue accepting Interac, MasterCard, American Express, and Discover. The move won’t affect Walmart’s US retail stores, according to Reuters . Credit card fees are expensive. Charges for accepting Visa cards in Canada amount to 1.42%-2.08% of the value of the each transaction, according to CBC . Walmart Canada pays CAD$100 million ($78.1 million) in card fees per year. Walmart competes with other retailers on price — it has more margin to play with if it reduces card fees.
The impact on Visa won’t be significant. In the US, 70% of Walmart’s card purchases come from debit cards and a similar percentage of the retailer’s transactions could come from debit in Canada as well. If that’s the case, Visa cards may not account for much of Walmart’s sales in Canada since Interac is the primary debit brand used by Canadian consumers for purchases at the point-of-sale. It’s unlikely that Walmart would make it significantly harder for customers to pay, in order take ground in its ongoing feud with Visa. Visa had $214 billion in purchase volume in Canada in 2015. That’s just over 4% of Visa’s total purchase volume.
Swipe fee-related tensions between Walmart and Visa have been steadily escalating. Last month, Walmart sued Visa because of a policy that requires the retailer to […]
