Newspaper article The Canadian Press

Walmart Canada Will No Longer Accept Visa Due to 'Unacceptably High' Fees

Newspaper article The Canadian Press

Walmart Canada Will No Longer Accept Visa Due to 'Unacceptably High' Fees

Article excerpt

Walmart Canada to stop accepting Visa

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TORONTO - Walmart says it intends to join the list of retailers in Canada that don't accept Visa cards, citing high fees for transactions. It's a move a retail analyst has said will cause "pain on all sides."

All credit cards charge fees to retailers, which generally are between one per cent and 2.5 per cent of the cost of what's being sold. The fees depend on the type of card the customer is using -- cash-back and premium cards generally have higher fees -- and the type of retailer they're shopping at.

Walmart Canada quietly made the announcement on Saturday that it would gradually stop accepting Visa cards at all of its locations, citing "unacceptably high" fees.

But a statement from Visa said the credit card company offered Walmart "one of the lowest rates available to any merchant in the country."

Doug Stephens, a Toronto-based retail analyst and strategist, noted that both sides will likely see disadvantages to this deal.

"If you can't walk into a mass merchant and use a Visa card, that's going to seem very strange," Stephens said.

"You can't ignore the fact that Visa has a tremendous market share," he said. But he added, "If you do business with Walmart, and Walmart ceases to do business with you, you can't help but feel that."

Consumer finance industry newsletter Nilson Report says that Visa made up 56 per cent of credit card transactions globally in 2015, and Wal-Mart Stores Inc., Walmart Canada's parent company, is widely reported to be the world's largest retailer.

"At the end of the day, when we strip everything out of the debate, we're dealing with the potential that six out of ten customers will come into a Walmart store and be disappointed that they can't use their credit card," Stephens said. "Competition is extremely tough. This is not a good time to limit your consumer's ability to buy from you."

He pointed out that this isn't the first time the two titans have clashed -- in the U.S., Wal-Mart is currently suing Visa for the methods it uses to verify transactions, and the companies have also reportedly butted heads over fees, although American stores will still accept Visa cards despite the change in Canada. …

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