The company says it spends annually more 100 million in fees to accept payments by credit card, adding that it must “reduce such costs in order to continue to keep prices down and to save money in [its] customers ” . the new policy will take effect on July 18 at Walmart Thunder Bay, Ontario.
It will then be applied in phases in the rest of the country. Walmart said it will continue to accept payments by MasterCard, American Express and Interac.
In a written statement, Visa Canada regretted the decision to Walmart, which, according to company will have “negative repercussions” for customers of the retailer.
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.”
The retailers says customers will continue to be able to use other forms of payment including cash, Interac debit, MasterCard, Discover, and American Express.
Walmart Canada said it’s holding out hope that it can “reach an agreement” with Visa for lower fees.
The two companies have been feuding for years. Walmart sued Visa over swipe fees in New York in 2014, alleging that “Visa’s monopoly power has enabled it to dictate price and inhibit competition.”
Walmart again sued Visa earlier this year, alleging the company is trying to increase profits by using less-secure methods for debit card verification.