Starting next month, Walmart shoppers in Canada will no longer be able to use their Visa cards to pay for their purchases because of what the company is calling “unjustifiably high” fees associated with the card.
The decision, announced quietly on Saturday, comes after an evaluation of credit card transaction fees throughout the country and the rest of the world. The initiative will be phased in beginning July 18th at the stores in Thunder Bay and from there, will continue throughout the rest of the country.
The “no Visa” policy will be limited to Canadian locations and it's not yet known how long the entire process will take. Walmart stores will continue to accept MasterCard, Discover, American Express, debit and cash.
The retailer, which has more than 400 stores in Canada, will not reveal the exact total of annual credit card sales, but in a statement on its website, it says it pays "over $100 million in fees to accept credit cards each and every year."
Visa, meantime, says this will have a negative impact on Canadian shoppers, and the company is disappointed that Walmart is choosing to put “their own financial interests ahead of their own consumers’ choice.” In their own statement, Visa says that it has offered Walmart one of the lowest merchant fees in the entire country.
The Walmart-Visa break up brewing for some time
The department store and the credit card company have been battling it out for years, with the fight reaching a crescendo in 2014 after Walmart sued Visa over swipe fees in New York.
Walmart accused Visa of being able to dictate the price of goods and inhibit competition. Then, earlier this year, another lawsuit was launched with Walmart saying the credit card company was using less-secure methods to verify debit cards in order to increase profits.
While this isn’t a concern here in Canada, there are other retailers who have said no to Visa on this side of the border. No Frills won’t accept Visa or American Express, citing both as too expensive for their business. Meanwhile, the only credit card Costco accepts is MasterCard.
How do these fees impact you?
All retailers have to pay a credit card fee which is usually between 1% and 2.5% of the cost of the item being sold. Those fees vary depending on where the customer is shopping and what card they are using – for example, cash-back and premium cards tend to come with higher fees.
But as a consumer, you are not on the hook for these costs and any retailer that charges an additional fee for using a certain credit card is doing so in violation of their contract with that company. So what’s a regular Walmart shopper with a Visa card to do?
One option is to search for a new credit card which meets your needs. For example, you may consider the MBNA Rewards MasterCard which makes you eligible for 5,000 MBNA bonus points after your first purchase – the equivalent to about $50 when redeemed for cash back or travel.
Tangerine also offers a money-back credit card where you can earn up to 4% back for the first three months of purchases in your chosen categories.
Another option is to visit another retailer for some of your weekly shopping trips. If you have a Loblaws or a Loblaws affiliate store nearby, consider applying for the President’s Choice Financial MasterCard which earns you points towards free groceries.
In the meantime, Walmart Canada says it is still holding out hope that it will eventually be able to reach an agreement with Visa for lower fees. Will this impact your shopping habits? If so, it’s a good time to check out your options. Compare the best credit cards today!