Bloomberg reports that Walmart has begun the process of carrying through on its threat to stop accepting Visa cards in its Canadian stores unless the credit card company lowers its transaction fees. The first step - stop accepting Visa at three Walmart stores in Thunder Bay, described as "a port city of about 120,000 people on the northern shore of Lake Superior."
Walmart's strategy appears to be pushing Visa as far as it can before the credit card company blinks, which to this point, Visa hasn't done; the company says that it "remains committed to doing everything reasonable to ensure Canadians can use their Visa cards everywhere they wish to shop -- including at Wal-Mart stores,” though it hasn't yet lowered its fees.
The story notes that "Canada has emerged as an arena for early skirmishes between big retailers and payments networks over fees. In September 2014, Costco Wholesale Corp. told customers it would stop accepting American Express Co. cards at its Canadian stores the following year and switch to Mastercard. Five months later, AmEx and Costco announced they planned to end their exclusive U.S. relationship, as well."
Walmart has said that it has not yet "set a timetable" for when it will extend its strategy to other Canadian markets.
Walmart's strategy appears to be pushing Visa as far as it can before the credit card company blinks, which to this point, Visa hasn't done; the company says that it "remains committed to doing everything reasonable to ensure Canadians can use their Visa cards everywhere they wish to shop -- including at Wal-Mart stores,” though it hasn't yet lowered its fees.
The story notes that "Canada has emerged as an arena for early skirmishes between big retailers and payments networks over fees. In September 2014, Costco Wholesale Corp. told customers it would stop accepting American Express Co. cards at its Canadian stores the following year and switch to Mastercard. Five months later, AmEx and Costco announced they planned to end their exclusive U.S. relationship, as well."
Walmart has said that it has not yet "set a timetable" for when it will extend its strategy to other Canadian markets.
- KC's View:
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I'm totally on board with Walmart on this one, and I suspect they won't do this slowly ... Thunder Bay was a way to get Visa's attention, and now they'll have to be consistent and persistent as they expand this strategy and let Visa know they mean business.
