Walmart Canada Shuts Visa Down Over Fees

July 20, 2024 by
Walmart Canada Shuts Visa Down Over Fees

Walmart’s impressive market clout has given it a lot of power in the field before; when you buy as much product as Walmart does, you have ability to make demands in terms of prices, delivery schedules, and things like that.

That clout has extended to payment card fees, and we’re seeing Walmart really flex its muscles here against a similar-grade titan in the field: Visa.

More specifically, it’s the nearly 400 locations that make up Walmart Canada, and as of Monday, it stopped taking Visa cards in response.

Right now, the impact is localized to three stores in Thunder Bay, Ontario, but reports note that the remaining 370 outlets are set to follow in short order.

The exact nature of the shutdown is unclear, though limited to Canada.

The reports note that Walmart Canada and Visa had been in negotiations over what Walmart called “unacceptably high” fees. The negotiations yielded little fruit, leading us up to the present day, when Walmart threatened to toss Visa out altogether failing a “better deal.”

Fast forward a little ahead and Walmart followed up on its threat, tossing Visa out. A Walmart representative subsequently noted optimism that “…we will reach a deal with Visa.”

Visa, meanwhile, followed up with a novel proposition, instead telling its customers to pass on Walmart.

Visa noted that there were over 5,200 stores in Thunder Bay that took Visa, but it “remains committed to doing everything reasonable” to keep Visa’s presence intact. Oh, and Walmart pays among the lowest interchange rates in Canada.

Customers, however, were nonplussed. While they sympathized with Walmart, few believed that they would be the beneficiary of savings obtained from lower interchange rates.

Further, customers were ready to take Visa’s advice in fairly large numbers and move to other stores instead of Walmart.

We’ve already seen research that says users will only use about three payment platforms before the exclusion of most every other; it’s not out of line to say that, at this point, Visa is one of these systems.

There are a host of other stores to shop with, but when you’ve only got three payment platforms before you give up on most others on average, the weight tends to go with the payment system. Only time will tell who buckles first, but we’re seeing just how important a mobile payment system can be here.

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