Walmart Canada will continue accepting Visa credit cards within all 409 of its Canadian stores, ending a months-long stalemate in which the retailer threatened to ban the payments network from its stores.
In June, Walmart said it would expel Visa from all its Canadian stores unless the network agreed to lower the interchange fees charged with credit card transactions. The retail giant stopped accepting Visa at its three Thunder Bay outlets the next month, and followed up three months later with a ban at 16 stores in Manitoba.
But customers will be able to use their Visa cards again in the banned locations starting Jan. 13.
The lift on the Visa ban is obviously a positive for consumers, but it does raise the question: Was Walmart able to negotiate more retailer-friendly fees, or did the retailer simply cave due to pressure from shoppers? But neither Walmart nor Visa have commented on the specifics, leaving any rationale behind the deal to be purely speculative. Walmart Canada, which has said it pays more than $75 million USD annually on credit card transaction fees, called the amount Visa charges “unacceptably high” in a June 11 statement on its web site.
Retailers have long blamed interchange fees for cutting into profits. Many SMBs impose minimums on card purchases so the fees don’t take a large percentage out of a small transaction.
Retailers and credit card networks traditionally have had a rocky relationship, but the ongoing popularity of credit cards as part of the modern payments ecosystem gives retailers very little leverage in negotiating lower fees. With Walmart Canada’s companywide acceptance of the Visa cards despite the retailer’s prior issues, it’s hard to imagine other brands finding success in minimizing fees.