Walmart’s in Mississauga Won’t Be Accepting Visa Very Soon
Walmart shoppers in Mississauga who rely on Visa to make purchases are likely still grumbling (understandably so) about Walmart's move to ban the well-known (and well used) credit card from its Canadian stores. Now, Visa is kicking the rhetoric up a notch by accusing the popular superstore of using consumers as pawns in its fight over merchant fees.
"Walmart is unfairly dragging millions of Canadian consumers into the middle of a business disagreement that can and should be resolved between our companies," Visa wrote in an open letter published this morning in several Canadian daily newspapers.
Walmart recently announced that it would stop accepting Visa cards beginning July 18 at stores in Thunder Bay. After that, the superstore plans to refuse the cards at its other Canadian locations (all 400+ of them, including the stores in Sauga). The reason? "Unacceptably high fees."
The Star has a good rundown of the ongoing battle here.
Walmart said it pays over $100 million in annual fees for customers who use Visa, MasterCard and Discover (how much it pays for Visa clients specifically has not been disclosed). Visa fired back by saying that it offered Walmart one of the lowest rates out there, but the brand was never pleased. In Visa's letter, the company wrote, "and they are using their size and scale to give themselves an unfair advantage."
Some merchants are sympathetic to Walmart's cause and believe the fees incurred in Canada are unreasonably high. A spokesperson for convenience store chain Alimentation Couche-Tard told The Star, "Lower credit card fees would mean lower costs to the consumer." The Star also reported that the Retail Council of Canada says high fees are a hardship for retailers.
"I'm not suggesting that the floodgates are about to open on this," said Karl Littler, vice-president public affairs, as reported by The Star. "(But) there's potentially going to be others who will make similar decisions in the future."
According to the newspaper, the council is calling on the federal government step in and mandate lower fees. The article mentions that the former Conservative government received a cooperative response from MasterCard and Visa when it asked them to reduce interchange fees by roughly 10 per cent back in 2014.
While the Visa ban will most certainly inconvenience shoppers in Mississauga and beyond, there's no doubt that some consumers bristle at having credit card costs passed down to them via higher-priced goods. That said, many shoppers rely on Visa not because they don't have the cash on hand at time of purchase (although sometimes that is the case), but also because they can accumulate points and other rewards.
Here's hoping both companies can be mindful of diverse consumer needs going forward.
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