Walmart says it has decided to stop accepting Visa credit cards as a form of payment in its Canadian stores due to high transaction fees.
The company says it intends to join the list of Canadian retailers that don’t accept Visa because of the credit card’s “unacceptably high” fees. The announcement was made on Saturday in a company statement where Walmart said they will gradually stop accepting Visa credit cards as a form of payment.
In a statement from Visa, the credit card company said they offer “one of the lowest rates available to any merchant in the country”. All credit card companies charge retailer fees which are usually between one and 2.5 percent of the consumer’s purchase. Retailer fees also depend on the type of card the customer uses and the type of retail store.
In the online company statement, Walmart said it pays “over $100 million in fees to accept credit cards each and every year.” Last month, Walmart reported a worldwide total revenue of $115.9 billion US for the first quarter of 2016.
Toronto-based retail analyst and strategist, Doug Stephens, explains that, “At the end of the day, when we strip everything out of the debate, we’re dealing with the potential that six out of ten customers will come into a Walmart store and be disappointed that they can’t use their credit card.”
Walmart says the first of their Canadian locations to be affected by the change will be the Thunder Bay, Ontario store. Starting July 18, that location will no longer accept Visa credit cards. They add, “This change will then be rolled out in phases across the country”.