Walmart dropping Visa, citing high fees

TORONTO — Walmart Canada says it plans to stop accepting Visa cards, citing high fees for transactions.

All credit cards charge fees to retailers, which generally are between one per cent and 2.5 per cent of the cost of what’s being sold. Fees vary depending on the type of card being using — cashback and premium cards often have higher fees — and the type of retailer.

Walmart Canada made the announcement Saturday that it would gradually stop accepting Visa cards at all of its locations, citing “unacceptably high” fees.

But a statement from Visa said the credit card company offered Walmart “one of the lowest rates available to any merchant in the country.”

Documents on Visa Canada’s website show that for standard retail purchases made in-store, fees range from 1.42 to 2.08 per cent.

MasterCard’s website shows that for standard purchases at independent retailers, its fees range from 1.44 to 2.0 per cent.

But MasterCard offers lower rates to large retailers — as low as 1.26 per cent for those that have a minimum “net purchase volume” of $3 billion.

Walmart Canada said it pays more than $100 million annually on credit card fees. To keep merchandise prices low, it needs to keep card fees low, it said.

The first stores to stop accepting Visa will be in Thunder Bay, Ont., starting July 18, Walmart Canada said in a statement. After that, it will be rolled out Canadawide in phases.

Walmart has more than 400 locations in Canada, and more than 11,500 worldwide, according to the company’s global website.

Walmart Canada joins Costco, among other chain stores, in not accepting Visa. Costco accepts MasterCard for payments.

MasterCard, American Express, Discover, and Interac debit cards will continue to be accepted at its stores, Walmart Canada said.

A representative from Visa Canada said in a statement that the company regrets Walmart’s decision, and that it will have a “negative impact” on Walmart’s shoppers. Walmart Canada said the company is holding out hope that it will be able to reach an agreement with Visa for lower fees.

Doug Stephens, a Torontobased retail analyst, said Walmart Canada has likely crunched the numbers, and determined that without having to pay Visa’s fees it would stand to make more money than it loses.