Report: Walmart Canada settles dispute with Visa

A six-month battle between Walmart Canada and Visa has come to an end.



The retailer, which threatened to ban the card processor from all of its stores nationwide due to “unacceptably high” credit-card transaction fees, has ended its feud, and will resume accepting Visa cards at its more than 400 stores starting Friday, Jan. 6.



“We have come to an agreement with Visa which allows us to continue offering Visa as a form of payment in our [Canadian] stores,” Walmart said on its website. “Customers in Manitoba and Thunder Bay, Ontario, will be able to use their Visa credit card starting January 6, 2017.”



Walmart’s Canadian division stopped accepting Visa at its three Thunder Bay outlets on July 18, due to increasing transaction fees, and extended the ban three months later across 16 stores in Manitoba. If the partners could not reach an agreement, the retail giant threatened to ultimately stop accepting Visa at all its stores in Canada.



Credit card processing fees are typically based on a percentage of the total value of goods sold, but these rates differ between cards and stores. To offset these rates, retailers absorb fees into the cost of goods, a practice that translates into higher merchandise prices for consumers.



“To keep prices low we continuously assess opportunities to lower our operating expenses. Walmart Canada pays over $100 million in fees to accept credit cards each and every year. Lowering costs such as these is necessary for us to be able to keep our prices low and continue saving our customers money,” Walmart said on its website in September.



Canada is reported to endure some of the highest interchange fees in the world — averaging 1.78%. The United States followed with a close second of 1.73%, according to research firm Value Penguin.



Neither Walmart Canada nor Visa shared the new cost structure.