Walmart Canada to stop accepting Visa as form of payment

[bhlombardy]

I personally think a discount for using cash or Interac is the best way

This is fine for a small business or shop who likely only negotiates with their own bank for CC transactions. (independant gas-station operators do this all the time...)

However, with a large retailer like Walmart, their agreements are with each credit card provider brand, not with any one bank perse. The agreement then usually includes a provision that so long as they accept their branded card as payment, that they won't favour another form of tender over theirs. That would include offering discounts to customers for using one form over the other. This keeps them as an equal opportunity as any other form of tender.

In the case where Walmart is dropping Visa as an accepted method of payment, it's less of favouring the others than it is allowing the agreement(s) with Visa to expire. This is likely why it's a gradual phase-out versus an abrupt end. They can't actually refuse Visa in locations/regions where an agreement is still active. While Thunder Bay, I'm assuming, is an area whose agreement expires first or has already and they are giving customers a grace to make the adjustment.

[super807]

I don't shop much at Walmart, and for me, this means I will shop there even less. I have Visa. Dh has a MasterCard. We don't often shop together. And I'm not going to add another credit card to my wallet, not even a copy of dh's MasterCard in order to shop at Walmart.

bhlombardy makes good points about a lack of stores comparable to Walmart in Canada. I have been finding most of what I would have bought at Walmart elsewhere, but outside of kitchen stuff that I have been buying mostly at RCSS, it does require a separate trip to another store. I don't mind, as I quite dislike Walmart.

But Visa is one of the two most widely accepted, and therefore most widely carried credit cards in Canada. For many shoppers, this will be problematic. And adding another credit card to their wallet, and therefore increasing how much credit is available to them, is really not a great thing for many Canadians. The consumer debt to income ratio in Canada is the highest it's ever been. This really isn't the direction Canadians need.

[Ciel]

Well, Walmart is saving itself some money. More to apply to the US/Cdn exchange rate for starters.

[bhlombardy]

But Visa is one of the two most widely accepted, and therefore most widely carried credit cards in Canada. For many shoppers, this will be problematic. And adding another credit card to their wallet, and therefore increasing how much credit is available to them, is really not a great thing for many Canadians. The consumer debt to income ratio in Canada is the highest it's ever been. This really isn't the direction Canadians need.

Perhaps not, however people can/should manage their own credit responsibly. Some people cant control their drinking, but does that mean they shouldnt open more liquor stores for the rest of the general public?

Walmart is negotiating for lower merchant fees (albeit via strong-arm tactics), their claim is about keeping their retail prices low.

Keep in mind that the interchange (merchant) rates for Visa acceptance in Canada are some of the highest on the planet... ranging 3x to 5x what they are in other countries. In Australia, for example, retailers pay .3% to Visa to accept Visa as a form of payment. Why should Canadian retailers be subject to 1.5% (which is the rate Visa has proposed to Walmart Canada).

Profit margins have to be calculated to include the highest costs associated with selling that item (marketing, merchandising, and of course, methods of payment). If Walmart paid one printing company to publish their flyers, and they found another company who could do it for half the price, they'd drop the other one in a heart beat. It probably doesnt affect anyone except maybe the people who work at that printing company. If that printing company could have negotiated a better deal, then maybe Walmart would have had no reason to switch.

If Visa is charging more than the other cards for Walmart to accept them, and Walmart's intent is to keep their prices lower, then it would stand to reason that they would consider eliminating their highest-cost operator... or at least threaten to.

Walmart's not the only ones sitting at the table here unwilling to budge. Visa won't budge either. While it might be true that Visa is the most carried card in Canada (*and is it anymore?), maybe Visa should consider that many people might switch to Mastercard or another provider. Visa has had it good for decades in this country being the card of choice provided by most all of Canada's financial institutions (with the exception of BMO) -- and they had a pretty good near-monopoly going. Which is probably why they were getting away with charging 3%+ merchant fees... so coming down to 1.5% must seem like suicide to them.

But the landscape is changing and has been for a few years. RBC, TD, and Scotiabank now have Mastercards for example, and people aren't afraid to get a card from a third-party (like Capital One) for the cash-back options or even step into a BMO for an AirMiles Mastercard. PC Financial has a MC too... and of course Walmart has theirs. So Visa is no longer the "only" choice. Getting a Mastercard is getting easier and easier.

I have a Visa card, a Mastercard, and an Amex card. But I havent used my Visa in years, but I have it just in case. I also stopped using my Amex when Costco switched to Mastercard... but again, still carry my Amex just in case. I closed my BMO Mastercard account (because I have control over my available credit) when I got the Costco MC. I travel in the US somewhat frequently and I'll probably only start using my Visa when I shop at Costco in the US (who effective tomorrow accepts only Visa). So as I said in a previous post, this change at Walmart affects me personally on no level. I wonder if there are more people in my position, who have other cards, and just don't use them right now.

[ilovecats]

I can tell you, where I work (major retailer), on a daily basis, Visa is not the card most used. Debit and MasterCards are the most used.

Many small businesses are rooting for Walmart on this issue.

The cards that offer rewards are the most costliest to the retailer.

[seylz_gurl]

http://www.huffingtonpost.ca/2016/06..._10545982.html

Walmart is thinking about bringing its own payment system/app