By now most people have heard that Walmart Canada announced it will soon stop accepting Visa credit cards. The reason they cite is that “the fees applied to Visa credit card purchases remain unacceptably high.” Visa now has a public response, but it is not at all convincing.
Visa accuses Walmart of believing “that their cost to accept Visa cards should be much lower than all other merchants – lower than local grocery stores, pharmacies, convenience stores – and yes, charities and schools too.” Walmart’s announcement didn’t include a demand for lower costs than other retailers. All Walmart said was that Visa’s costs were too high for Walmart. Visa could reduce costs for all retailers if they want. This just looks like an attempt by Visa to pit Walmart against other retailers and portray them as greedy. Walmart doesn’t control what Visa charges charities and schools.
Visa accuses Walmart of “unfairly dragging millions of Canadian consumers into the middle of a business disagreement that can and should be resolved between our companies.” This is nonsense. If Walmart is not willing to stop accepting Visa cards under any circumstances, then there is nothing to stop Visa from continuing to increase fees indefinitely. There is clearly a maximum fee level beyond which Walmart is more profitable not accepting Visa cards. It’s Walmart’s responsibility to their shareholders to reject Visa if it makes them more profitable.
The claim that Walmart is “using their size and scale to give themselves an unfair advantage” is amusing. This may be true, but it is also common practice by Visa. Smaller retailers know that when it comes to Visa’s terms, they have to take it or leave it.
It’s common for large businesses to squabble over money. In this case the battle escalated to the point where it became public. These companies are driven by self-interest. The attempt by Visa to stake out a moral high ground is a joke. Neither company’s motives are influenced much by morality. If consumers look at their own self-interest, they will be on Walmart’s side to keep extra costs down.