You might want to bring cash the next time you shop at Walmart.
The discount retail behemoth announced this weekend that it will gradually stop accepting Visa cards at all of its locations, meaning you now have one less payment option every time you shop. Fees that were called “unacceptably high” were blamed for the decision, even though Walmart Canada hauled in roughly $5 billion worth of profit for 2015.
So it looks like the company is rollingback prices for itself this year.
“Walmart’s purpose is to save customers money so they can live better,” a press release from Walmart says. “We are committed first and foremost to this purpose, which requires us to keep costs as low as possible.”
All credit cards charge fees to retailers, which usually hover between one per cent to 2.5 per cent of the cost of what’s being purchased. The fees can sometimes depend on what card the customer’s using (premium cards usually charge more) as well as the company that owns the card.
Visa Canada, for example, advertises on its website that its fees typically range between 1.42 and 2.08 per cent for standard retail purchases. However, MasterCard shows that for the same purchases, fees range from 1.44 per cent to 2 per cent. Although larger retailers like Walmart are entitled to a special 1.26 per cent rate, which may have been enough for the massive retailer to drop the other card for good (although it’s also worth noting that Walmart has its own MasterCard).
If the decision frustrates you, you’re certainly not alone. CTV reports that Visa actually made up the majority of all credit card transactions globally in 2015. And with Walmart being as large as it is (11,500 stores worldwide; 400 in Canada), we can assume the numbers would be relatively identical in store.
As for which stores will stop accepting it first, a statement posted on Walmart’s website says it’ll start at locations in Thunder Bay, Ont. beginning July 18. Afterwards, it’ll be rolled out across the country in phases.
For its part, Visa said it offered Walmart “one of the lowest rates available to any merchant in the country.” But it looks like Walmart is just as eager as its customers to save.