Wal-mart Announces Restricting Purchases Through Visa Cards Due To Unacceptably Higher Charges

Wal-mart Canada Corp., the Canadian chapter of Wal-mart Stores Inc., has announced on June 11 restricting accepting Visa Inc. V.N cards. Charging unacceptably higher fees by the global credit card provider has prompted the Ontario based retailing giant to adopt such decision, which is going to be effective from July 18.   

Wal-mart Canada’s contemporaries include Zellers, Target Canada, Hart Stores and Giant Tiger. The chain of discount stores focuses on expanding supercenters from new or converted locations. It has completed expansion plan for the fiscal year ended in January, 2016 while inaugurating 15 supercenters. The retailing giant now possesses 404 stores including 318 supercenters and 86 discount stores across Canada. 

The chain of discount stores expects to reach an agreement with Visa. However, the announced move won’t affect the US stores of the retailing giant. Meanwhile, a Visa spokeswoman has accused Wal-mart of announcing the move despite offering one of the lowest rates available to any merchant in Canada.

She has also expressed her disappointment while criticizing the retailing giant for putting their own interests prior to the consumers’ choice. Both Wal-mart Canada and Visa representatives have declined responding to questions on details of payment terms, reports Reuters.

The chain of super stores pays more than $100 million (£70 million) in every year as credit card fees. Fees on transactions are realized following confidential agreements.

Credit card companies usually charge 1% to 2.5% over the purchased amount. Depending on type of card used for purchase, Visa and Mastercard, two most popular credit card companies charge fees on variable rates. However, American Express generally charges fees in a flat rate.

Wal-mart is committed to ensure customers’ best interests while adopting measures so save their hard earned money. The retailing giant focuses to reduce operating costs including credit card fees, according to a report published in BBC.

Retailers in Canada often complaint over the high interchange fees charged by the credit card companies. Rampant complaints about the fees have attracted government intervention. Visa and Mstercard have agreed reducing Canadian transaction fees to an average effective rate of 1.5%.

Smaller retailers have little power in negotiating transaction terms with the credit card companies. Uncertainty over the exact rate of billing usually hurts businesses since their consumers are charged in between 1% and 3% on any specific transaction, reports The Guardian.

Wal-mart store, Thunder Bay near northwestern part of Ontario will initiate the move for prohibit Visa cards. The rest 370 Canadian Walmart stores will adopt the announced change in phases.