While the company awaits the closure of the Visa Europe acquisition deal and US Costco portfolio in the second half of the current year, the lawsuit could be an added cost for the card company.
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In the lawsuit, filed in NY state court Tuesday, Wal-Mart said Visa has prohibited it from requiring PINs only, forcing the retailer to allow customers to use a signature in those transactions.
In a suit filed in New York State courts Tuesday, the Bentonville, Arkansas-based discounter says Visa is forcing the retailer to allow customers to use a signature when they use the chip-based debit cards.
Walmart’s suit also says that debit cards account for 70% of all card purchases at the store.
It’s also more costly.
“Visa nevertheless has demanded that we allow fraud-prone signature verification for debit transactions in our United States stores because Visa stands to make more money processing those transactions”. While it wants to require PIN’s for debit purchases, it does not require a PIN for credit card transaction. Not once did it cause any issues with my card being processed.
The retail giant has filed the lawsuit against Visa in NY state court, and highlighted that Visa’s position to accept signature-based verification “creates unacceptable risk to customer and its actions and rules are inconsistent with federal law”. In the lead-up to the deadline, many analysts anxious that shoppers would grow frustrated about the extra wait time associated with inserting a chip card in a terminal and waiting for the card to be read, compared with the magnetic swipe process. Although the embedded chips make the cards more secure than those with magnetic stripes, they’re even more secure when used along with PINs. Moreover, the retail company accused Visa for making “more money” through the signature-based verification. Chips, or EMV microchips as they’re also called, produce unique codes at each transaction, keeping fraudsters at bay. Most recently, Wal-Mart sued Visa in 2014 over card fees charged to merchants. They say they don’t think shoppers want to have to remember another PIN and prefer instead to sign for purchases.
Walmart filed court documents claiming 91 percent of false debit card purchases are completed with signatures.
Wal-Mart has long worked to find ways to avoid paying credit-card fees. However, the USA still allows for signature purchases when using the chip cards, which made Wal-Mart quite critical to the new technology.
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But ever since someone stole Rhonda Fischer’s purse past year, she’s been more careful with her purchases. Not all retailers have made the transition to the new technology, creating confusion among customers.
