Last month, Walmart sued Visa over similar issues.
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Walmart shoppers in Mississauga who rely on Visa to make purchases are likely still grumbling (understandably so) about Walmart’s move to ban the well-known (and well used) credit card from its Canadian stores.
“And they are using their size and scale to give themselves an unfair advantage”, said the unsigned letter.
“Walmart is unfairly dragging millions of Canadian consumers into the middle of a business disagreement that can and should be resolved between our companies”, Visa wrote in an open letter published this morning in several Canadian daily newspapers.
While common in Europe and outside of the USA for more than a decade, chip cards have only recently started seeing broader acceptance in the U.S. “The Walmart deal is important but the Costco deal was the first”.
Visa and MasterCard already agreed in 2014 to lower costs for merchants in Canada amid government pressure.
In this Wednesday, May 18, 2016, photo, the Home Depot logo appears on a credit card reader at a Home Depot store in Bellingham, Mass.
In the dispute between Visa and Wal-Mart, consumers stand to lose the most.
Visa defended itself, saying it offered Walmart one of the lowest rates of any merchant in Canada. “But Wal-Mart is still demanding more”.
“If a big retailer like Walmart is faced with the challenge of paying these fees, you can only imagine how small businesses are facing this with very little leverage or the ability to negotiate”, said Alex Scholten, president of the Canadian Convenience Stores Association. In 1996, Wal-Mart and other several retailers in the USA filed a lawsuit against Visa for the high transaction fee. The reason? “Unacceptably high fees”.
Wal-Mart has been fighting for decades to reduce card fees that can eat into profits. While that case was settled in 2003 with payments and policy changes, additional litigation followed alongside lobbying battles on Capitol Hill. Card network companies are competing for big retailers in Canada.
The Home Depot Inc. says in a new federal lawsuit that Visa and MasterCard are using security measures prone to fraud, putting it and other retailers at risk of hacking attacks by cyber thieves. Merchants can’t refuse MasterCard and Visa-branded cards without losing customers and sales, according to the antitrust claim, which seeks unspecified damages. Walmart Canada pays more than $100 million in fees each year to accept credit cards like Visa, MasterCard and Discover. Visa said it will seek to consolidate the suit with litigation filed previously.
Code of conduct: The federal government updated the code of conduct for the credit and debt card industry a year ago.
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What’s included in the fee: Payment processors charge stores, restaurants and other merchants what is called the merchant discount rate. As retailers have gotten a feel for what it’s like to shoulder the fraud costs, many have begun to deploy the technology. Visa will block all counterfeit fraud chargebacks under $25 in the USA beginning July 22.
