Battle Between Visa and Walmart Escalating

This is a continuation of the Walmart watch (Walmart Continues to Drop Visa at More of Their Stores, Walmart to Stop Accepting Visa in Canada)

The latest in the battle is Visa credit card offering the people of the province of Manitoba a $10 in free groceries if they don’t shop at Walmart.

Conditions

Below are the conditions:

• Enroll a Visa credit card by November 30, 2016
• Spend $50 or more including taxes (on a single purchase) using your enrolled Visa at a Grocery Store in Manitoba

Limitations

• Limit 1 per card
• Accounts must be open and in good standing during offer and redemption periods
• Visa Debit cards are excluded
• Convenience stores and specialty stores that sell a limited selection of food are excluded
• May exclude purchases on prescription drugs, alcohol, tobacco, lottery tickets and postage*

*May exclude probably means that in some cases, there may be no way to know what a bill looks like on a item to item basis. I’m not even sure why they bothered including this limitation.

Benefits of this Battle

Here’s how I calculate this. Manitoba has just over 1 million people living there. Let’s say almost everyone has a Visa, and for those who don’t, enough people have more than one Visa to offset that rest. So even if there were 1 million Visas in circulation, this will cost Visa a maximum of $10 million. That is assuming that everyone is going to take advantage of the offer and that there are actually 1 million in circulation.

That may not sound like a lot in their overall marketing budget, but it is still very significant amount that they do not actually need to do. But this move is going to make some noise.

Thoughts

This is a very interesting move by Visa, trying to push Walmart back. In the short term, this is obviously a nice move for a customer’s perspective, but I do wonder what is Visa’s purpose of making such a move. Feels more like Visa is burning their bridge with Walmart? I wonder if this will escalate further? Would Walmart actually cave to Visa and take them back? Probably not. Would we see some increased competition that benefits the customers? Personally, I have a good feeling about this, because Visa created a fun marketing precedent, but I remain cautiously optimistic.

For now, I am going to appreciate and enjoy this move by Visa! Thumbs up!

What do you think about this move by Visa?