Walmart to Stop Accepting Visa in Canada
It has been reported that Walmart Canada will stop accepting Visa credit cards. The phase out will start in Thunder Bay, Ontario on July 18, 2016 and then it will roll-out to the rest of the country.
One of the reasons listed is that Visa offers high retailer fees. But another part of it has to do with its relationship with MasterCard (whether they publically admit it or not). Walmart offers its own co-branded credit card, which is a MasterCard.
Credit Card Highlights
The Walmart Rewards MasterCard is a pretty straightforward credit card. You may see the term “Walmart Reward”, which essentially just means cash back that can only be used on Walmart purchases.
- No annual fee
- Earn $25 sign up bonus ($15 after your first purchase at Walmart and $10 for going paperless)
- Earn 1.25% cash back on Walmart purchases
- Earn 1% cash back on all other purchases
Personal Experience
Personally, I use the Capital One Aspire World Travel Elite MasterCard, for a 2% return on all purchases, including Walmart, so that’s why I would never bother signing up for the Walmart credit card. They would need to offer above the 2% mark. When Target had a co-branded credit card, they offered 5% cash back instead. Though they did end up closing up shop throughout Canada.
I don’t think that this will make that big of a difference to Walmart’s business. I am guilty of going to Walmart, because the prices are more competitive, especially with its price-match program.
Thoughts
I highly doubt that just because they stop accepting Visa credit cards, that it will reduce the number of customers. If anything, this is probably a start move by Walmart, as it will probably even encourage more people to sign up for their credit card. We don’t have to look further than Costco’s model, where they used to only accept American Express. Now that they switched to MasterCard only, it might have even helped their business.
With MasterCard having exclusive at 2 of the major stores in Canada, Visa and American Express have some work to do.
How do you feel about Walmart?
I’m neither here nor there when it comes to Walmart because I personally don’t think they have the lowest prices. Having said that, I’m just happy they are highlighting the need for government intervention when it comes to merchant fees in Canada. Most people don’t realize it’s not just the swipe fees (VISA /MC 1.56% – 2.1%) it’s also renting the terminal fee $30, account maintenance monthly fee $10, contactless (tap) fee .01 per tap, premium card fee (.50% – 1.5%), foreign exchange fee… IT REALLY ADDS UP!
True, there may be some cost saving measures in this decision.
My Walmart takes American Express still
Full transition will be phased in throughout the country. Starting with Thunder Bay first on July 18, 2016.
Do you have a source with regards to American Express? All news revolves around Visa, but looks like they still accept American Express
Good question. I just tweeted them. Let’s see what they say!
Apparently American Express is still accepted…
https://www.ratesupermarket.ca/blog/walmart-canada-to-no-longer-allow-purchases-on-visa-cards/
Thanks for the heads up! It looks like it. Will be monitoring how things develop over time.