Dispute over Visa fees heats up as Walmart stops accepting credit card in Manitoba

The dispute between Walmart Canada and Visa over merchant fees escalated Monday as the retail giant stopped accepting the credit card at its 16 stores in Manitoba.

Walmart first refused Visa credit cards at its three stores in Thunder Bay, Ont., in mid-July, arguing that the financial services firm charges high fees to merchants.

Alex Roberton, a spokesman for Walmart, said the company pays more than $100-million a year in credit card fees and is focused on reducing Visa transaction costs.

Roberton said the impact of its policy on customers in Thunder Bay has been minimal, adding that the stores have seen an increase in cash and debit payments.

Walmart announced in June that it would expand its phase-out of Visa at all of its Canadian stores—more than 400—though Roberton said it hasn't determined which stores will be next.

Visa spokeswoman Carla Hindman said Walmart's action to further limit Visa acceptance in Canada is disappointing.

Visa has said it offered Walmart one of the lowest rates for any merchant in the country, but Walmart wanted fees that would have been lower than those charged to local grocery markets, pharmacies, convenience stores, charities and schools.

Despite the dispute, both companies say they are committed to working out a solution.

The Retail Council of Canada, which represents businesses including Walmart, has said the average merchant fee of 1.5 per cent charged by Visa and MasterCard is higher than rates charged in other countries.

The council has called on the federal government to intervene and lower fees for all merchants.

The Finance Department said it is assessing the merchant fees to determine whether the costs and benefits of credit card transactions is appropriate.

The review will take into account factors including the impact of Visa and MasterCard's recent voluntary fee reductions, the adoption of a code of conduct for the country's credit and debit card industry and approaches in other jurisdictions, said the department.