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Walmart Canada stops accepting Visa cards

274 points by jackgavigan 10y ago

devonoel 10y ago
Gotta love that marketing doublespeak, trying to make it sound like it's for the customer rather than their bottom line.
- scarlac 10y ago
  > Following an evaluation of credit card transaction fees in Canada and the rest of the world, we have concluded the fees applied to Visa credit card purchases remain unacceptably high. > (...) requires us to keep costs as low as possible. Sounds pretty to-the-point to me. Remember that for 'budget' stores and chains the bottom line should translate directly to customer benefit (ie. lower price). An added anecdote: I've run a startup with high-priced goods/services with low profits and card expenses are a huge PITA and will cost you a considerable amount of money.
- jeffdavis 10y ago
  Can't it be both? How is that doublespeak?
gambiting 10y ago
So as a customer, if my bank only issues Visa cards, and I am not willing/can't get a credit card of a different type, what do I do?
- maegget 10y ago
  Shop somewhere else, or pay with cash?
  - curiousgal 10y ago
    OR starve. /s
- joelhaasnoot 10y ago
  Switch bank
- gpvos 10y ago
  Use cash.
- spash 10y ago
  > and I am not willing You live with your choice. > and I can't get You try to look harder for other options.
- mathgeek 10y ago
  Walmart is trying to leverage its market power against Visa. You can leverage your market power against Walmart by shopping elsewhere if you so desire. Walmart believes, probably correctly, that people like you shopping elsewhere will be the lesser effect compared to the difference in transaction fees to Visa.
  - LionessLover 10y ago
    But lowering the fees is a good thing. It's a cash cow for the credit card issuers, and you pay it in the end - and you also pay the higher retail prices if you yourself don't use a payment method that the retailer has to pay a high(er) fee on because the fees are priced into the items. The only thing bad is that the large retailers like Walmart have a much easier time negotiating significantly lower fees while small retailers have to pay whatever the card processors are asking for - which in my country is as much as 2-4%. Here is an example calculation: https://www.cardfellow.com/average-fees-for-credit-card-processing/ https://www.cardfellow.com/average-fees-for-credit-card-proc...
    - mathgeek 10y ago
      It can be viewed as simply as "when fees goes down, something else goes up," as well. You also have to consider that many people invest indirectly in Visa through mutual funds. There are many other factors.
- MustardTiger 10y ago
  Since this is in Canada, you use your bank card like normal.
- op00to 10y ago
  You can easily get a prepaid Amex if your credit is not good. Or pay by check (do they still do that in Canada?).
  - goodcanadian 10y ago
    Or pay by check (do they still do that in Canada?). Nope. Hardly anywhere will accept cheques anymore.
    - colejohnson66 10y ago
      The grocery store I work at does.
- Broken_Hippo 10y ago
  If your bank only offers Visa cards, it might still be possible to use it as a debit card, since those sorts of transactions have a different sort of fee if I remember correctly. Contact your bank for details. Or you know, use cash. Don't shop at walmart. That sort of thing.
- JustSomeNobody 10y ago
  If you're not willing to get another cc, then go shop somewhere else. If you can't get a cc, then use cash. Can't get too much more simple than that.
  - jonknee 10y ago
    > Can't get too much more simple than that. It sounds like it was more simple than that when you could have just paid with Visa.
    - JustSomeNobody 10y ago
      Only if we assume you had a visa or were willing to get one.
BlackJack 10y ago
"To keep prices low we continuously assess opportunities to lower our operating expenses... Customers will continue to be able to use...American Express." Thought this was funny given that Amex must have the highest interchange & fees. Their statement still makes sense because Walmart is saying Visa fees in Canada are too high compared to their rates in other markets. Maybe Target will win some market share, but I doubt it. I think customers will switch cards or go cash. Walmart is too good at what they do.
- torgoguys 10y ago
  I had the same thought, but perhaps it is just a matter of being a huge retailer means being in a position to negotiate a sweetheart deal from AmEx vs the rest of us.
- ssharp 10y ago
  AMEX could negotiate their transaction fees down, right? Walmart is very well known for playing hardball with suppliers, so maybe they give credit card companies "take it or leave it" offers as well.
  - MissingGear 10y ago
    Costco Canada dropped Amex two years ago [1] and I was stuck with an Amex card which is not as widely accepted as Visa or Mastercard. Amex tried/are trying all kind of tricks to not have these cards closed. The best one yet was zero percent for one year - I had colleagues max the card and put that money in their savings account just for the one year interest. You bet that Walmart negotiated an excellent rate with Amex. [1] http://www.moneysense.ca/spend/credit-cards/costco-american-express-part-ways http://www.moneysense.ca/spend/credit-cards/costco-american-...
    - forgetsusername 10y ago
      >I had colleagues max the card and put that money in their savings account just for the one year interest. I'm skeptical, since "cash advance" usually has its own stipulations regarding interest rates, and is capped below your credit limit. All for, what, $150 annually per $10,000 in arbitrage? That's an hour of work for many people here.
cmrx64 10y ago
The last sentence made me feel like this is Walmart trying to force Visa's hand in this. This seems quite surprising to me in any case. Most (maybe all?) Walmarts I've been to have ATMs in the front, so it's not like people won't be able to get cash at the store. They'll probably just have to pay the $3 (or whatever) fee.
- LionessLover 10y ago
  The prices have to be the same for everyone. The fee is paid by the retailer. The more people use a card with a high fee the more likely the retailer has to raise the prices (for everyone). At least in my country that is so by law, you cannot let customers pay fees for their payment method of choice. It's the reason (that in my country) we see "minimum purchase" requirements posted if you want to pay with a card, and that credit cards are only accepted at pricier stores - or at large retailers who managed to negotiate a better deal for the fee.
  - eru 10y ago
    > At least in my country that is so by law, you cannot let customers pay fees for their payment method of choice. Which country is that? And are discounts allowed?
  - PeterisP 10y ago
    Is it really mandated by law? I have seen this condition as a contractual requirement by Visa&MC - in essence, you either comply and have the same prices for cards as for cash, or you don't get a merchant agreement and cannot take cards at all. And the country-by-country difference was a simply a result of their anti-trust laws, whether the card network is free to impose such a condition or forbid you from accepting cards, or if such restrictions are treated as anti-competitive and the merchant is free to choose.
  - bluecalm 10y ago
    I wonder what's the reason for laws like that. It's only natural that the customer pays the fee. If we had laws like that that would actually allow for competing methods of payments as there would be pressure from customers on their card/other method providers.
downandout 10y ago
It says: ...Visa and Walmart have been unable to agree on an acceptable fee for Visa transactions. As a result we will no longer accept Visa in our stores across Canada, starting with our stores in Thunder Bay, on July 18, 2016.....We sincerely regret any impact this will have on our customers who use Visa and remain optimistic that we will reach an agreement with Visa. This is nothing more than a negotiating ploy to get Visa to cave to Walmart's demands before July 18. No major retailer can afford to stop taking Visa. They may take the hit and carry through with it for a while just to show Visa they're serious, but it won't last very long.
- _s 10y ago
  Likely - but here's the thing; this could very likely be permanent if they see no noticeable drop in their revenue / profits; or not enough to offset the money saved by refusing to accept Visa. More to the point - a lot of banks offer both Visa & Mastercard, so for most folks it'd be just a case of swapping cards if they don't already have one (if they feel inconvenienced by the lack of Visa payments).
  - hellofunk 10y ago
    I think you vastly overestimate the need for Walmart in a person's life if you think they will actually switch their credit card to Mastercard with their bank just so they can shop there.
    - spdustin 10y ago
      I think you vastly underestimate both the buying power and brand loyalty shown by people who choose to shop at any retailer, especially discount ones like Walmart.
      - skylan_q 10y ago
        That's only some of the consumers. Even if there's 5% less business/revenue to Walmart as a result of this decision, that's a huge hit.
mabbo 10y ago
Just so folks understand: in Canada (actually, pretty much everywhere but America) every bank issues it's own non-credit-card affiliated debit card that can be used to pay for things at stores (or get money at the ATM). So this is annoying, but not a huge deal. I'll get to the cash, get told "sorry, no visa", and take out my debit card to pay that way instead. Really not a big deal. It's just Walmart annoying their customers to try to prove some point to Visa.
- justin66 10y ago
  What distinction are you drawing to the debit cards that banks in the US issue with the visa or MasterCard logo?
  - ForHackernews 10y ago
    In some countries, there exist electronic payment processing networks other than Visa/Mastercard.
    - justin66 10y ago
      And those countries include the United States. No idea why that's relevant.
      - ForHackernews 10y ago
        I'm not sure what extremely pedantic point you're trying to make. The relevance of the parent you responded to is that a Canadian shop not accepting Visa (or Mastercard) is only a very mild inconvenience because there are other widely used payment networks.
        justin66 10y ago
        I'm not sure what got so complicated about this question, but I was wondering what the person initially responded to here was talking about: in Canada (actually, pretty much everywhere but America) since the systems sound pretty identical.
ced 10y ago
Dear HN, I'd like to fact check my outrage... If I understand correctly, credit card terms forbid stores from offering two different prices (one for paying with and one for paying without), because if they didn't, some stores would offer a 2-3% discount for cash, and customers would switch to cash. Meanwhile, most people I've spoken with are happy with the system, because they feel like they're getting money back for free through cashback/reward programs, so credit card companies are incentivized to keep increasing their merchant fees so that they can give more money back to their customers. Restaurants/shops that don't accept credit get less customers, and are forced into the system as well. While the government could do something about it, they don't because they can track every credit card transaction (-> tax revenue), but they can't track cash. And cash-paying customers get to pay the 2-3% "credit card tax" on every transaction, which is so ridiculously backward. I hope Walmart's decision snowballs.
- mootothemax 10y ago
  It's worth noting that cash is also expensive to handle at scale. In the uk, nearly 20 years ago, the supermarkets started offering "cashback" on every transaction, where you bill would be increased by eg 10 pounds, and in return they'd give you a 10 pound note along with your receipt. The genius being that they could save huge amounts on their cash handling/management fees by moving the value through the card networks instead. (I believe this was via debit cards, which had lower fees and are by far the more popular card type in the UK, possibly in the EU as a whole)
  - thesimon 10y ago
    >I believe this was via debit cards, which had lower fees and are by far the more popular card type in the UK, possibly in the EU as a whole Indeed. The debit card charged a flat fee per transaction, so giving the customer money instead of paying the bank 0.x% for cashing it in was a logical choice.
  - Havoc 10y ago
    >I believe this was via debit cards yup...the point of sale systems skip the cash-back step entirely if the card is a credit or cheque card.
nxzero 10y ago
Idea of credit cards still puzzles me.
- op00to 10y ago
  The idea of carrying around cash for every transaction puzzles me. I pay almost exclusively with credit. I get a push notification to my phone for every transaction. At the end of the month, I get a nice CSV file with all my transactions for analysis and budgeting. I get a 1-3% rebate on all my purchases. If my card is lost or stolen, I hold no liability. With cash, the liability is all mine. I hate using cash, and only use it when I must.
  - Artemis2 10y ago
    And compared to a debit card? You have all the advantages you listed (except the rebate), but you're spending your own money.
    - dingo_bat 10y ago
      The problem with debit is that the money is immediately gone. In the case of a dispute, it takes a long time to get the money back.
      - beisner 10y ago
        Right on the money. In the US at least, there are a ton of laws and protections for consumers when it comes to disputing charges and credit card fraud in general. It is much harder to do this with debit.
    - kstenerud 10y ago
      And building no credit rating.
      - gpvos 10y ago
        This also puzzles me. Paying directly should inspire more trust than taking out credit and paying it off a few weeks later.
peeters 10y ago
In Canada, most CC agreements with merchants do not allow the merchant to pass the fee on to the consumer. You can't charge $102.04 for a $100 product if the customer is paying with Visa. Thus the total cost to consumers is completely hidden.
- eru 10y ago
  Are they allowed to give a discount for paying in cash?
  - peeters 10y ago
    They are (at least according to rule 5 here: http://www.fcac-acfc.gc.ca/Eng/forIndustry/publications/LawsReg/Pages/CodeofCo-Codedeco.aspx http://www.fcac-acfc.gc.ca/Eng/forIndustry/publications/Laws...). Not sure why I haven't seen it in practice; maybe the regulation is new like the American equivalent. I'm not a fan of making it a discount vs allowing merchants to charge a surcharge though.
    - dorfsmay 10y ago
      Mountain Equipment Coop use to have give a discount if you didn't pay with a credit card. They eliminated it saying it wasn't fair to people buying online.
    - Sgt_Apone 10y ago
      I've seen some gas stations do this. Usually 3 cents off a litre if you pay cash or debit.
    - spoonie 10y ago
      I saw it once at a small computer store in Ottawa in 2008.
- mseebach 10y ago
  > Thus the total cost to consumers is completely hidden. Just like the cost of paying by any other mean is. Cash or cheque payments are not free.
GreaterFool 10y ago
I lived in Singapore and I still have a bank account there. A year ago my bank bumped foreign transaction fees on credit cards to 3.5%. This is a robbery. I immediately cancelled that card. I recall the website said the most of the fee is what Visa (or Mastercard) imposes on them. Either way that's not acceptable.
- _delirium 10y ago
  In the U.S., Visa charges banks a 1% foreign-transaction fee. However most banks in turn charge their customers either 2-3% (tacking on another 1-2% themselves), or on more premium cards, eat Visa's fee and charge the customer 0%, while advertising it as a "no foreign transaction fee card".
  - GreaterFool 10y ago
    I saw a couple of American Express cards in US with no foreign transaction fees. As an expat and nomad I really wanted to get one of them. Unfortunately no financial services in US are available no non-residents* (bank accounts, stock trading accounts, robo advisors, credit cards, etc) * please don't complain that jobs and profits are going abroad if your country won't do business with foreigners. It is often hard to order products from US because almost nobody ships abroad (Amazon does, but not all products). Anyway, this is off topic, sorry about that.
    - rizwank 10y ago
      They are available to non residents; but only if they were allowed to get an SSN.
- tim333 10y ago
  The Visa/Mastercard fee is nowhere near 3.5%. Your bank is trying to make profits for itself. "Visa and MasterCard each charge 1 percent of purchases as a foreign transaction fee. Most banks add an additional 1 percent or 2 percent, leaving your total fee at 2 percent or 3 percent. "
ourmandave 10y ago
A few years ago the Illinois Secretary of State wouldn't accept VISA at DMV facilities because they weren't allowed to pass the fee to the consumer. (Mastercard and Discover let them though.) https://www.wbez.org/shows/wbez-blogs/why-dont-illinois-secretary-of-state-facilities-take-visa/e8710b2b-17e9-4e56-8633-a06878b259e9 https://www.wbez.org/shows/wbez-blogs/why-dont-illinois-secr... The link mentions that Indiana had the same problem but they paid the fee because Customer Service was more important.
whack 10y ago
Isn't Amex the most expensive of all the credit cards? At least that's what I would expect, given that Amex has the best rewards, and most customer-friendly service. I'm surprised Walmart would continue to accept Amex but not Visa.
- blisterpeanuts 10y ago
  Amex up until recently has charged an annual fee to consumers, which probably eliminates the bottom 10-20% of the market. Probably, Walmart and other retailers just eat the cost of the Amex retailer fee because it's a relatively small fraction of transactions; plus, there's a competitive advantage to accepting a wider range of plastic.
  - forgetsusername 10y ago
    >Amex up until recently has charged an annual fee to consumers That depends which card and/or program you're using. Just like every other CC provider.
    - blisterpeanuts 10y ago
      True, but my point is that up until recently, American Express charged higher annual fees and higher merchant fees than Visa, Discover, and Mastercard. 10-15 years ago there were many smaller retailers who would not take AmEx. Now they have several products that are "no-fee" to the consumer, though of course still with merchant fees.
sandworm101 10y ago
Rail against the credit card companies if you want, but realize this is Walmart, not an orphanage. This story is part of a negotiation between Walmart Canada and Visa. They want outrage. They want us to get mad. They want this on CNN (not likely considering what just happened). Public outrage puts pressure on Visa to cut them a better deal. Walmart admits the intention to cut a deal eventually. Let the heavyweights fight it out amongst themselves. I choose not to participate in the farce.
- cmurf 10y ago
  It is rather about which party is going to get their "cut" of the payment action. I doubt Walmart's prices go down by 2.7% if they were to renegotiate credit card fees to be the same as debit card fees. But regardless I think the crying foul is overall better because people should know that credit card fees are excessive, and maybe they should pay more attention. I'd prefer it if merchants could and would line item the exact fee for my specific card for this specific transation, as a line item, just like sales tax.
  - sandworm101 10y ago
    As a selfish consumer, I really couldn't care less who gets what share. I only care about the price. How walmart arrives at that price is their problem. Should it be higher than elsewhere, I'll go elsewhere. What we are seeing is a p_ssing contest between two big hitters that has spilled out of the boardrooms. These negotiations happen every day without us hearing a peep. Perhaps I'd be mildly interested if this was a spat between walmart and farmers or some a sympathy-worthy small business, but this is Visa.
  - notatoad 10y ago
    >I'd prefer it if merchants could and would line item the exact fee for my specific card for this specific transation that would be excellent, and as a merchant i'd love if it were possible. we save a lot of money by paying a variable rate, so a transaction on a platinum card or something that pays a higher cashback to the cardholder costs us more than a basic card. We don't even know what the processing fee for your transaction was until the end of the month when our gateway provider invoices us.
eggy 10y ago
Good for Walmart! I was one of the hopeful for a Bitcoin, or another blockchain-based currency, to cut out the middleman, all the while maintaining the convenience of spending my money as I see fit. The middleman are the 5 to 7 companies that touch a credit card transaction from POS to the bank, each taking a small cut. I am confident most HNers probably already know. Unfortunately the door didn't shut on big credit/transaction processing/bank asses fast enough, so all them have developed blockchain-based instruments to ensure they get a cut of any future transaction that flows. Short of a sudden worldwide adoption of Bitcoin by merchants and consumers overnight, this does not appear to be happening (fingers crossed), I am not sure how the market will take care of the fee situation; I'm not fond of government regulation via caps, since it will hinder other creative efforts to change the system; the disparity is what will drive an innovation (I hope). I think a player willing to take less would start a price war and gain more volume. The passivity of acceptance of these fees by the majority of consumers without any noise, is similar to how regular paycheck income tax withdrawals are like bleeding people drop by drop; they don't seem to care too much. As opposed to saying, 'Hey we'll take that 28%' all in one chunk on April 15th. People would revolt, or get very angry ;) So I think it is cool that a big player is shaking up the sleeping giant of VISA and company. I will follow this to see how quickly VISA cuts a deal. I think the Walmart letter paints them against VISA in a good light. In any case, it has brought scrutiny and public awareness to the issue.
- germanier 10y ago
  Bitcoin still has a middleman – namely the miners that are getting paid directly through transaction fees and indirectly through inflation. Sure, it might be cheaper overall (which is not a given when you would dramatically increase transaction volume) but don't delude yourself thinking it cuts the middleman out completely.
  - imglorp 10y ago
    Right. It's around us$0.05/transaction. First of all, it's lower, and second, it's a flat charge instead of a percent, which is probably more fair for users.
Sami_Lehtinen 10y ago
In Finland Lidl didn't earlier accept credit cards at all. Now they do. Everyone's been wondering when they start surcharging the credit card fees. Personally I think it's the right way to do it. I'm not aware about any store doing it right now. Only some on-line stores charge extra for different payment methods and 'handling fees', which naturally vary based on selected payment method.
IvanK_net 10y ago
Denner in Switzerland does not accept Visa, MasterCard or any other card (except of some special version of Maestro) for the same reasons. It shocked me a little during my first shopping, that I could pay only in cash in Switzerland.
ArkyBeagle 10y ago
The signal point in the statement is "Unfortunately, Visa and Walmart have been unable to agree on an acceptable fee for Visa transactions." This give this the appearance of being part of a negotiation. "Part" could also mean "drop the mic and walk away."
chrismaeda 10y ago
The backstory here is probably that Walmart was able to negotiate fee discounts with MasterCard and American Express, but Visa refused to budge. So now Walmart is punishing them for our benefit.
thought_alarm 10y ago
In Canada, direct debit is by far the most popular payment method (it over took cash over 15 years ago) and Visa plays no role in direct debit purchases. 100% of all direct debit transactions are handled by the ubiquitous Interac network, not Visa or MasterCard, and everyone with a bank account has an Interac card. So, while dropping Visa is still kind of a big deal, it's not quite as big a deal as it would be in other countries where Visa handles both credit and debit purchases. Certainly Walmart will know how much Interac is used over Visa. But here's the thing. Interac has no rewards program, and it charges the consumer a flat fee with each transaction ($0.15 I think? I don't know, I stopped using Interac 15 years ago). Yet, Interac is hugely popular. Meanwhile, we're all paying a hidden 2% tax on everything to cover the credit card interchange fees whether we use a credit card or not. It's a completely unacceptable situation and it's hard not to be on the side of the side of the retailers (even when they propose ham-fisted solutions like CurrentC).
- marxidad 10y ago
  I don't think any fees are charged any more for using direct debit.
  - orbitur 10y ago
    I'm in Canada, I've wandered into a few convenience stores in the last year that still tack on 25 or 50 cents if you use debit. No extra charge if you use Visa/MC or cash, though.
    - DKnoll 10y ago
      They're actually violating the terms of their payment processor by doing so, but some small shops don't care.
Animats 10y ago
This is just a negotiating posture. Read WalMart's web page. If WalMart had an alternative, they'd shut down all at once, not one store at a time.
tmpanon1234act 10y ago
So they just started a campaign of attrition? They're going to lose unless other companies get on board. I'm assuming Canada was chosen intentionally, based on the data, to minimize losses. But this is going nowhere unless others follow suit.
callesgg 10y ago
It is interesting that they think that would work. For me personally it would simply mean that i would not buy stuff from them, as they are unable to accept my money. AKA they would lose 100% of the revenue compared to 1-2% or whatever the percentage is.
neves 10y ago
In Brazil, it is usual for Visa and Mastercard to charge the retailer amounts as high as 6%. I don't know why nobody screams.
dsfyu404ed 10y ago
Walmart is basically saying: "By screwing us on the kinds of transactions we make the most of you're hurting our profit margin and giving us less wiggle room to undercut the competition by offering lower price. Therefore screw you, we're not taking your cards. Oh and BTW we hold the moral high ground because we serve the poor" -IIRC the vast majority of prepaid bank cards use the Visa network. -The vast majority of bank cards are issued by employers who don't want to deal with the costs associated with paper checks (not a bad thing by itself). -The vast majority of prepaid bank cards are issued to people without bank accounts (i.e. poor people) and have shit terms (which is a different issue). -Poor people typically buy lower priced, lower margin goods and make transactions for smaller amounts. -Walmart moves a ton of lower priced merchandise relative to the amount of higher priced merchandise they move. -Even at a fixed profit margin per dollar, the more small transactions are made the lower the profit margin (because 100 people buying 1 $1 item takes more cashier time than 1 person buying 100 $1 items). -IIRC payment networks usually have a fixed minimum cost of a few cents or have cost brackets based on transaction size. Therefore Walmart's statement makes sense (or maybe their PR people are really good at their jobs and I analyzed that exactly how they wanted me to).

274 points by jackgavigan 10y ago

Gotta love that marketing doublespeak, trying to make it sound like it's for the customer rather than their bottom line.

scarlac 10y ago
> Following an evaluation of credit card transaction fees in Canada and the rest of the world, we have concluded the fees applied to Visa credit card purchases remain unacceptably high. > (...) requires us to keep costs as low as possible. Sounds pretty to-the-point to me. Remember that for 'budget' stores and chains the bottom line should translate directly to customer benefit (ie. lower price). An added anecdote: I've run a startup with high-priced goods/services with low profits and card expenses are a huge PITA and will cost you a considerable amount of money.
jeffdavis 10y ago
Can't it be both? How is that doublespeak?

gambiting 10y ago

So as a customer, if my bank only issues Visa cards, and I am not willing/can't get a credit card of a different type, what do I do?

maegget 10y ago
Shop somewhere else, or pay with cash?
- curiousgal 10y ago
  OR starve. /s
joelhaasnoot 10y ago
Switch bank
gpvos 10y ago
Use cash.
spash 10y ago
> and I am not willing You live with your choice. > and I can't get You try to look harder for other options.
mathgeek 10y ago
Walmart is trying to leverage its market power against Visa. You can leverage your market power against Walmart by shopping elsewhere if you so desire. Walmart believes, probably correctly, that people like you shopping elsewhere will be the lesser effect compared to the difference in transaction fees to Visa.
- LionessLover 10y ago
  But lowering the fees is a good thing. It's a cash cow for the credit card issuers, and you pay it in the end - and you also pay the higher retail prices if you yourself don't use a payment method that the retailer has to pay a high(er) fee on because the fees are priced into the items. The only thing bad is that the large retailers like Walmart have a much easier time negotiating significantly lower fees while small retailers have to pay whatever the card processors are asking for - which in my country is as much as 2-4%. Here is an example calculation: https://www.cardfellow.com/average-fees-for-credit-card-processing/ https://www.cardfellow.com/average-fees-for-credit-card-proc...
  - mathgeek 10y ago
    It can be viewed as simply as "when fees goes down, something else goes up," as well. You also have to consider that many people invest indirectly in Visa through mutual funds. There are many other factors.
MustardTiger 10y ago
Since this is in Canada, you use your bank card like normal.
op00to 10y ago
You can easily get a prepaid Amex if your credit is not good. Or pay by check (do they still do that in Canada?).
- goodcanadian 10y ago
  Or pay by check (do they still do that in Canada?). Nope. Hardly anywhere will accept cheques anymore.
  - colejohnson66 10y ago
    The grocery store I work at does.
Broken_Hippo 10y ago
If your bank only offers Visa cards, it might still be possible to use it as a debit card, since those sorts of transactions have a different sort of fee if I remember correctly. Contact your bank for details. Or you know, use cash. Don't shop at walmart. That sort of thing.
JustSomeNobody 10y ago
If you're not willing to get another cc, then go shop somewhere else. If you can't get a cc, then use cash. Can't get too much more simple than that.
- jonknee 10y ago
  > Can't get too much more simple than that. It sounds like it was more simple than that when you could have just paid with Visa.
  - JustSomeNobody 10y ago
    Only if we assume you had a visa or were willing to get one.

BlackJack 10y ago

"To keep prices low we continuously assess opportunities to lower our operating expenses... Customers will continue to be able to use...American Express." Thought this was funny given that Amex must have the highest interchange & fees. Their statement still makes sense because Walmart is saying Visa fees in Canada are too high compared to their rates in other markets. Maybe Target will win some market share, but I doubt it. I think customers will switch cards or go cash. Walmart is too good at what they do.

torgoguys 10y ago
I had the same thought, but perhaps it is just a matter of being a huge retailer means being in a position to negotiate a sweetheart deal from AmEx vs the rest of us.
ssharp 10y ago
AMEX could negotiate their transaction fees down, right? Walmart is very well known for playing hardball with suppliers, so maybe they give credit card companies "take it or leave it" offers as well.
- MissingGear 10y ago
  Costco Canada dropped Amex two years ago [1] and I was stuck with an Amex card which is not as widely accepted as Visa or Mastercard. Amex tried/are trying all kind of tricks to not have these cards closed. The best one yet was zero percent for one year - I had colleagues max the card and put that money in their savings account just for the one year interest. You bet that Walmart negotiated an excellent rate with Amex. [1] http://www.moneysense.ca/spend/credit-cards/costco-american-express-part-ways http://www.moneysense.ca/spend/credit-cards/costco-american-...
  - forgetsusername 10y ago
    >I had colleagues max the card and put that money in their savings account just for the one year interest. I'm skeptical, since "cash advance" usually has its own stipulations regarding interest rates, and is capped below your credit limit. All for, what, $150 annually per $10,000 in arbitrage? That's an hour of work for many people here.

cmrx64 10y ago

The last sentence made me feel like this is Walmart trying to force Visa's hand in this. This seems quite surprising to me in any case. Most (maybe all?) Walmarts I've been to have ATMs in the front, so it's not like people won't be able to get cash at the store. They'll probably just have to pay the $3 (or whatever) fee.

LionessLover 10y ago
The prices have to be the same for everyone. The fee is paid by the retailer. The more people use a card with a high fee the more likely the retailer has to raise the prices (for everyone). At least in my country that is so by law, you cannot let customers pay fees for their payment method of choice. It's the reason (that in my country) we see "minimum purchase" requirements posted if you want to pay with a card, and that credit cards are only accepted at pricier stores - or at large retailers who managed to negotiate a better deal for the fee.
- eru 10y ago
  > At least in my country that is so by law, you cannot let customers pay fees for their payment method of choice. Which country is that? And are discounts allowed?
- PeterisP 10y ago
  Is it really mandated by law? I have seen this condition as a contractual requirement by Visa&MC - in essence, you either comply and have the same prices for cards as for cash, or you don't get a merchant agreement and cannot take cards at all. And the country-by-country difference was a simply a result of their anti-trust laws, whether the card network is free to impose such a condition or forbid you from accepting cards, or if such restrictions are treated as anti-competitive and the merchant is free to choose.
- bluecalm 10y ago
  I wonder what's the reason for laws like that. It's only natural that the customer pays the fee. If we had laws like that that would actually allow for competing methods of payments as there would be pressure from customers on their card/other method providers.

downandout 10y ago

It says: ...Visa and Walmart have been unable to agree on an acceptable fee for Visa transactions. As a result we will no longer accept Visa in our stores across Canada, starting with our stores in Thunder Bay, on July 18, 2016.....We sincerely regret any impact this will have on our customers who use Visa and remain optimistic that we will reach an agreement with Visa. This is nothing more than a negotiating ploy to get Visa to cave to Walmart's demands before July 18. No major retailer can afford to stop taking Visa. They may take the hit and carry through with it for a while just to show Visa they're serious, but it won't last very long.

_s 10y ago
Likely - but here's the thing; this could very likely be permanent if they see no noticeable drop in their revenue / profits; or not enough to offset the money saved by refusing to accept Visa. More to the point - a lot of banks offer both Visa & Mastercard, so for most folks it'd be just a case of swapping cards if they don't already have one (if they feel inconvenienced by the lack of Visa payments).
- hellofunk 10y ago
  I think you vastly overestimate the need for Walmart in a person's life if you think they will actually switch their credit card to Mastercard with their bank just so they can shop there.
  - spdustin 10y ago
    I think you vastly underestimate both the buying power and brand loyalty shown by people who choose to shop at any retailer, especially discount ones like Walmart.
    - skylan_q 10y ago
      That's only some of the consumers. Even if there's 5% less business/revenue to Walmart as a result of this decision, that's a huge hit.

mabbo 10y ago

Just so folks understand: in Canada (actually, pretty much everywhere but America) every bank issues it's own non-credit-card affiliated debit card that can be used to pay for things at stores (or get money at the ATM). So this is annoying, but not a huge deal. I'll get to the cash, get told "sorry, no visa", and take out my debit card to pay that way instead. Really not a big deal. It's just Walmart annoying their customers to try to prove some point to Visa.

justin66 10y ago
What distinction are you drawing to the debit cards that banks in the US issue with the visa or MasterCard logo?
- ForHackernews 10y ago
  In some countries, there exist electronic payment processing networks other than Visa/Mastercard.
  - justin66 10y ago
    And those countries include the United States. No idea why that's relevant.
    - ForHackernews 10y ago
      I'm not sure what extremely pedantic point you're trying to make. The relevance of the parent you responded to is that a Canadian shop not accepting Visa (or Mastercard) is only a very mild inconvenience because there are other widely used payment networks.
      - justin66 10y ago
        I'm not sure what got so complicated about this question, but I was wondering what the person initially responded to here was talking about: in Canada (actually, pretty much everywhere but America) since the systems sound pretty identical.

ced 10y ago

Dear HN, I'd like to fact check my outrage... If I understand correctly, credit card terms forbid stores from offering two different prices (one for paying with and one for paying without), because if they didn't, some stores would offer a 2-3% discount for cash, and customers would switch to cash. Meanwhile, most people I've spoken with are happy with the system, because they feel like they're getting money back for free through cashback/reward programs, so credit card companies are incentivized to keep increasing their merchant fees so that they can give more money back to their customers. Restaurants/shops that don't accept credit get less customers, and are forced into the system as well. While the government could do something about it, they don't because they can track every credit card transaction (-> tax revenue), but they can't track cash. And cash-paying customers get to pay the 2-3% "credit card tax" on every transaction, which is so ridiculously backward. I hope Walmart's decision snowballs.

mootothemax 10y ago
It's worth noting that cash is also expensive to handle at scale. In the uk, nearly 20 years ago, the supermarkets started offering "cashback" on every transaction, where you bill would be increased by eg 10 pounds, and in return they'd give you a 10 pound note along with your receipt. The genius being that they could save huge amounts on their cash handling/management fees by moving the value through the card networks instead. (I believe this was via debit cards, which had lower fees and are by far the more popular card type in the UK, possibly in the EU as a whole)
- thesimon 10y ago
  >I believe this was via debit cards, which had lower fees and are by far the more popular card type in the UK, possibly in the EU as a whole Indeed. The debit card charged a flat fee per transaction, so giving the customer money instead of paying the bank 0.x% for cashing it in was a logical choice.
- Havoc 10y ago
  >I believe this was via debit cards yup...the point of sale systems skip the cash-back step entirely if the card is a credit or cheque card.

nxzero 10y ago

Idea of credit cards still puzzles me.

op00to 10y ago
The idea of carrying around cash for every transaction puzzles me. I pay almost exclusively with credit. I get a push notification to my phone for every transaction. At the end of the month, I get a nice CSV file with all my transactions for analysis and budgeting. I get a 1-3% rebate on all my purchases. If my card is lost or stolen, I hold no liability. With cash, the liability is all mine. I hate using cash, and only use it when I must.
- Artemis2 10y ago
  And compared to a debit card? You have all the advantages you listed (except the rebate), but you're spending your own money.
  - dingo_bat 10y ago
    The problem with debit is that the money is immediately gone. In the case of a dispute, it takes a long time to get the money back.
    - beisner 10y ago
      Right on the money. In the US at least, there are a ton of laws and protections for consumers when it comes to disputing charges and credit card fraud in general. It is much harder to do this with debit.
  - kstenerud 10y ago
    And building no credit rating.
    - gpvos 10y ago
      This also puzzles me. Paying directly should inspire more trust than taking out credit and paying it off a few weeks later.

peeters 10y ago

In Canada, most CC agreements with merchants do not allow the merchant to pass the fee on to the consumer. You can't charge $102.04 for a $100 product if the customer is paying with Visa. Thus the total cost to consumers is completely hidden.

eru 10y ago
Are they allowed to give a discount for paying in cash?
- peeters 10y ago
  They are (at least according to rule 5 here: http://www.fcac-acfc.gc.ca/Eng/forIndustry/publications/LawsReg/Pages/CodeofCo-Codedeco.aspx http://www.fcac-acfc.gc.ca/Eng/forIndustry/publications/Laws...). Not sure why I haven't seen it in practice; maybe the regulation is new like the American equivalent. I'm not a fan of making it a discount vs allowing merchants to charge a surcharge though.
  - dorfsmay 10y ago
    Mountain Equipment Coop use to have give a discount if you didn't pay with a credit card. They eliminated it saying it wasn't fair to people buying online.
  - Sgt_Apone 10y ago
    I've seen some gas stations do this. Usually 3 cents off a litre if you pay cash or debit.
  - spoonie 10y ago
    I saw it once at a small computer store in Ottawa in 2008.
mseebach 10y ago
> Thus the total cost to consumers is completely hidden. Just like the cost of paying by any other mean is. Cash or cheque payments are not free.

GreaterFool 10y ago

I lived in Singapore and I still have a bank account there. A year ago my bank bumped foreign transaction fees on credit cards to 3.5%. This is a robbery. I immediately cancelled that card. I recall the website said the most of the fee is what Visa (or Mastercard) imposes on them. Either way that's not acceptable.

_delirium 10y ago
In the U.S., Visa charges banks a 1% foreign-transaction fee. However most banks in turn charge their customers either 2-3% (tacking on another 1-2% themselves), or on more premium cards, eat Visa's fee and charge the customer 0%, while advertising it as a "no foreign transaction fee card".
- GreaterFool 10y ago
  I saw a couple of American Express cards in US with no foreign transaction fees. As an expat and nomad I really wanted to get one of them. Unfortunately no financial services in US are available no non-residents* (bank accounts, stock trading accounts, robo advisors, credit cards, etc) * please don't complain that jobs and profits are going abroad if your country won't do business with foreigners. It is often hard to order products from US because almost nobody ships abroad (Amazon does, but not all products). Anyway, this is off topic, sorry about that.
  - rizwank 10y ago
    They are available to non residents; but only if they were allowed to get an SSN.
tim333 10y ago
The Visa/Mastercard fee is nowhere near 3.5%. Your bank is trying to make profits for itself. "Visa and MasterCard each charge 1 percent of purchases as a foreign transaction fee. Most banks add an additional 1 percent or 2 percent, leaving your total fee at 2 percent or 3 percent. "

ourmandave 10y ago

A few years ago the Illinois Secretary of State wouldn't accept VISA at DMV facilities because they weren't allowed to pass the fee to the consumer. (Mastercard and Discover let them though.) https://www.wbez.org/shows/wbez-blogs/why-dont-illinois-secretary-of-state-facilities-take-visa/e8710b2b-17e9-4e56-8633-a06878b259e9 https://www.wbez.org/shows/wbez-blogs/why-dont-illinois-secr... The link mentions that Indiana had the same problem but they paid the fee because Customer Service was more important.

whack 10y ago

Isn't Amex the most expensive of all the credit cards? At least that's what I would expect, given that Amex has the best rewards, and most customer-friendly service. I'm surprised Walmart would continue to accept Amex but not Visa.

blisterpeanuts 10y ago
Amex up until recently has charged an annual fee to consumers, which probably eliminates the bottom 10-20% of the market. Probably, Walmart and other retailers just eat the cost of the Amex retailer fee because it's a relatively small fraction of transactions; plus, there's a competitive advantage to accepting a wider range of plastic.
- forgetsusername 10y ago
  >Amex up until recently has charged an annual fee to consumers That depends which card and/or program you're using. Just like every other CC provider.
  - blisterpeanuts 10y ago
    True, but my point is that up until recently, American Express charged higher annual fees and higher merchant fees than Visa, Discover, and Mastercard. 10-15 years ago there were many smaller retailers who would not take AmEx. Now they have several products that are "no-fee" to the consumer, though of course still with merchant fees.

sandworm101 10y ago

Rail against the credit card companies if you want, but realize this is Walmart, not an orphanage. This story is part of a negotiation between Walmart Canada and Visa. They want outrage. They want us to get mad. They want this on CNN (not likely considering what just happened). Public outrage puts pressure on Visa to cut them a better deal. Walmart admits the intention to cut a deal eventually. Let the heavyweights fight it out amongst themselves. I choose not to participate in the farce.

cmurf 10y ago
It is rather about which party is going to get their "cut" of the payment action. I doubt Walmart's prices go down by 2.7% if they were to renegotiate credit card fees to be the same as debit card fees. But regardless I think the crying foul is overall better because people should know that credit card fees are excessive, and maybe they should pay more attention. I'd prefer it if merchants could and would line item the exact fee for my specific card for this specific transation, as a line item, just like sales tax.
- sandworm101 10y ago
  As a selfish consumer, I really couldn't care less who gets what share. I only care about the price. How walmart arrives at that price is their problem. Should it be higher than elsewhere, I'll go elsewhere. What we are seeing is a p_ssing contest between two big hitters that has spilled out of the boardrooms. These negotiations happen every day without us hearing a peep. Perhaps I'd be mildly interested if this was a spat between walmart and farmers or some a sympathy-worthy small business, but this is Visa.
- notatoad 10y ago
  >I'd prefer it if merchants could and would line item the exact fee for my specific card for this specific transation that would be excellent, and as a merchant i'd love if it were possible. we save a lot of money by paying a variable rate, so a transaction on a platinum card or something that pays a higher cashback to the cardholder costs us more than a basic card. We don't even know what the processing fee for your transaction was until the end of the month when our gateway provider invoices us.

eggy 10y ago

Good for Walmart! I was one of the hopeful for a Bitcoin, or another blockchain-based currency, to cut out the middleman, all the while maintaining the convenience of spending my money as I see fit. The middleman are the 5 to 7 companies that touch a credit card transaction from POS to the bank, each taking a small cut. I am confident most HNers probably already know. Unfortunately the door didn't shut on big credit/transaction processing/bank asses fast enough, so all them have developed blockchain-based instruments to ensure they get a cut of any future transaction that flows. Short of a sudden worldwide adoption of Bitcoin by merchants and consumers overnight, this does not appear to be happening (fingers crossed), I am not sure how the market will take care of the fee situation; I'm not fond of government regulation via caps, since it will hinder other creative efforts to change the system; the disparity is what will drive an innovation (I hope). I think a player willing to take less would start a price war and gain more volume. The passivity of acceptance of these fees by the majority of consumers without any noise, is similar to how regular paycheck income tax withdrawals are like bleeding people drop by drop; they don't seem to care too much. As opposed to saying, 'Hey we'll take that 28%' all in one chunk on April 15th. People would revolt, or get very angry ;) So I think it is cool that a big player is shaking up the sleeping giant of VISA and company. I will follow this to see how quickly VISA cuts a deal. I think the Walmart letter paints them against VISA in a good light. In any case, it has brought scrutiny and public awareness to the issue.

germanier 10y ago
Bitcoin still has a middleman – namely the miners that are getting paid directly through transaction fees and indirectly through inflation. Sure, it might be cheaper overall (which is not a given when you would dramatically increase transaction volume) but don't delude yourself thinking it cuts the middleman out completely.
- imglorp 10y ago
  Right. It's around us$0.05/transaction. First of all, it's lower, and second, it's a flat charge instead of a percent, which is probably more fair for users.

Sami_Lehtinen 10y ago

In Finland Lidl didn't earlier accept credit cards at all. Now they do. Everyone's been wondering when they start surcharging the credit card fees. Personally I think it's the right way to do it. I'm not aware about any store doing it right now. Only some on-line stores charge extra for different payment methods and 'handling fees', which naturally vary based on selected payment method.

IvanK_net 10y ago

Denner in Switzerland does not accept Visa, MasterCard or any other card (except of some special version of Maestro) for the same reasons. It shocked me a little during my first shopping, that I could pay only in cash in Switzerland.

ArkyBeagle 10y ago

The signal point in the statement is "Unfortunately, Visa and Walmart have been unable to agree on an acceptable fee for Visa transactions." This give this the appearance of being part of a negotiation. "Part" could also mean "drop the mic and walk away."

chrismaeda 10y ago

The backstory here is probably that Walmart was able to negotiate fee discounts with MasterCard and American Express, but Visa refused to budge. So now Walmart is punishing them for our benefit.

thought_alarm 10y ago

In Canada, direct debit is by far the most popular payment method (it over took cash over 15 years ago) and Visa plays no role in direct debit purchases. 100% of all direct debit transactions are handled by the ubiquitous Interac network, not Visa or MasterCard, and everyone with a bank account has an Interac card. So, while dropping Visa is still kind of a big deal, it's not quite as big a deal as it would be in other countries where Visa handles both credit and debit purchases. Certainly Walmart will know how much Interac is used over Visa. But here's the thing. Interac has no rewards program, and it charges the consumer a flat fee with each transaction ($0.15 I think? I don't know, I stopped using Interac 15 years ago). Yet, Interac is hugely popular. Meanwhile, we're all paying a hidden 2% tax on everything to cover the credit card interchange fees whether we use a credit card or not. It's a completely unacceptable situation and it's hard not to be on the side of the side of the retailers (even when they propose ham-fisted solutions like CurrentC).

marxidad 10y ago
I don't think any fees are charged any more for using direct debit.
- orbitur 10y ago
  I'm in Canada, I've wandered into a few convenience stores in the last year that still tack on 25 or 50 cents if you use debit. No extra charge if you use Visa/MC or cash, though.
  - DKnoll 10y ago
    They're actually violating the terms of their payment processor by doing so, but some small shops don't care.

Animats 10y ago

This is just a negotiating posture. Read WalMart's web page. If WalMart had an alternative, they'd shut down all at once, not one store at a time.

tmpanon1234act 10y ago

So they just started a campaign of attrition? They're going to lose unless other companies get on board. I'm assuming Canada was chosen intentionally, based on the data, to minimize losses. But this is going nowhere unless others follow suit.

callesgg 10y ago

It is interesting that they think that would work. For me personally it would simply mean that i would not buy stuff from them, as they are unable to accept my money. AKA they would lose 100% of the revenue compared to 1-2% or whatever the percentage is.

neves 10y ago

In Brazil, it is usual for Visa and Mastercard to charge the retailer amounts as high as 6%. I don't know why nobody screams.

dsfyu404ed 10y ago

Walmart is basically saying: "By screwing us on the kinds of transactions we make the most of you're hurting our profit margin and giving us less wiggle room to undercut the competition by offering lower price. Therefore screw you, we're not taking your cards. Oh and BTW we hold the moral high ground because we serve the poor" -IIRC the vast majority of prepaid bank cards use the Visa network. -The vast majority of bank cards are issued by employers who don't want to deal with the costs associated with paper checks (not a bad thing by itself). -The vast majority of prepaid bank cards are issued to people without bank accounts (i.e. poor people) and have shit terms (which is a different issue). -Poor people typically buy lower priced, lower margin goods and make transactions for smaller amounts. -Walmart moves a ton of lower priced merchandise relative to the amount of higher priced merchandise they move. -Even at a fixed profit margin per dollar, the more small transactions are made the lower the profit margin (because 100 people buying 1 $1 item takes more cashier time than 1 person buying 100 $1 items). -IIRC payment networks usually have a fixed minimum cost of a few cents or have cost brackets based on transaction size. Therefore Walmart's statement makes sense (or maybe their PR people are really good at their jobs and I analyzed that exactly how they wanted me to).