Canadian retailers are watching with both hope and unease Visa’s very public battle with Walmart.
An association representing convenience-store owners says they are pleased that the world’s largest retailer has highlighted hefty credit card fees, but is worried Walmart will gain an even larger competitive advantage.
“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.
He said his members pay between 1.5 and four per cent for purchases made with credit cards, likely far in excess of Walmart.
“If Walmart is the only retailer able to get a good deal because of their buying power, it certainly isn’t something we’re happy about.”
Visa has accused Walmart of using consumers as leverage to strike an even better deal by threatening to ban the popular credit card from its Canadian stores.
“I was surprised that they would publicly state that they were going to put their consumers in the middle of this business dispute,” Visa Canada president Rob Livingston said in an interview Thursday.
He declined to speculate whether Walmart’s move might have been motivated by efforts to push its branded MasterCard. Walmart did not reply to a request for comment.
After months of negotiations, Walmart quietly announced last weekend that “unacceptably high fees” has prompted it to stop accepting Visa cards beginning July 18 at stores in Thunder Bay, Ont.
The retailer then plans to reject the cards at its more than 400 Canadian locations.
Visa defended itself in an open letter published in several Canadian newspapers, saying it offered Walmart one of the lowest rates of any merchant in Canada. But the world’s largest retailer wanted more.
“And they are using their size and scale to give themselves an unfair advantage,” said the unsigned letter.
Livingston said Visa presented what it considers a “very fair offer” but doesn’t feel it is appropriate for Walmart to get a rate lower than charities, educational institutions and utilities.
“We are looking to do whatever we can reasonably do to help Canadians shop wherever they want to use their Visa cards, including Walmart.”
Convenience store chain Alimentation Couche-Tard said it’s sympathetic to Walmart’s move after lobbying for years to reduce credit card fees in Canada, which are among the highest in the world.
“Lower credit card fees would mean lower costs to the consumer,” said spokeswoman Karen Romer.
The Retail Council of Canada says high credit card fees are unacceptable to retailers.
