According to the Globe and Mail, Canada’s #1 national newspaper, Walmart could introduce its own electronic payment system called “Walmart Pay” in Canada in 2017. Thus, Walmart would strengthen itself in a fight with Visa over credit card fees.
Walmart in Canada
Walmart, an American multinational retail corporation operating a chain of hypermarkets, discount department stores, and grocery stores, enables its users to upload their payment information to a Walmart app. Thus, users get an opportunity to pay by phone at store checkouts, without using any payment card.
Walmart Canada is going to stop accepting Visa credit cards starting this summer. The cards will be refused at the stores in Thunder Bay, Ontario first. According to Mathieu Bedard, an economist at the Montreal Economic Institute, the fact that Walmart would start refusing Visa is a sign of the questionable market power of companies offering credit cards.
Such decision is the result of a struggle between these 2 companies in recent years. Walmart has accused Visa of taking advantage of its influence over the market to charge excessive fees for purchases. As for Canadian retailers, they give their support for Walmart in the dispute.
Walmart against Visa over High Credit Card Fees
According to Diane Brisebois, President of Retail Council of Canada, higher credit card fees mainly result in higher prices paid by consumers. On the whole, they cost Canadian consumers more than $5 billion on a yearly basis.
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Brisebois further mentions that the situation related to credit card fees have been the same in many other countries. In the UK, credit card fees jumped to 0.3% of the purchase price as compared to 1.5% found in Canada.
Many experts in the field think the dominance of Visa and MasterCard over the electronic payments market is coming to its end. Thanks to the fintech revolution, meaning the wave of startups changing finance for the better, retailers such as Walmart are establishing their own payment systems so to save on fees and not to lose consumer data.