Walmart's showdown with Visa in Canada deepens

Shoppers who slap down Visa credit cards to pay for their purchases at some Walmart stores in Canada may be in for a shock.

The big-box chain will stop accepting Visa credit cards at its 16 stores in Manitoba province, Walmart spokesman Randy Hargrove confirmed Thursday in an interview, the latest escalation in a tiff over credit-card transaction fees.

Although still limited to a fraction of Walmart's vast network, the fight reflects a deepening divide over the transaction fees Visa charges in Canada, where Walmart operates more than 400 stores.

The boycott started this summer with Walmart's three stores in Thunder Bay, Ontario.

Hargrove said Walmart (WMT) is "working to keep prices low" for shoppers -- and that apparently includes the hidden cost of those fees.

"Unfortunately Visa has not been willing to provide a reasonable rate to continue accepting their cards," he said. "We believe credit-card fees should be lower for everyone, whether they're a large retailer, small business or charity."

Visa (V) said in a statement that the decision was "disappointing" but said the company "remains committed to actively working with Walmart so that Canadians can use their Visa cards wherever they wish to shop."

In November 2014, Visa and Mastercard agreed to lower credit-card transaction fees in Canada to 1.5% beginning in April 2015 amid mounting pressure from Canadian authorities to cap fees and pass along savings to merchants.

The Canadian finance minister said Tuesday that it would review recently completed "independent audit findings that both Visa and MasterCard have met their respective commitments to reduce credit-card interchange fees" to ensure that the companies are following through.

Hargrove said the timing of Walmart's Manitoba boycott was not related to the Canadian finance minister's announcement. The boycott officially begins Oct. 24.

He declined to reveal details of Walmart's fees arrangement with Visa.

"We're committed to continuing discussions," he said, and "just looking to get a rate that's more reasonable."

The dust-up between Walmart and Visa includes a dispute over how the Thunder Bay boycott has played out.

"We know from our experience in Thunder Bay that consumers want the option to use the payment method of their choice when shopping — including at Walmart stores," Visa said.

But Hargrove said "things went better than expected" in Thunder Bay.

"Customers see the value we're providing and they've adjusted their payment methods accordingly," he said.

Walmart shares rose 0.6% in early trading to $71.94. Visa shares were down a penny to $81.48.

Follow Paste BN reporter Nathan Bomey on Twitter @NathanBomey.