Wal-Mart To Stop Accepting Visa In Canada; Don't Expect It In The States

Relations between Wal-Mart Stores, Inc. WMT and Visa Inc V deteriorated last week when Wal-Mart said it would no longer accept Visa card payments in its 405 Canadian stores, Barron’s reports.

Wal-Mart filed a lawsuit in New York earlier this Spring complaining about Visa’s requirement for signature verification, claiming Visa insists on requiring signature verification only because they make more money on signature debit-card transactions.

Other card companies, such as Mastercard Inc MA, have not been targeted by Wal-Mart executives in their public comments complaining of exorbitant payment processing fees.

Related Link: Paying The Minimum On Your Credit Cards Can Double Your Debt

U.S. Stores Next?

Interesting to investors is the possibility that Wal-Mart might ban Visa in the US. In a note to investors, Baird Equity analysts discussed their doubts that this will happen.

“Unlike Canada where most debit cards are Interac, debit cards in US are either Visa or MasterCard,” the analysts noted. “If Walmart didn't accept Visa cards in the US, many consumers may not currently have a card that would be accepted.”

Comparisons To Costco And Amex

Wal-Mart’s action brings to mind Costco Wholesale Corporation COST and its decision to discontinue acceptance of American Express Company AXP cards. Within days of the news, American Express shares were down 9 percent while Costco shares were virtually unmoved.

Wal-Mart and Visa stocks reacted in a similar fashion. Wal-Mart shares were down less than 1 percent on Monday, while Visa closed down more than 2 percent.