Walmart Signals Trouble Ahead for Visa and Mastercard’s Proposed Settlement

Walmart has made its position clear regarding a proposed settlement on swipe fees, arguing that a judge should reject the deal from Visa and Mastercard because it doesn’t offer enough benefits to large merchants.

Credit card issuers and retailers that have been waiting for a resolution on the matter may have to wait a bit longer. But merchant groups that aren’t happy with the terms of the proposed settlement are likely pleased to have a leading company in their corner.

Walmart is the largest retailer in the U.S. with over $568 billion in retail sales during 2024, according to the National Retail Federation. And a company of Walmart’s size can be highly influential when it comes to determining the guidelines that govern the industry.

The proposed settlement stands to lower the interchange fees that have frustrated merchant groups over the years. Even small reductions in those charges could result in substantial savings for businesses that accept thousands of credit card payments, or more, each year.

The proposed deal would also empower merchants to reject payments from certain credit cards. 

Under the terms of the proposed settlement, a merchant could decide which forms of payment best suit their business model, turning away payments from credit cards that may cause them to incur higher fees.

For example, a merchant could choose to no longer accept payments from rewards credit cards, which may charge higher interchange fees. In that case, a merchant could steer a consumer wanting to use a rewards credit card for payment toward using a debit card or cash instead.

But some experts don’t think that allowing merchants to refuse to accept credit cards that carry higher costs is a practical solution, according to comments made by Don Apgar, Director of Merchant Payments at Javelin Strategy & Research in a recent PaymentsJournal report.

“Retailers don’t want to be put in a position of instituting fragmented payment policies that disadvantage consumers and add friction to the shopping experience,” Apgar said. 

Though credit card payments bring a plethora of benefits to retailers, merchant groups would be happier if the costs associated with those benefits decreased or went away altogether.

“Merchants, for the most part, acknowledge that card payments are fast and convenient, but the rising cost of interchange and network fees has damaged the value proposition for merchants,” Apgar added.