IDG Contributor Network: Walmart went nuclear and banned Visa from Canada
Sometimes, a bold strategic move can be both surprising and long overdue. Walmart's decision this week to ban Visa from its Canadian stores is one of those instances.
Walmart and Visa have been blood enemies for as long as anyone can remember. And Walmart holds grudges; it's part of its corporate culture.
Walmart and Visa have been having an argument about interchange for decades. Visa's argument — that Walmart pays a lower interchange rate than anyone else, thanks to its amazing volume — is a fair one. But the only meaningful threat in these negotiations is to say that you'll stop accepting the card. But how meaningful? Given that Visa is the most popular payment card in North America, it would be ridiculous for Walmart to carry it out. It's the retail equivalent of mutually assured destruction. Visa's likely revenue loss would be massive, and Walmart might lose some of its Visa-carrying shoppers, who would take a short trip to Target.
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