Wal-Mart Will Decline Some MasterCards

December 4, 2003
Wal-Mart will stop accepting some MasterCard debit-card transactions next year. Other retailers are likely to take similar measures as they digest the terms of a landmark lawsuit earlier this year.

It's likely to be a confusing development for consumers who have grown accustomed to the almost universal acceptance of Visa and MasterCard. At issue are the fees that merchants pay when they make purchases with Visa and MasterCard debit cards.

Merchants pay higher fees when consumers sign for their purchase rather than enter their PIN number at the point of sale.

The dispute does not affect "pure" credit cards. Rather, it centers around the "check cards," as they're often called, that deduct funds directly from consumers' checking accounts.

"We choose to eliminate the option rather than pass the costs on to our customers," a Wal-Mart spokesman said.

Wal-Mart was the lead plaintiff in a class-action lawsuit brought by retailers against MasterCard and Visa. The suit claimed the bank cards improperly forced merchants to swallow higher fees by requiring them to honor both credit and debit cards from Visa and MasterCard.

Wal-Mart says customers will still be able to use their MasterCard debit cards -- but you'll have to key in your PIN rather than sign for the transaction. The difference is that PIN transactions go through a different, lower-cost payment network.

The huge retailer has negotiated an arrangement with Visa under which it will continue to accept Visa debit cards on signature transactions but it didn't release details of the agreement.

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