Dive Brief:

• Wal-Mart Stores Inc.’s Canada unit will no longer accept Visa at all 16 of its stores in the Manitoba province as of Oct. 24, Reuters reports.

• The news comes after the retailer in July stopped accepting Visa as a payment option in three Thunder Bay, Ontario locations amid a dispute over what the retailer calls "unacceptably high fees.”

• A Wal-Mart spokesperson also told Reuters that the ban could be extended to more stores across Canada if the retailer and Visa can’t resolve their ongoing disagreement, though he didn’t disclose which stores or areas might be affected. The ban won't affect any U.S. stores.

Dive Insight:

Wal-Mart Canada argues the clampdown on Visa cards is in the best interests of its customers, but it’s a bold move to deprive them of what for many is a preferred credit card. Retail futurist Doug Stephens recently told CBC News that blocking a payment option from customers is unwise, and that both Visa and Wal-Mart will feel the effects of the decision.

"At the end of the day, when we strip everything out of the debate, we're dealing with the potential that six out of 10 customers will come into a Wal-Mart store and be disappointed that they can't use their credit card," Stephens said. "Competition is extremely tough. This is not a good time to limit your consumer's ability to buy from you.”  

In an open letter published in Canadian newspapers, Visa accused Wal-Mart Canada of using its own customers as “pawns” in their ongoing dispute. But such battles aren’t limited to Canada: Home Depot and Wal-Mart in the U.S. have also accused Visa and other credit-card issuers of forcing retailers to conduct EMV chip-enabled card transactions that require cardholders to sign for purchases because these transactions yield higher fees than the more secure practice of using a PIN to close the transaction.

Wal-Mart has played hardball over the years with suppliers and rivals alike when it comes to price wars, and now it’s getting tough on credit card issuers. The retailer led an effort to develop a mobile payment app dubbed CurrentC, which fizzled in part because the app was more retailer-friendly than consumer-friendly. The project was contaminated with retailer priorities like avoiding credit card fees at the expense of more customer-facing priorities. After a series of setbacks and delays, merchants halted CurrentC's beta test in June.