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Wal-Mart getting involved another PR from Scottrade-- Wal-Mart Branded Cards to Transition to MasterCard--2nd Update
3 days 1 hours 49 minutes ago - DJNF


By Andrew R. Johnson
Wal-Mart Stores Inc.'s co-branded credit cards will soon carry MasterCard Inc.'s logo under a deal the retailer struck with General Electric Co.'s banking arm to switch from Discover Financial Services.
Wal-Mart said its credit-card portfolio will convert to MasterCard later this summer, while credit cards marketed in the name of the retailer's Sam's Club division will begin switching in June, a spokeswoman for Wal-Mart said.
Co-branded cards such as Wal-Mart's typically offer discounts and other perks for shopping at the retailer's stores. The cards are issued by a bank, which in the case of Wal-Mart is GE Capital Retail Bank. GE last month said it would spin off the consumer-finance unit, to be called Synchrony Financial, through an initial public offering.
Credit-card companies often battle for such partnerships when they come up for renewal. MasterCard in recent years has been battling to win more co-branded partnerships to boost transaction volume over its payments network.
A spokesman for Purchase, N.Y.,-based MasterCard said the company has a "strong commercial relationship with Wal-Mart."
The switch to MasterCard won't affect customers who have Discover-branded cards from using them at Wal-Mart or Sam's Club stores, a spokesman for Riverwoods, Ill.-based Discover said.
Discover has had a partnership with Wal-Mart since 2005, the Wal-Mart spokeswoman said.
While big retailers like Wal-Mart partner with networks such MasterCard for credit-card programs, they have also tussled with networks for several years over fees merchants pay to accept cards. They argue that MasterCard and its larger rival Visa Inc. have conspired to set the fees at arbitrarily high levels.
To attempt to put such issues to bed, Visa and MasterCard reached a settlement in 2012 with merchants who brought class-action lawsuits against the card networks in 2005.
The deal, which stands to deliver $5.7 billion to millions of merchants, was approved by a federal court judge in December, but many retailers have appealed.
They argue the settlement wouldn't stop swipe fees from rising in the future and grants overly broad releases to Visa and MasterCard from future litigation.
Wal-Mart filed a lawsuit against Visa last month alleging the credit-card network's swipe fees violated antitrust regulations. The retailer is seeking at least $5 billion in damages from Foster City, Calif.-based Visa.
Visa and MasterCard set swipe fees, but they are collected by banks that issue their cards.
Corrections & Amplifications: A previous version of this article incorrectly said that Wal-Mart Stores was switching its co-branded credit cards from Visa Inc.
Write to Andrew R. Johnson at [e-mail]

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April 04, 2014 10:29 ET (14:29 GMT)
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