Walmart Sues Visa Over Signature Requirements

Walmart Sues Visa Over Signature Requirements

May 11, 2016         Written By Bill Hardekopf

Walmart is once again battling the payment card industry.

In October, it criticized the new EMV cards, alleging they would lead to longer holiday shopping lines. On Tuesday, the retail giant sued Visa in New York.

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Walmart wants to require customers to use their personal identification numbers (PINs) at terminals when they are using their debit cards, but the credit card issuer wants to allow customers to sign for their purchases.

Visa, according to The Wall Street Journal, operates differently than MasterCard. While MasterCard allows retailers to choose how customers verify their identity, Visa wants to give consumers the choice between PIN or signature.

Signature transactions cost Walmart about five cents more than PIN transactions, but company representatives say they only care about consumer safety. “This suit is about protecting our customers’ bank accounts when they use their debit cards at WalMart,” the Bentonville, Ark.-based retailer said in a statement, and they allege PIN transactions are more secure than those using a signature.

Visa “has demanded that we allow fraud-prone signature verification for debit transactions in our U.S. stores because Visa stands to make more money processing,” Walmart said.

Currently, Walmart prompts customers to enter their PIN when using debit cards at the checkout, but the shopper can override this prompt and sign instead. Approximately 10% of debit card users are opting to sign.

While retailers and security experts agree that all card transactions would be safer if consumers entered their PINs, most banks in the United States allow signatures, as they believe shoppers don’t want to have to remember their PIN.

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The information contained within this article was accurate as of May 11, 2016. For up-to-date
information on any of the terms, cards or offers mentioned above, visit the issuer's website.


About Bill Hardekopf

Bill Hardekopf is the CEO of and covers the credit card industry from all perspectives. Bill has been involved with personal finance for over 15 years. He is a frequent contributor to Forbes, The Street and The Christian Science Monitor.
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