Breaking up is hard to do. Walmart wants Capital One credit cards out of its life.

Photo (c) Bernarda SV - Getty Images

The long game could be Walmart having all the financial eggs in its basket

After a four-year marriage, Walmart says it’s had all of Capital One it can take. The big box retailer is suing the credit card company over customer service.

According to sources who've seen the lawsuit, Capital One “was consistently unable to meet the customer-service standards” in five “critical” categories over a 12-month period.  Those standards included issuing replacement cards and processing payments and posting transactions in a timely fashion – standards that Walmart alleges the bank admitted in writing that it failed to meet just two months ago.

In a statement provided to ConsumerAffairs, Walmart said it looks forward to bringing its customers a new credit card option "that provides meaningful benefits and rewards soon."

But is it something cardholders should be worried about or is it just a corporate squabble? In comments emailed to ConsumerAffairs, Capital One offered this: "Walmart’s lawsuit is an attempt to renegotiate the economic terms of the partnership it agreed to just a few years ago, or end the deal early.  These servicing issues were immaterial and cured by Capital One pursuant to the terms of the agreement, without harm to customers, the program, or Walmart."

The impact on cardholders

Despite Capital One doing well in the customer service category in a recent J.D. Power satisfaction survey, the company suffered among ConsumerAffairs reviewers regarding customer service.

Some Capital One credit card holders who had Walmart-branded cards have had all they can take, too. One ConsumerAffairs reviewer called the company “a bunch of clowns.” Another said their service was “pathetic.” 

Nonetheless, consumers who have one of the Walmart-branded Capital One cards have to carry on at least for a while. Walmart told ConsumerAffairs that cardholders should not experience any disruptions in service and can continue to use their existing Capital One Walmart credit cards.

Can Walmart get all the eggs in one basket?

This whole ordeal may be part of Walmart’s desire to have every penny coming from someone using one of its credit cards directly into its pockets. Walmart has made noise about offering financial services products for years, and in January, announced plans to acquire two companies that signal a definite move in that area.

One of those companies specializes in earned wage access, a benefit that allows employees to receive part of their paycheck before payday. The other is a neo bank, basically a tech company/online banking services combo that partners with an existing, traditional bank.

However, the biggest component of Walmart’s fintech reveal is credit cards. Even though it had a pre-existing deal with Capital One, the retailer is currently testing “One,” a banking platform it offers its employees with hopes of eventually offering the service to customers. 

Walmart's plans are pretty much like shooting fish in a barrel.

“They don’t need to go acquire customers, they already have them,” David Donovan, executive vice president of financial services for the Americas at digital consulting company Publicis Sapient, told BankingDive. “They just have to roll that service out and make it really easy and simple. It’s like, build it, and they’ll come.”

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