Walmart may have just done its customers a favor – a favor that consumers might not even have considered. With swipe fees costing retailers and their customers upwards of $170 billion a year, Walmart reportedly wants to continue that quest – a quest that it began in 2023 when it said it wanted to end its deal with Capital One.
Beginning in 2025, Walmart customers should see the first fruits of those labors when the company begins offering customers the option to pay directly and instantly from their bank accounts when they purchase online.
Previously, the transactions resembled digital checks and took roughly three days to settle when processed through The Automated Clearing House. Earlier this year, Walmart began offering pay-by-bank through Walmart Pay, hoping to find its way out of that loop.
Now that it feels comfortable that everything is going as planned, customers who decide to pay-by-bank will see the purchase reflected in their bank account balance instantly and Walmart will get the funds post haste.
Another consumer-side advantage of instant pay-by-bank is that it offers consumers the advantage of avoiding stacked pending transactions on their debit cards. According to Walmart's Jamie Henry, vice president of emerging payments, customers carrying low balances can be at risk of overdraft or non-sufficient funds fees from their bank.
“When the transaction processes as a real-time payment, customers get immediate access to see that payment come through, I see it hit my account and I can properly budget,” Henry said. “It’s not as if I’ve got this phantom payment out there that’s going to take place a couple of days down the road.”
Could others follow suit?
Walmart isn’t the only one fighting this fight. Frustration has mounted among merchants across the board over fees they pay for card processing to banks and networks like Visa and Mastercard.
During the 2023 Congressional session, the Credit Card Competition Act (CCCA) was reintroduced to increase competition among credit card processors. To comply with the measure, big banks would be required to accept cards from at least one network other than Visa and Mastercard.
Retailers in support of the legislation include Walmart, Amazon, Best Buy, Kroger, Target, and Shopify -- all among the list of nearly 2,000 retailers, platforms, and small businesses urging lawmakers to pass the bill. They contend that credit card processing costs are sticking it to consumers by driving up the cost of business in addition to the price shoppers pay at checkout.
In the other corner, though, are legislators who think it’s bad for small business and puts security at risk. Others say it’s corporate greed, not interchange fees, that is driving up costs for consumers.
“Big box retailers want Congress to pass the CCCA so they can pocket even more money for themselves,” claims Colorado State Rep. Sheila Lieder.
“Amazon, Walmart, Home Depot, Kroger, and Costco … are set to pocket an additional $1.2 billion from this bill while consumers are unlikely to have those savings passed on to them. We know that they will not use their windfall to lower costs at the register because we have been down this path before.”
The legislators behind the initiative say they've got "growing support," but with election season upon us and a possible change in House and Senate majorities, it might be a while before the CCCA gets out of the mud it's stuck in.