Walmart, Capital One End Consumer Credit Card Agreement
Capital One Financial will no longer be the exclusive issuer of Walmart-branded credit cards, the companies said on Friday, as they scrapped their agreement following disputes, reports Reuters. The world's largest retailer had accused Capital One of being too slow in updating transactions in cardholders' accounts and failing to promptly replace lost cards. Walmart partnered with Capital One in 2018 after ending its two-decade long partnership with Synchrony Financial. Capital One started issuing the store-branded credit cards from 2019. The problems were uncovered in late 2022 and early 2023, while a lawsuit began in April 2023. Capital One will retain ownership and servicing of the existing credit card portfolio of about $8.5 billion of loans.
Total Retail's Take: The two industry giants announced their split in a very brief press release last Friday. A federal judge ruled in March 2024 that Walmart could end its credit card partnership with Capital One early because the bank failed to provide the required level of customer service. Capital One, at the time, had said it disagreed with the decision and was evaluating its right to appeal. While Capital One and Walmart have ended their partnership, cardholders can continue to earn and redeem rewards, and previously accrued rewards will retain their value, the companies said.
Payment providers are surely leaping to be considered by Walmart as the retailer looks for a new credit card issuer. Capital One is taking a huge hit in its loss of the leading retailer as a partner, but its loss will be another financial institution's gain. Time will tell which payment partner Walmart decides to trust and the vetting process is sure to be intensive to ensure the business won't be burned again by what it deems unsatisfactory financial service.
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Kristina Stidham is the digital content director at Total Retail and sister brands Women in Retail Leadership Circle and Women Leading Travel & Hospitality at NAPCO Media. She is passionate about digital media and handles video, podcast and virtual event production for all brands. You can often find her at WIRLC, TR, WLT&H or industry events with her camera and podcasting equipment—or at home on Zoom—recording interviews with thought leaders and business executives.
Kristina holds a B.A. in Media Studies and Production from the Temple University Klein College of Media and Communication in Philadelphia. Go Owls! When she's not in the office, she loves to go on long walks, sing around the house, hangout with her family and two pet guinea pigs, and travel to new places.
