Last month, Walmart sued Visa, accusing the card network of pushing the retailer to use a less-secure method of verifying debit card transactions. Now Visa is firing back with a lawsuit of its own, claiming the nation’s largest retailer is violating its contract by setting up payment terminals so that they can only accept the more secure form of validation.

At issue is the “PIN” part of the new chip-and-PIN debit cards being rolled out nationwide. Historically, third-party PIN networks have offered more affordable methods for retailers to confirm that the person using the card is the account-holder.

Visa believes that the embedded chip and the (more costly) verification provided by its network is sufficient, and has been accused of throwing its weight around to force retailers to not use the third-party PIN networks.

However, in the lawsuit filed by Visa today in a New York state court, the card company claims that Walmart violated its contract with Visa by secretly reconfiguring payment terminals to only accept PIN confirmation for transactions even if customers prefer a signature confirmation.

According to the lawsuit [PDF], the contract negotiated the between the retailer and card issuer required Walmart to give customers the choice of using PIN or signature to confirm transactions.

However, when Walmart reconfigured terminals in February, they prevented customers from being able to use signatures.

“Indeed, at the time of (the contract’s) execution, Walmart had already hatched a plan to eliminate the signature option at its physical locations shortly after the effective date,” the countersuit states.

Visa says in the complaint that Walmart never notified it that the retailer would be eliminating the signature choice. Instead, the company only found out about the change through customer complaints.

“Visa received complaints from cardholders, lost revenue due to missed transactions, and suffered damage to its reputation and brand,” the suit states.

After weeks of correspondence, Visa says Walmart ultimately modified its terminals to once again provide cardholders the opportunity to verify their identity with a signature.

However, Visa claims that instead of focusing on the contract, the retailer is attempting to find justification for its actions in regulations that don’t actually “apply to, let alone permit, the contract-breaching conduct.”

“Walmart continues to take the position that it is entitled to make PIN the exclusive means of verification for Visa debit transactions at its terminals,” the suit states. “Walmart is wrong, and Visa is entitled to a declaration that Walmart must provide Visa cardholders with a mechanism to process their Visa-branded debit card transactions without a PIN.”

Back in May, Walmart filed a lawsuit against Visa accusing the company of suggesting it verify transactions made with certain debit cards with signatures rather than a PIN in order to route the transactions through its own networks.

“The parties’ dispute exists because Walmart implemented a ‘chip-and-PIN’ protocol for debit card transactions: when consumers presented a debit card with an embedded computer chip for payment, Walmart required consumers to insert their card into a terminal that could read the computer chip and then required consumer to enter a Personal Identification Number to verify their identities,” the complaint states.

Walmart contends that PIN verification is “much more secure than signature verification.”

However, Visa believes that Walmart should be required to use the more “fraud-prone system of signature verification,” the retailer says in its complaint. These transactions would then be routed across Visa’s debit network rather than competitor networks of Walmart’s choice.

More recently, both Home Depot and Kroger have filed similar lawsuits against Visa over allegedly being forced to exclude PIN verification.