Walmart's high-profile fight with credit company Visa is apparently still raging, as the retailer announced Thursday that all of its stores in Manitoba will no longer accept Visa cards starting next month.

Beginning Oct. 24, shoppers will no longer be able to use their Visa cards to pay for purchases in all 16 stores in the province. The move comes after Walmart began the phasing out process in July, when the retailer banned Visa cards from its three stores in Thunder Bay, Ont.

The move could spread to other Walmart locations in other provinces, a spokesman for Walmart said, without elaborating. The spokesman said Manitoba was selected for this round, because stores in the province are "most ready" to phase out Visa, again without elaborating.

Walmart has more than 400 stores across Canada.

Canadian retailers pay among the highest interchange fees in the world. (Ryan Remiorz/Canadian Press)

For its part, Visa Canada described the retailer's move as "disappointing."

"We know from our experience in Thunder Bay that consumers want the option to use the payment method of their choice when shopping – including at Walmart stores," a spokesperson for the company said, adding that "Visa remains committed to actively working with Walmart so that Canadians can use their Visa cards wherever they wish to shop."

The dispute between the two companies bubbled over in June, when Walmart announced its intention to phase out Visa unless it got a better deal on fees.

Walmart claims the fees Visa charges the retailer to process payments are too high, saying it pays more than $100 million a year in such charges and wants that number lowered. Visa, meanwhile, counters that Walmart already gets some of the lowest fees it has offered to any retailer in Canada.

"We're committed to continuing negotiations with Visa, and we are still hopeful to reach an agreement‎," the Walmart spokesman said.

Interchange fees

The battle comes against a backdrop of increased scrutiny over interchange fees, a term used to describe the amounts that credit processors charge retailers for processing every transaction.

Typically, they are expressed as a percentage of the total value of the goods being sold. While shoppers don't pay those fees directly, they are usually factored into the price, and Canadian interchange fees are among the highest in the world.

MasterCard and Visa control the vast majority of the market, and they agreed two years ago to cap their fees at an average of 1.5 per cent, something the Department of Finance acknowledged Wednesday that they have done — though it added that the government is still making a "further assessment" of the issue.

Even though they've come down a little, retailers say the fees are still unreasonably high.

"These excessive interchange rates mean that Canadian consumers pay at least $4.5 billion more for all credit purchases each year than they would if our rates were comparable to those in the EU," said Karl Littler, vice-president of public affairs at the Retail Council of Canada.

"At the current 1.50 per cent average rate, over the four remaining years of the voluntary agreement, Canadians will pay at least $18 billion more than they should."

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According to research firm Value Penguin, interchange fees average 1.76 per cent in North America. In Europe, they average 0.96 per cent. In France, where they are heavily regulated, the average is as low as 0.22 per cent per transaction.

The president of the Retail Council of Canada says more needs to be done to level the playing field.

"Nobody gets a medal for clearing a two-foot bar," Diane J. Brisebois said, referring to the recent move to an average of 1.5 per cent for interchange fees.

"The real issue is an absence of both competition and regulation that has allowed the credit card networks to overcharge merchants in Canada with fees five times what they should be."