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Walmart, Capital One end consumer credit card agreement

Published 05/24/2024, 09:25 AM
Updated 05/24/2024, 12:46 PM
© Reuters.

(Reuters) -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.

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 (NYSE:WMT) had tied up with Capital One in 2018 after ending its two-decade long partnership with Synchrony Financial (NYSE:SYF). 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.

A federal judge had ruled in March 2024 that Walmart can 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 on Friday.

"The parties determined that the best path forward for our customers is to end the current partnership and convert existing eligible Walmart Card customers to one of Capital One's flagship branded rewards products," a Capital One spokesperson said in an emailed statement to Reuters.

© Reuters. FILE PHOTO: View of Walmart's newly remodeled Supercenter, in Teterboro, New Jersey, U.S., June 7, 2023. REUTERS/Siddharth Cavale/File Photo

Capital One will retain ownership and servicing of the existing credit card portfolio of about $8.5 billion of loans.

Separately, Capital One had agreed earlier in the year to buy credit card issuer Discover Financial Services (NYSE:DFS) in a $35.3 billion all-stock deal to create a global payments giant.

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