MA MasterCard Incorporated

Wal-Mart Stores Inc. on Monday began blocking the use of credit cards from Visa Inc. at three of its Canadian stores, marking another battle in an escalating war between the retail behemoth and credit card companies.

Wal-Mart said it was unable to agree on terms with Visa and that the fees it pays when shoppers use the cards are too high. It has stopped accepting Visa cards at locations in Thunder Bay, Ontario, and plans to "roll out the change in phases across Canada," where it has 405 stores, said Alex Roberton, a spokesman for Wal-Mart.

Mr. Roberton said the company has "not set a timeline yet" for the roll out to other Canadian stores.

"Visa remains committed to doing everything reasonable to ensure Canadians can use their cards everywhere they wish to shop—including at Wal-Mart stores," said a Visa spokeswoman. "We encourage shoppers to use their cards at the more than 5,200 stores in Thunder Bay that accept Visa."

In June, Wal-Mart posted signs at the front of its Thunder Bay stores saying it planned to shut of Visa in July. It is unclear why Wal-Mart chose Thunder Bay, a city of 110,000 on the banks of Lake Superior.

The dispute is another salvo in a long running, but recently heated battle between Wal-Mart and credit card companies, often over the fees Wal-Mart pays. Earlier this year, Wal-Mart and Kroger Co. filed separate lawsuits against Visa saying that when shoppers use new chip-enabled debit cards they should be able to type in a personal identification number, or PIN. Visa's rules require that customers also have the choice of signing. Retailers say signing is more expensive and less secure than a PIN.

In June, a federal appeals court panel threw out a $7.25 billion antitrust settlement between Visa and MasterCard Inc. and millions of retailers after determining that some of the merchants covered by the pact weren't adequately represented, ending a class-action lawsuit that had stretched over a decade.

In Canada, around 59% of people say Wal-Mart is right to cut off Visa from stores, according to a recent poll from the Angus Reid Institute, a Canadian polling agency. However, almost half of Wal-Mart shoppers surveyed who use Visa said they are less likely to shop there if the card is banned.

Write to Sarah Nassauer at sarah.nassauer@wsj.com and Robin Sidel at robin.sidel@wsj.com

(END) Dow Jones Newswires

July 18, 2016 10:55 ET (14:55 GMT)

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