Visa Files Counterclaim to Wal-Mart in PIN Debit Card Lawsuit -- Update
June 29 2016 - 4:48PM
Dow Jones News
By Robin Sidel
Visa Inc. fired back at Wal-Mart Stores Inc. in a legal dispute
over letting customers authorize a debit-card transaction with a
signature, saying that the retailer secretly configured its payment
terminals so only personal identification numbers, or PINs, could
be used.
Visa said it received complaints from customers who could no
longer use their debit cards at Wal-Mart stores unless they had a
PIN.
Visa said the move by Wal-Mart, which took place earlier this
year, violated the contract that the companies had negotiated in
which Visa told the retailer that customers must be given the
choice of using a signature.
"Indeed, at the time of (the contract's) execution, Wal-Mart had
already hatched a plan to eliminate the signature option at its
physical locations shortly after the effective date," Visa said in
the counterclaim filing Wednesday in New York state court.
Wal-Mart sued Visa over the issue in May, saying that PINs are
more secure than signatures. Visa requires retailers to let
customers choose how they want to authorize their debit-card
transactions.
In its filing, Visa said that it was never informed by Wal-Mart
that it had eliminated the signature choice. It said it only found
out about the move after noticing "a significant drop" in its debit
transactions at Wal-Mart stores.
Visa has long required merchants to give customers the choice of
signing or entering a PIN, and the company has said some shoppers
want that flexibility.
Visa also maintains control of the transaction with the
signature method, since merchants have the ability to route PIN
transactions through a non-Visa network. Visa's rules are different
than those of MasterCard Inc., which lets merchants decide how they
want customers to verify payments, according to people familiar
with the matter.
"We have rightfully insisted on the use of PIN for debit card
transactions in our stores while Visa has continued to demand the
more fraud-prone signature verification, which is more profitable
to them," Wal-Mart said in a statement Wednesday.
Write to Robin Sidel at robin.sidel@wsj.com
(END) Dow Jones Newswires
June 29, 2016 16:33 ET (20:33 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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