Walmart’s Secret Scheme: A Threat to Your Financial Security

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The following content is sponsored by the Electronic Payments Coalition.

Walmart hopes you are already focused on holiday prep and not paying attention to what’s happening on Capitol Hill.

For years, Walmart and other megaretailers have lobbied senators and congressmen for favors. Walmart alone employs approximately 1.6 million people in the United States, and in their last quarter had revenue of over $160 billion. You can see why they have an outsized ability to influence elected officials.

Their latest request is to overhaul how credit card payments are routed during purchases. They’d like the Federal Reserve to implement new rules that favor big-box stores, and Sen. Dick Durbin (D-IL) and others are happy to oblige. Sen. Durbin introduced the “Credit Card Competition Act” this summer and is pushing it amongst his colleagues. He has even got Republican Sen. Roger Marshall of Kansas to sign-on. The bill will give unprecedented power to the federal government to control consumers’ credit card transactions. Right now, retailers and financial institutions have negotiated agreements about how payments operate, but this will upend all of that and force companies like Visa and Mastercard to hand over their technology for free.

These new rules, if the legislation passes, will come at a significant cost for consumers.

Walmart wants to use these new rules specifically to cut corners on data security. Under today’s laws, if you pay for something at a store with a credit card, the retailer currently has to use the routing network of whatever card you give them. The retailers have a right not to accept certain cards, but if they choose to, they have to accept those cards’ terms and security requirements.

So, if you picked out a Mastercard or Visa card because of its security guarantees and perks, you know that your financial information is being safely routed over their network with their 21st century technology. This new law on the table will end that security.

If it moves forward, retailers will be able to ignore your preferred network and instead pick an alternative network of their choice. It’ll be cheaper but also lead to an increase in fraud and a headache for all involved.

Fraud is, unfortunately, on the rise. Every year hundreds of millions of individuals are affected by data breaches, often due to retailer negligence. In the last five years alone, fraud losses have more than doubled. In 2022, $12 billion was lost to fraud in the United States. It’s likely you yourself have been a victim of fraud. You may remember the Target data breach that compromised about 40 million credit and debit cards. Or when hackers used a vendor’s username and password to access Home Depot’s customer financial information. It seems every year there’s another major breach at a retailer.

Yet, Walmart, Target, and other big-box stores still want to cut corners on security. They know they will not be on the hook for consumer fraud. Your bank or credit union has guaranteed payment to the retailer, and it’s these financial institutions that will be hurt when fraud skyrockets further.

It’s important your elected officials understand the significant risk that comes with this bill. Please tell them to stand up to Walmart and oppose the new credit card routing mandates.

Visit and tell your lawmakers to vote NO on credit card routing mandates!


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