Capital One and Walmart made waves in the financial world with their recent announcement that they were ending their exclusive consumer credit card agreement. This move marks the culmination of a partnership that began in 2018, initiated after Walmart severed its ties with Synchrony Financial, its credit card issuer for over two decades. Capital One stepped in as the exclusive issuer of Walmart’s consumer credit cards, rolling out Walmart-branded credit cards to customers starting in 2019.
Despite the dissolution of their card partnership, both companies assured customers that there would be no immediate changes. Cardholders can continue to earn and redeem rewards as usual, and previously accrued rewards will retain their value. Moreover, customers can still use their Capital One Walmart Rewards Card anywhere Mastercard is accepted, while the Walmart Rewards Card remains valid for purchases exclusively at Walmart stores.
While Capital One will retain ownership and servicing of the credit card accounts, additional information will be provided to Walmart credit card holders in the coming months. The existing credit card portfolio, which represents approximately $8.5 billion in consumer loans, will remain under Capital One’s purview.
The decision to terminate the partnership stemmed from disputes between Walmart and Capital One that arose in late 2022 and early 2023. These disagreements centered primarily on issues related to transaction updates and delays in card replacements. As tensions escalated, Walmart filed a lawsuit against Capital One in April 2023. In March 2024, a federal judge ruled in favor of Walmart, granting the retailer the right to end the partnership earlier than stipulated in the contract due to Capital One’s failure to meet customer service standards.
Although Capital One expressed disagreement with the court’s decision and contemplated the possibility of an appeal, both companies ultimately agreed to part ways. A Capital One spokesperson emphasized that the decision was made with the best interests of customers in mind, ensuring a smooth transition for eligible Walmart Card customers to one of Capital One’s flagship branded rewards products.
Meanwhile, Capital One’s proposed acquisition of Discover Financial Services in a $35.3 billion all-stock deal has attracted regulatory scrutiny. Concerns about the potential impact on consumers prompted the Biden administration, through the Department of Justice and the Consumer Financial Protection Bureau, to indicate their intention to evaluate the merger.
The termination of the Capital One-Walmart partnership marks the conclusion of a significant chapter for both companies in the realm of consumer finance. As they navigate the aftermath of this decision and address potential regulatory challenges, stakeholders will closely monitor developments to gauge the implications for the credit card industry and the broader financial landscape.