The news: Walmart wants discretion to refuse cards based on their issuer at the point-of-sale, per an objection filed in response to the proposed settlement to end the decadeslong interchange fee legal battle.

Walmart wants to split big merchants apart from the suit’s plaintiffs, arguing that the plaintiffs’ lawyers have demonstrated a “persistent disregard for the interests of large national merchants.”

“Allowing large national merchants to reject certain card types, but not issuers, still precludes any competition between issuers for merchant acceptance,” Walmart wrote.

How we got here: Powerful merchants like Walmart want to minimize the card fees at checkout set by networks. 

While these retailers concede that asking consumers to avoid using premium cards is unrealistic, given the networks’ duopoly, Walmart instead wants to leverage its massive scale to bring individual issuers to the negotiating table to bring costs down.

Will it work? While new types of fee agreements with banks remain entirely speculative at this point, it’s unclear whether a patchwork quilt of deals with issuers would benefit Walmart. 

Discontinuing acceptance of certain issuers at the POS will likely cause just as much friction for consumers as the purportedly “useless” changes to the honor all cards rule, especially if Walmart stands alone in its issuer blacklist. 

It could persuade shoppers to adopt its OnePay system in lieu of using their preferred card in an ecosystem play but likely would anger shoppers who have loyalty to the rewards-rich cards that no longer are accepted. 

In the meantime, the most certain consequence of Walmart’s objection is yet another roadblock to resolving one of the longest-running and most consequential lawsuits in the payments space.