Washington, D.C. – Capital One and Walmart have announced the termination of their partnership that designated Capital One as the exclusive issuer of Walmart’s consumer credit cards. This move comes after a collaboration that began in 2018 when Walmart ended its long-standing partnership with Synchrony Financial. Capital One subsequently started issuing Walmart-branded credit cards in 2019. The termination of the agreement was revealed in a joint press release by both companies on Friday. Despite this change, cardholders can still earn and redeem rewards as before, and any previously accumulated rewards will retain their value.
The partnership began to show cracks due to disputes between the two parties. Walmart accused Capital One of delays in updating transactions in cardholders’ accounts, as well as slow responses in replacing lost credit cards. These disagreements culminated in a lawsuit filed in April 2023, prompting a legal battle that led to the current separation of the two entities.
In March 2024, a federal judge ruled in favor of Walmart, allowing the retail giant to end its partnership with Capital One earlier than expected due to the lender’s failure to meet the required customer service standards. Capital One expressed disagreement with the ruling and is contemplating a potential appeal. It is crucial to note that the existing credit card portfolio from the collaboration represents approximately $8.5 billion in consumer loans.
As the two companies part ways, Capital One will retain ownership and servicing of the credit card accounts. Future information will be communicated to Walmart credit card holders in the coming months regarding the transition. While Capital One and Walmart have decided to terminate their agreement, customers can still use their Walmart rewards cards as usual at this time.
Looking ahead, Capital One recently announced a significant deal to acquire Discover Financial Services in a $35.3 billion all-stock transaction. This move aims to create a global payments powerhouse but has come under scrutiny from the Biden administration. Regulatory bodies such as the Department of Justice and the Consumer Financial Protection Bureau have signaled their intent to assess the potential impact of the merger on consumers. As this process unfolds, both companies will navigate the changing landscape of the financial services industry.