Sam's Club Agrees to Take MasterCard

Wal-Mart Unit Won't Take Visa

In accepting MasterCard, Wal-Mart Stores wholesaler Sam's Club broadens payment options beyond Discover and its own in-house cards. (By Andrew Harrer -- Bloomberg News)

Sam's Club, the membership-only retailer owned by Wal-Mart Stores Inc., is accepting MasterCard at its warehouse stores for the first time. The company will continue not to take Visa, the No. 1 credit-card brand.

Beginning today, Sam's Club will process purchases using MasterCard at its 589 retail locations in the United States, Puerto Rico and Canada, the Bentonville, Ark.-based company said in a statement. Sam's Club has more than 47 million U.S. members, who gain access to its stores by paying a fee.

To date, the chain has accepted credit cards only from Discover Financial Services LLC, a unit of Morgan Stanley. It also has an in-house card. Sam's Club accepts Visa and MasterCard debit cards, which withdraw funds directly from checking accounts, and takes both brands for online purchases.

Wal-Mart is the world's biggest retailer. Costco Wholesale Corp., its rival in the warehouse retail business, accepts only American Express cards in its stores.

MasterCard's shares have more than doubled since the company's initial public offering in May. Profit climbed 82 percent in the third quarter after it increased fees for cross-border transactions and cardholders' spending increased 15 percent. Visa International announced plans last month to hold its own share sale within the next 12 to 18 months, after it completes a restructuring.

MasterCard Inc., headquartered in Purchase, N.Y., had 818 million cards in use as of Sept. 30. Visa has 1.46 billion cards in circulation, according to its Web site.

Wal-Mart led a group of retailers in suing MasterCard and Visa in 1996 for requiring merchants to accept what they claimed were overpriced debit-card transactions authenticated by customer signatures, in violation of U.S. antitrust law. The credit-card companies settled that case in April 2003 for $3 billion.

Later in 1996, Wal-Mart stepped up pressure to reduce fees by saying it would stop accepting some of MasterCard's debit transactions because of the cost of processing them. The retailer started accepting them again six months later after a new agreement was reached between the companies.

MasterCard spokeswoman Barbara Coleman said yesterday's announcement was a "brand decision" and not fee-based.

Sam's Club members "have been asking for more payment options," Coleman said. "When you look at Sam's Club and MasterCard, the brand alignment is very, very close."

MasterCard doesn't disclose the details of its financial arrangements, she said.

MasterCard shares, which were initially priced at $39 each on May 24, declined 24 cents to $88.20 in composite trading on the New York Stock Exchange. Wal-Mart fell 64 cents to $46.39.