Visa Files Counterclaim to Wal-Mart In PIN Debit Card Lawsuit

By Robin Sidel 

Visa Inc. fired back at Wal-Mart Stores Inc. in a legal dispute over letting customers authorize a debit-card transaction with a signature, saying that the retailer secretly configured its payment terminals so only personal identification numbers, or PINs, could be used.

The financial services company said it received complaints from customers who could no longer use their debit cards at Wal-Mart stores unless they had a PIN.

Visa said the move by Wal-Mart, which took place earlier this year, violated the contract that the companies had negotiated in which Visa told the retailer that customers must be given the choice of using a signature.

"Indeed, at the time of (the contract's) execution, Wal-Mart had already hatched a plan to eliminate the signature option at its physical locations shortly after the effective date," Visa said in the counterclaim filing Wednesday in New York state court.

Wal-Mart sued Visa over the issue in May, saying that PINs are more secure than signatures. Visa requires retailers to let customers choose how they want to authorize their debit-card transactions.

In its filing, Visa said that it was never informed by Wal-Mart that it had eliminated the signature choice. It said it only found out about the move after noticing "a significant drop" in its debit transactions at Wal-Mart stores.

Visa maintains control of the transaction with the signature method, since merchants have the ability to route PIN transactions through a non-Visa network. Visa's rules are different than those of MasterCard Inc., which lets merchants decide how they want customers to verify payments, according to people familiar with the matter.

Write to Robin Sidel at [e-mail]

(END) Dow Jones Newswires

June 29, 2016 14:03 ET (18:03 GMT)

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