Capital One May Appeal Ruling on Walmart Credit Card Partnership

A federal judge ruled Tuesday (March 26) that Walmart can end its credit card partnership with Capital One early because the bank did not provide the level of service required by the companies’ 2018 agreement.

The judge ruled that “repeated customer service failures” allowed Walmart to end the partnership, Reuters reported Tuesday (March 26).

Reached for comment by PYMNTS, a Capital One spokesperson provided an emailed statement: “We disagree with the court’s ruling and we are evaluating our appeal rights.”

The 2018 agreement between the companies made Capital One the exclusive issuer of Walmart-branded credit cards in the United States, according to the Reuters report.

In late 2022 and early 2023, Walmart accused the bank of being slow to post transactions to cardholders’ accounts and being slow to replace lost cards, the report said.

In the lawsuit that began in April 2023, the retailer argued that it could end the partnership if Capital One failed to meet any of 13 customer service standards at least five times in a 12-month period, per the report. The bank argued that Walmart could only do so if Capital One failed any single standard at least five times.

When the lawsuit began in April 2023, Walmart’s attorneys said in the suit: “Unfortunately, Capital One was consistently unable to meet the customer-service standards required by the contract.”

A Capital One spokesperson told PYMNTS at the time that the Walmart suit was an attempt to negotiate its existing partnership or end the deal prematurely.

“These immaterial servicing issues were cured by Capital One pursuant to the terms of the agreement, without harm to customers, the program or Walmart,” the spokesperson said in April 2023. “Capital One disputes that Walmart has any right to change the terms of the existing partnership midstream, and we will vigorously protect our contractual rights in court.”

The judge ruled Tuesday in favor of Walmart’s view of the terms, saying the terms were “plain and unambiguous,” according to the report by Reuters.

The companies have until April 19 to advise the court how to resolve their remaining claims and counterclaims, the judge said, per the report.