NEW YORK – Wire services reported on December 3 that Wal-Marthas said, as of February 1, 2004, it will stop acceptingMasterCard's debit product in which a cardholder validates theirtransactions with a signature because the fees are too high.Wal-Mart is the world's largest retailer and was the lead plaintiffin a suit between the retailers and the major card associationsover the associations' requirement that retailers accept Visa andMasterCard's debit product if they accepted the credit card. Aspart of the settlement of that case, the associations cut theinterchange rates on their debit products by a third for thebalance of this year and are negotiating new rates for 2004. It ispossible that this Wal-Mart move might be part of those ongoingnegotiations. Wal-Mart spokeswoman Melissa Berryhill told wireservices that the retailer “would certainly consider any proposal”from MasterCard to lower its transaction fees, but declined tocomment on any discussions or negotiations with MasterCard.Wal-Mart said customers who use the MasterCard signature debit cardwill still be able to use that card with a personal identificationnumber. The company also will continue to accept MasterCard creditcards, and the company noted that since MasterCard signature debitcards are tied to a bank account, customers have the option ofwriting a check. Wal-Mart acknowledged that checks often cost morefor it to process than it might pay in debit interchange.

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