Visa U.S.A and MasterCard International each announced card acceptance tests with Sam's Club, the nation's largest warehouse retailer.

The division of Wal-Mart Stores Inc. had previously accepted only Discover cards, having worked out a deal to pay no interchange fees on transactions, industry experts said.

But the bank card associations have been aggressively pursuing the warehouse chains, which demand low transaction fees in keeping with their thin margins on sales. MasterCard said the wholesale chains' sales were $50 billion to $60 billion last year, making them one of the biggest remaining opportunities for credit card growth.

There was some confusion in the announcements last week. An "exclusive" Visa arrangement came to light Thursday, and a perturbed MasterCard followed Friday with its own announcement.

A spokeswoman for Wal-Mart in Bentonville, Ark., initially said Sam's Club would take only Visa at selected test sites. "A majority of people carry Visa, and they will be very pleased," the spokeswoman added.

The exclusivity seemed surprising because on Sept. 30, MasterCard was named the brand for the credit card Chase Manhattan Bank agreed to issue for Wal-Mart.

Sam's Club amended the initial report by saying it was also working with MasterCard, taking its cards in 31 New York, New Jersey, and Northern California stores.

Visa will be accepted in 32 Sam's Clubs in Atlanta, Los Angeles, Seattle, Boston, and Honolulu - in addition to a store in Alaska that has been testing Visa for two years.

Fred Gore, MasterCard's senior vice president for acceptance, said Wal- Mart's preoccupation with other matters may have caused the garbled credit card messages. The company "has been moving its processing to First Data Corp. and has been focused on the platform to make sure that it runs," Mr. Gore said. "Obviously, there has been a lot of activity in the marketplace around Wal-Mart."

He said the Chase-MasterCard cobranding deal was "a hurt for other players," but MasterCard agrees that accepting both brands at Sam's Club "makes a lot of sense."

MasterCard has an exclusive arrangement with BJ's Wholesale Club and will offer Sam's Club a lower interchange rate than Visa.

Sam's Club had 1995 sales of $20 billion at 436 locations. To offer credit card convenience without having to pay outside bank and clearing fees, it launched a private-label card last year with GE Capital Services, Stamford, Conn.

James L. Accomando, president of Accomando Consulting Inc., Fairfield, Conn., said Visa might get away with higher interchange pricing because it has 62% of the bank card market.

Patricia Hudson, president of Porges/Hudson Marketing Inc. in San Francisco, said Sam's Club 0may be playing the two associations off each other to get a better deal and to see if one performs better than the other.

"We are very pleased to have the ability to offer our payment delivery to Sam's customers," said Armen Khachadourian, Visa U.S.A.'s senior vice president of merchant relations. "Once Sam's has offered consumers payment options, it will see incremental sales, which will enable them to compete more effectively."

Keith Morris, a spokesman for Wal-Mart, said, "We are looking to accept both MasterCard and Visa in the future." Both pilots are designed to "measure the impact of providing this service to our members."

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.