In a major development, Walmart has terminated its partnership with Capital One, the exclusive issuer of Walmart consumer credit cards, citing concerns over poor customer service. The termination comes after Walmart accused Capital One of sluggish transaction posting and delays in replacing lost cards.

Walmart had previously partnered with Capital One in 2018, following the end of a long-standing relationship with Synchrony Financial. Capital One had started issuing store-branded credit cards from 2019. However, problems began to emerge in late 2022 and early 2023, leading to a lawsuit that commenced in April 2023.

A federal judge ruled in March 2024 that Walmart had the right to end the credit card partnership with Capital One ahead of schedule due to the bank's failure to meet customer service requirements. Capital One, on the other hand, expressed disagreement with the decision and stated that it was evaluating its options to appeal.

Despite the termination of the partnership, Walmart and Capital One have assured cardholders that they can still earn and redeem rewards. Previously earned rewards will also retain their value, ensuring that customers' existing benefits are preserved.

Meanwhile, it is worth noting that Capital One had announced a separate agreement earlier in the year to acquire Discover Financial Services, a credit card issuer, in a deal valued at a staggering $35.3 billion. The acquisition aims to create a global payments powerhouse for the company.

The termination of the partnership between Walmart and Capital One highlights the significance of providing high-quality customer service in maintaining successful financial partnerships. As both companies move forward independently, the focus will now shift toward addressing the customer service issues that led to this separation.