In a significant announcement on Friday, retail giant Walmart revealed that it has severed ties with Capital One, thereby ending the banking company's exclusive role as issuer of Walmart's consumer credit cards. The decision comes after a period of dissatisfaction on the part of Walmart, resulting in a lawsuit filed by the retail giant against Capital One last year in an effort to terminate the agreement.

Walmart and Capital One issued a joint statement, confirming the change in their partnership. According to the statement, current cardholders can still utilize their Capital One Walmart Rewards cards, while continuing to accumulate rewards, unless informed otherwise by the company. It is important to note that Capital One will still maintain ownership and servicing of the credit card accounts.

This move follows Walmart's previous collaboration with Synchrony Financial, which ended when Walmart opted to partner with Capital One in 2019. However, as time progressed, the relationship between Walmart and Capital One soured. In 2023, Walmart filed a lawsuit against the Virginia-based banking company, citing delays in payment processing and replacement card issuance as grounds for terminating the agreement.

The ruling reached in March favored Walmart, allowing the retail giant to move forward with their intention of severing ties with Capital One. As a result, there is approximately $8.5 billion in loans within the existing Walmart credit card portfolio, as disclosed by Capital One in a recent government filing.

The question now arises as to when Walmart will announce a new banking partner to replace Capital One. The retail giant has not yet provided any indication regarding their plans for a future collaboration.

The Associated Press reached out to Walmart for comment, but there has been no response as of yet. Stay tuned for the latest updates on Walmart's pursuit of a new banking partnership and the implications for their consumer credit card holders.