In a joint statement released on Friday, Walmart announced that it has terminated its partnership with Capital One, making the banking company no longer the exclusive issuer of Walmart's consumer credit cards. However, cardholders can still utilize their Capital One Walmart Rewards cards and continue to earn rewards, unless they are notified of any changes. Capital One will retain ownership and servicing of the credit card accounts.

This decision comes after Walmart's 2019 partnership with Capital One, which was established after ending their previous credit card deal with Synchrony Financial. The co-branded rewards card offered customers benefits such as cash back on in-store purchases and online orders for pickup or delivery, according to the program's website. Initially, the deal was set to run through 2026.

However, friction began to arise between Walmart and Capital One, leading to a lawsuit filed by Walmart against the McLean, Virginia-based company in 2023. Walmart alleged that Capital One was taking too long to process payments and mail replacement cards, and that the banking company had admitted to failing to meet some of Walmart's service standards. Capital One, on the other hand, argued that the service issues were not sufficient grounds to terminate the partnership, claiming that Walmart was seeking to "end the deal early."

A government filing made by Capital One on Friday revealed that there are approximately $8.5 billion in loans within the existing Walmart credit card portfolio. As of now, it remains unknown when Walmart will announce a new banking partner.

The Associated Press has reached out to Walmart for additional comments, but no response has been received as of the time of writing.

This recent development has disrupted the credit card landscape for Walmart, and it now remains to be seen how the retail giant will navigate the search for a new banking partner to meet the financial needs of its customers.