Capital One failed to meet customer care standards in five “critical” categories over a 12-month rolling period, the lawsuit alleged.
The bank, in February, admitted in writing that it failed to meet the standards, Walmart alleged.
In a statement to Banking Dive, a Capital One spokesperson called Walmart’s lawsuit “an attempt to renegotiate the economic terms of the partnership it agreed to just a few years ago, or end the deal early.”
“These immaterial servicing issues were cured by Capital One pursuant to the terms of the agreement, without harm to customers, the program, or Walmart,” the spokesperson said.
According to the spokesperson, Capital One disputes Walmart’s right to change the terms of the existing partnership, and the bank will “vigorously defend our contractual rights in court.”
In 2018, Capital One partnered with Walmart to issue the retailer’s credit cards. According to The Wall Street Journal, the agreement will last until at least 2026.
According to The Journal, the retailer recently informed Capital One executives that it wanted to renegotiate certain terms of the card contract, including the loss-sharing agreement.
According to the sources, Walmart also told the bank that it wanted its fintech unit to be involved in card issuance.
The retailer is beta-testing a banking platform called One with employees and plans to offer the service to customers in the future.
Capital One, on the other hand, refused to comply with Walmart’s demands, according to The Wall Street Journal.
According to Bloomberg, the Bentonville, Arkansas-based retailer plans to introduce a new credit card option soon.
Existing cardholders will not be affected and can continue to use their Capital One Walmart credit cards, according to a Walmart spokesperson.