VISA says Woolworths' decision to remove the credit option when consumers pay with a debit card is ''extremely disappointing'' and reduces competition.
The country's biggest retailer will route all debit transactions via the eftpos network, in a bid to save millions in fees.
Woolworths owns Big W, BWS, Dan Murphys, Dick Smith, Tandy, Woolworths Petrol and Thomas Dux.
The company announced the change yesterday. It will affect scheme debit cards issued by banks and credit unions that feature either the Visa or MasterCard logo as well as the word debit to differentiate them from credit cards.
Customers using these cards have had the option of using the credit button when making payments at Woolworths stores.
They will now need to press the cheque or savings buttons to access their funds through the Australian-owned eftpos network.
Visa Australian managing director Chris Clark said eftpos already enjoyed a 75 per cent market share of debit card transactions and the changes were unfortunate for consumers.
''It puts into question the competitive landscape for the entire payments industry when a major dominant retailer can decide not to accept a payment solution that is strongly supported by the public,'' he said.
Mr Clark said Visa disagreed with the claim that the acceptance costs of Visa Debit had contributed to cost pressures.
