Kroger mulls nationwide ban of Visa cards

Kroger mulls nationwide ban of Visa cards
Kroger mulls nationwide ban of Visa cards
Posted at 10:06 PM, Aug 01, 2018
and last updated 2018-08-01 22:06:00-04

(WMC) - Kroger has started banning Visa credit cards at some of its stores, and could expand the ban across the country.

Kroger will stop accepting Visa cards at its Foods Co. stores in California on August 14.

“Visa's rates and fees are among the highest of any credit card brand,” Foods Co. said in a statement  to CNBC Monday. “The savings will be passed along to Foods Co. customers in the form of low everyday prices on the items shoppers purchase most.” 

Kroger spokesman Chris Hjelm told Bloomberg that the company may do the same for its primary chain of stores.

“It’s pretty clear we need to move down this path, and if we have to expand that beyond Foods Co., we’re prepared to take that step,” Hjelm told Bloomberg. "When the amount retailers pay in card fees gets out of alignment, as we believe it is now, we don’t believe we have a choice but to use whatever mechanism possible to get it back in alignment.”

Visa announced in a statement that they were disappointed by the move.

"When consumer choice is limited, nobody wins," Visa said in a statement to CNBC. "Our goal is to protect the interests of our cardholders to sure they can use their Visa credit cards wherever they shop. Visa remains committed to working with Kroger to reach a reasonable solution."

Matt Schulz, Chief Industry Analyst for CompareCards, said the battle over credit card swipe fees has been brewing for some time.

"This move by Kroger is a clear sign that some retailers are ready to escalate,” Schulz said. “There's a ton of money at stake on both sides, but there's also risk for retailers. If they no longer accept Visa credit cards, they could drive customers away over an issue that very few Americans care about."

Schulz called the move a gamble.

"The average consumer doesn't know anything about swipe fees. All they would know is that their favorite grocery store no longer accepts their favorite credit card. That certainly seems like it could cost them some business, but that clearly is a gamble that Kroger and others are willing to take."

For now, no Mid-South stores are impacted. Kroger officials issued the following statement to WMC Action News 5:

"As we redefine the grocery customer experience, we are always looking for partnerships that create customer value. At this time, our Kroger Delta Division Stores continue to accept Visa Credit." 

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