Kroger Considers Expanding Ban On Visa Card Acceptance

Kroger might expand on a ban on Visa credit cards imposed by its unit in California — proof that retailers are ready to fight back against the $90 billion they pay in swipe fees every year.

This week, Foods Co., a subsidiary of grocery giant Kroger, has announced that 21 of its grocery stores and five of its gas stations in Central and Northern California are officially through with Visa branded credit cards as a form of payment, effective August 14, 2018.

According to a release by Foods Co., Visa is officially off the payments menu in-store so that the chain can stave off some of the high costs associated with the card when it comes to interchange rates and network fees.

“Visa’s rates and fees are among the highest of any credit card brand,” Foods Co. noted in their release, saying that the savings netted by pulling the plug on Visa will be passed along to consumers in the form of everyday low prices on high priority goods for grocery shoppers.

The move will only effect Visa credit customers — Visa debit cards can still be used for purchases.

Now, according to the Chicago Tribune, Kroger CIO Chris Hjelm said in an interview that the parent company might follow Foods Co.’s lead.

“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 said. 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.”

Shares of payment companies — including Visa, American Express and Mastercard — dropped on Monday (July 30).

This news comes after Walmart’s recent announcement that it was abandoning Synchrony Financial after the two couldn’t agree to economic terms.