Kroger Decides to Ban Visa Credit Cards at More Stores

Well known grocery chain store Kroger is planning on something that might affect a lot of people.

The chain wants to stop accepting Visa credit cards starting on April 3rd. The move would affect 142 Smith’s Food & Drug supermarkets as well as 108 gas stations in seven states.

The Smith’s locations are in Utah, Nevada, New Mexico, Wyoming, Idaho, Montana and Arizona.

It was this past August that Kroger had banned the acceptance of Visa credit cards at about two dozen locations in California.

According to the company, the move is to save on high costs associated with Visa’s “interchange rates and network fees.”

Kroger’s CFO Mike Schlotman, also said that the company would not rule out continued expansion of the ban. “No option is off the table.”

“Visa has been misusing its position and charging retailers excessive fees for a long time,” said Mike Schlotman. “They conceal from customers what Visa and its banks charge retailers to accept Visa credit cards. At Smith’s, Visa’s credit card fees are higher than any other credit card brand that we accept. Visa’s excessive fees and unfairness cannot continue to go unchecked. That’s why, starting April 3, Smith’s will accept all forms of payment except Visa credit cards.”

The stores will still except all debit cards which include Visa debit cards.
Matt Schulz, chief industry analyst at CompareCards.com, which is owned by mortgage lender LendingTree, remarked last August to USA TODAy, “(It is) basically a power move to try and force Visa to knock those fees down. The battle over swipe fees has been brewing for some time and this move by Kroger shows that it is about to escalate.”

“Retailers argue that the (swipe fees) raise the prices of their items because the cost gets passed on to consumers or the retailers have to eat the cost themselves,” said Kimberly Palmer, credit card expert at personal finance site NerdWallet.com.

“Grocery is a competitive business and our ability to keep prices low for our customers depends on controlling costs,” said Kenny Kimball, president of Smith’s. “To help our customers through this transition, we have great offers inside our Smith’s stores today, including double rewards points towards fuel purchases and other promotions to save on groceries.”

Disclaimer: We have no position in Kroger Co. (NYSE: KR) and have not been compensated for this article.