Kroger bans Visa cards from more stores amid fee dispute

March 2, 2019

CBS News,

Kroger said it will no long accept Visa credit cards at 142 Smith’s Food and Drug stores and 108 fuel centers in seven states, citing what it calls “excessive fees.” It’s the second Kroger brand to ban Visa cards amid an ongoing dispute over the fees imposed by Visa on retailers that accept its credit cards.

Smith’s operates 55 stores in Utah, 45 stores in Nevada, 23 in New Mexico, seven in Wyoming and four stores each in Idaho, Montana and Arizona. The ban does not impact debit and prepaid cards issued by Visa-affiliated banks. The ban will go into effect on April 3, Kroger said in a statement.

The move follows a decision from Kroger last year to stop accepting Visa cards at its Foods Co. division, a subsidiary with 21 stores.

“At Smith’s, Visa’s credit card fees are higher than any other credit card brand that we accept,” Mike Schlotman, Kroger’s executive vice president and CFO, said in a statement. “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.”

Visa called the decision “unfair and disappointing.” In an email, a spokesperson wrote that Kroger was putting its shoppers in the middle of a business dispute.

For its part, Kroger said it would pass along the money saved to consumers in the form of lower prices.

Still, Visa credit cards can still be used at the overwhelming majority of the 2,800 food stores run by Kroger under brand names including King Scoopers, Harris Teeter, Fred Meyer and Ralphs.