Kroger, the United States' largest supermarket chain by revenue, is extending a ban on Visa credit cards to its Smith's Food and Drug Stores division in protest at "excessive" interchange fees.
The company last year initiated a Visa ban on 26 stores in its Foods Co. business. The new moratorium will now see the policy extended to 142 supermarket and 108 petrol stations across seven states.
"Visa has been misusing its position and charging retailers excessive fees for a long time," says Mike Schlotman, Kroger's executive vice president and CFO. "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."
In a statement, Visa retaliates: “It is unfair and disappointing that Kroger is putting shoppers in the middle of a business dispute. When consumer choice is limited, nobody wins.”
Kroger's action comes ahead of a possible hike in merchant acquiring fees, which will be levied on banks and likely passed on to retail stores.
The dispute marks the latest in a long-running battle between US retailers and credit card companies over interchange fees. Last week the US District Court agreed a $6.24 billion disbursement to retailers in settlement of a class action lawsuit brought against Visa and Mastercard over card processing charges.