Kroger ends fee fight, accepts Visa cards again

October 30, 2019

Kroger is calling an end to a more than year-long feud with Visa credit cards. As of Wednesday, the nation’s largest supermarket chain is allowing the Visa payment network’s credit cards to be used at all of its stores once more, backing off a threat to ban Visa credit cards entirely.

The Cincinnati, Ohio-based grocer stopped accepting Visa credit cards last year at its Foods Co. subsidiary in California. It then escalated the ban by pulling the plug on accepting the plastic in April at 142 Smith’s Food and Drug Stores and 108 fuel centers in seven states, citing what it called “excessive fees.”

Still, the dispute never reached the overwhelming majority of the 2,800 food stores run by Kroger under brand names including King Scoopers, Harris Teeter, Fred Meyer and Ralphs.

On Wednesday, Kroger confirmed its decision, which the company also touted in a banner atop its Smith’s website, but declined to say whether its concerns about the costs associated with Visa transactions had been addressed.

“Kroger now accepts Visa credit cards at all our family of stores, including Smith’s and Foods Co.,” a spokesperson for Kroger said in an email, declining to elaborate further.

“I see this as a win for Visa and the entire card industry. We don’t know the specific terms here, and maybe Kroger got a better deal, but my view is that card bans and surcharges are consumer-unfriendly and could actually hurt merchants,” noted Ted Rossman, analyst at CreditCards.com. “While merchants don’t like paying two or three percent in interchange fees to card companies, that’s a lot better than losing sales.”

So-called credit card interchange fees generate billions of dollars in revenue for Visa, MasterCard and other payment networks, prompting retailers including Amazon to search for ways to disrupt the decades-old card payments system. The online retailer’s moves have included offering Amazon Prime members an incentive to pay with debit cards instead of credit cards.