Kroger reverses ban on Visa credit cards

Press enter to search
Close search
Open Menu

Kroger reverses ban on Visa credit cards

By Marianne Wilson - 10/30/2019

The Kroger Co. is once again accepting Visa credit cards at all its divisions.

The change was reported by Business Insider. The supermarket giant did not comment on the reason for the reversal. 

In March, Kroger announced that its Smith's Food & Drug Stores division would stop accepting Visa credit cards as a form of payment, beginning April 3, 2019. The ban affected Smith's 142 supermarket and 108 fuel center locations. (The move followed an  earlier ban on Visa credit cards at Kroger’s Foods Co. unit.)

“Visa has been misusing its position and charging retailers excessive fees for a long time,"  Mike Schlotman, Kroger's executive VP and CFO, said in a statement at the time. "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. "

Ted Rossman, industry analysts for CreditCards.com, said he saw Kroger’s decision to reverse the ban 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,” he said.  “While merchants don’t like paying two or three percent in interchange fees to card companies, that’s a lot better than losing sales.”

Rossman noted that research shows that consumers are more likely to buy – and even to spend more – when using a card. 

“Banning all cards, or certain types of cards, or charging more to use cards seems like a losing strategy that could push customers to competitors, especially in competitive, low-margin industries such as groceries,” he said. 

 

RELATED TOPICS