FILE PHOTO: Kroger supermarket chain is headquartered in Cincinnati, Ohio, United States, June 28, 2018. Photo taken June 28, 2018. REUTERS / Lisa Baertlein
(Reuters) – US supermarket chain Kroger Co announced Friday that its Smith's Food and Drug Stores division will stop accepting Visa Inc.'s credit cards effective April 3 due to excessive transaction fees.
Kroger had stopped accepting Visa credit cards at its Foods Co stores in California last August, due to a dispute over interchange rate prices and network fees.
"At Smith, Visa's credit card fees are higher than those of any other credit card brand we accept." Visa's excessive fees and unfairness can not go unchecked, "said Mike Schlotman. , CFO of Kroger.
The company added that it would continue to explore other options to reduce the cost of accepting credit cards and keep prices low for customers.
Smith's operates more than 130 stores in the United States.
The dispute between Kroger and Visa is the latest between payment processors and merchants over transaction fees. Card companies have stated in the past that spending on strengthening anti-fraud / anti-theft security measures to make payment processing safer has resulted in higher fees.
Mastercard and Visa are carrying out another round of tax increases, scheduled for April, that will be levied on commercial banks, not directly on merchants, although banks may pass on the rise to sellers if they want to avoid the tax hikes. absorb themselves.
Visa was not immediately available for comment outside of working hours.
Smith stores will continue to accept all other forms of payment, including major credit cards and health savings account cards.
Report by Aparajita Saxena to Bengaluru; Edited by Shailesh Kuber