Kroger Reportedly Mulling Visa Card Ban Due to Fees

One of the country’s largest grocers has reportedly put Visa on notice over its fees, and credit unions and other card issuers should take notice, said one industry pro.

According to reports yesterday in Bloomberg and the Wall Street Journal, Ohio-based grocery giant Kroger said 21 stores and five fuel centers that are part of its Foods Co. Supermarkets subsidiary will stop accepting Visa credit cards starting on August 14. Bloomberg also reported that the parent company, which operates close to 3,000 stores in 35 states, may do the same across the rest of the organization. The company will continue to accept Visa debit cards, according to the Wall Street Journal.

Diana Dykstra, who is president ad CEO of the California and Nevada Credit Union League, said Kroger’s move could backfire.

“Certainly this is just another attempt to get the attention of Visa and Mastercard, and an attempt to lower interchange fees,” she told CU Times. “…It could ultimately just hurt Kroger if the consumer decides they want to use a credit card. There are multiple grocery stores all over California that a consumer can choose.”

Visa-branded cards accounted for 60% of credit and debit purchase volume in the United States in 2017, according to the Nilson Report, and Federal Reserve data showed that about 71% of American families had at least one credit card in 2016.

For its 2017 fiscal year, Visa reported $18.3 billion in operating revenues and processed $7.3 trillion in payments via 111.2 billion transactions and 3.2 billion cards.

Kroger did not respond to a request for comment.