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July 31, 2018

Kroger subsidiary to ban Visa credit cards over high fee

American retailer Kroger’s subsidiary Foods Co has announced plans to stop accepting Visa credit cards from 14 August this year citing high interchange rates and network fees.

The unit comprises 21 grocery stores across central and north California, including six in San Francisco Bay area, four in Sacramento Valley and seven in the Central Valley.

In addition to these stores, Foods Co’s five gas stations in California will also bar the Visa cards.

A statement from Foods Co read: “Visa’s rates and fees are among the highest of any credit card brand. The savings will be passed along to Foods Co. customers in the form of low everyday prices on the items shoppers purchase most.”

However, the retailer will accept Visa debit cards along with credit cards from other brands such as MasterCard, American Express and Discover.

Commenting on the decision, Visa spokesperson said: “Visa is disappointed at Kroger’s decision to stop accepting Visa credit cards at its Foods Co stores.

“When consumer choice is limited, nobody wins. Our goal is to protect the interests of our cardholders to ensure they can use their Visa credit cards wherever they shop. Visa remains committed to working with Kroger to reach a reasonable solution.”

Kroger’s move is one of many ongoing disputes between merchants and payment card companies over the swipe fees.

Last month, the US Supreme Court passed a ruling in favour of American Express saying that the company’s policy of forbidding merchants from steering customers to use other credit cards with lower fees does not violate federal antitrust law.

This litigation was filed by merchants from 11 US states alleging the card company of charging higher card fee.

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