BACK

Breaking News

Kroger extends ban of Visa credit cards

The grocery giant said Smith's Food & Drug Stores will no longer accept Visa due to high swipe fees

Summary

Supermarket giant Kroger announced another one of its store chains will no longer accept Visa cards due to high swipe fees.

The editorial content below is based solely on the objective assessment of our writers and is not driven by advertising dollars. However, we may receive compensation when you click on links to products from our partners. Learn more about our advertising policy.

The content on this page is accurate as of the posting date; however, some of the offers mentioned may have expired. Please see the bank’s website for the most current version of card offers; and please review our list of best credit cards, or use our CardMatch™ tool to find cards matched to your needs.

Kroger has added another one of its store chains to its ban of Visa credit cards.

The supermarket giant announced on March 1 its Smith Food & Drug Stores division would stop accepting Visa credit cards beginning April 3. The ban includes 142 stores and 108 gas stations located in Utah, Nevada, New Mexico, Wyoming, Idaho, Montana and Arizona.

Last August, Kroger-owned Foods Co. Supermarkets said it would no longer take Visa credit cards. That ban covers 21 stores and five fueling centers in central and northern California.

Shoppers are still able to use Visa debit cards, as well as cards from other networks such as Mastercard, Discover and American Express. 

Retailers pay card networks an interchange fee – also called a “swipe fee” – of about 2 or 3 percent of the purchase price each time a consumer uses a credit card. Experts say the costs of the swipe fees typically
get passed on to the consumer. Visa and Mastercard are reportedly planning to raise swipe fees in April.

“Visa has been misusing its position and charging retailers excessive fees for a long time,” Kroger vice president Mike Schlotman said in a news release. “They conceal from customers what Visa and its banks charge retailers to accept Visa cards. At Smith’s, Visa’s credit card fees are higher than any other credit card brand that we accept.”

A Kroger spokesman said in August the ban could be expanded to the parent company’s stores. Kroger operates 2,782 grocery stores in 35 states under nearly two dozen brands, according to its website.

See related: Card surcharge ban laws take another blow in California court

Retailers have fought the card networks in court over swipe fees in recent years. In 2014, Wal-Mart filed a lawsuit against Visa, alleging the latter used its dominant market position to jack up swipe fees. The lawsuit said retailers paid $350 million in interchange and network fees from 2004 to 2012.

American Express has also faced pushback from retailers and corporate partners over its high swipe fees, which have kept it at a lower acceptance rate in the U.S. than chief rivals Visa and Mastercard. But Amex announced in March 2018 it would cut its interchange fees to their lowest levels in nearly 20 years.

What’s up next?

In Breaking News

Congress moves to reform credit reporting industry

A recent Congressional hearing sought more accountability for the credit reporting industry, and a legislative proposal is also seeking more consumer rights relating to their credit scores.

Published: February 28, 2019

See more stories
Credit Card Rate Report Updated: August 21st, 2019
Business
15.55%
Airline
17.49%
Cash Back
17.63%
Reward
17.49%
Student
17.69%

Questions or comments?

Contact us

Editorial corrections policies

Learn more

Join the Discussion

We encourage an active and insightful conversation among our users. Please help us keep our community civil and respectful. For your safety, do not disclose confidential or personal information such as bank account numbers or social security numbers. Anything you post may be disclosed, published, transmitted or reused.

The editorial content on CreditCards.com is not sponsored by any bank or credit card issuer. The journalists in the editorial department are separate from the company’s business operations. The comments posted below are not provided, reviewed or approved by any company mentioned in our editorial content. Additionally, any companies mentioned in the content do not assume responsibility to ensure that all posts and/or questions are answered.