Foods Co., a unit of Kroger, the largest supermarket chain in the U.S., will no longer accept payment from customers using credit cards issued by Visa, the largest credit card company in the U.S.
The grocery store chain announced the policy change on Monday, saying it was due to Visa’s interchange rates, which merchants pay to banks whenever a customer swipes a corresponding card at the store.
“Visa’s rates and fees are among the highest of any credit card brand,” Foods Co. said in a statement. “The savings will be passed along to Foods Co. customers in the form of low everyday prices on the items shoppers purchase most.”
A spokesman for Kroger said the parent company was prepared to follow the lead of Foods Co. if the amount retailers paid to the bank remains “out of alignment,” according to Bloomberg.
Foods Co. will stop accepting Visa credit cards – but not debit cards – as payment beginning on Aug. 14. The policy will affect 21 stores and five gas stations in California.
In a statement to FOX Business, a Visa spokesperson said the bank was disappointed by the decision and remained committed to working with the grocer to “reach a reasonable solution.”
Source: Fox Business