Do you take Visa?
Supermarket chain Kroger announced that it may ban Visa cards from its store because of the fees the credit card company charges per transaction.
In fact, some of its subsidiaries have already taken action. California-based Foods Co. announced that it will stop accepting Visa debit and credit cards in August across all stores.
Chris Hjelm, a spokesman for Kroger, explained to Bloomberg,”If we have to expand that beyond Foods Co., we’re prepared to take that step. When the amount retailers pay in card fees ‘gets out of alignment,’ as we believe it is now, we don’t believe we have a choice but to use whatever mechanism possible to get it back in alignment.”
Kroger reported that this change will also bring down prices for consumers – because they will save money in transaction fees, they will be able to give shoppers marked down prices and still reduce their costs. However, consumers may be frustrated by the lack of convenience of needing to use cash or another payment method, as many shoppers own and use a Visa card.
Visa fired back at Kroger, stating, “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.”
The grocery chain’s stock is down more than 3 percent after reporting this news – this may prove to be more of a financial burden than they think.