Kroger Co (NYSE:KR) started accepting Visa Inc (NYSE:V)’s Credit Cards at 108 fuel centers and 142 Smith’s Food and Drug Stores and ended the year-long fight. Its customers can make payments at Kroger owned and operated fuel stations and food and drug stores across the seven states in the US. The supermarket chain imposed a ban on Visa credit cards in 2018 over excessive fees.
Chief Finance Officer and Executive Vice President of Kroger, Mike Schlotman, said Visa is misusing the cards and charging higher interchange fees to the merchants for a longer time. Customers are unaware of the fees charged by their banks and Visa for transactions using credit cards at merchants. Visa credit charges a higher fee at Smith’s stores when compared to other cards. The company cannot accept such unfair fees for transactions using Visa at its stores.
Not escalated the ban to 2,800 food stores
Kroger has not escalated the ban to its 2,800 food stores (operated under brand names: Ralphs, Harris Teeter, King Scoopers, and Fred Meyer despite the fight with Visa.
Kroger confirmed its decision to accept Visa Credit Cards on Wednesday and posted a message on top of its Smith’s website. According to an email communiqué of a spokesperson at Kroger said the company started accepting Visa credit payments at its family stores that include Food and Drug stores of Smith and Fuel centers.
A Win for Visa
An analyst at CreditCards, Ted Rossman, said it is a win for the entire credit industry and mainly for Visa. Kroger might have received a better deal with Visa. According to his opinion, consumer-unfriendly measures like surcharges and banning of credit cards hurt the businesses and cause inconvenience to the customers. The merchants hesitate to pay two to three percentages of the sales as interchange fees to the card companies. Customers are willing to spend more using credit cards.
The payment networks, Master Card, and Visa generate billions of dollars in revenue through interchange fees. E-commerce giants like Amazon and tech giants are searching for alternate payment modes to prevent paying hefty interchange fees for the cards. Amazon encourages customers to pay using debit cards by offering incentives.