If you live out West, you might want to hit up the ATM before you hit up a Kroger-run grocery store. Some of Kroger’s supermarkets—including Foods Co. and Smith’s—will no longer be accepting Visa credit cards.
What Stores Won’t Be Accepting Visa?
In the state of California, 21 Foods Co. supermarkets and five gas stations are no longer accepting Visa cards. Additionally, Smith’s stores and gas stations in Arizona, Idaho, Montana and Wyoming will be opting out Visa payment starting April 3, 2019.
Why No Visa?
Due to expensive “swipe” fees, Kroger has decided to no longer allow these type of credit card purchases. Kroger actually pays around $90 billion in credit card processing fees every year, according to a Bloomberg report. Foods Co. stated that it is “to save on the high costs associated with credit card company’s interchange rates and network fees.” According to Market Watch, retailers will typically have to pay 2 or 3 percent of the purchase price.
Will It Effect Other Kroger Stores?
At the moment, 168 out of the chain’s 2,500+ stores won’t be accepting Visa—all of which are in the West and Southwest. There are no signs that other stores will be cutting Visa from their payment options, but the chain announced in March 2019 that it “continues to explore options” when it comes to reducing credit card fees.
Will Kroger Be Cash Only?
Not quite! Kroger actually has a partnership with Mastercard due to its’ 1-2-3 REWARDS co-brand credit card program, issued by U.S. Bancorp. This loyalty program allows shoppers to earn valuable points with every purchase, which can be used for food and other merchandise at Kroger grocery stores. They even receive exclusive fuel discounts and personalized shopping coupons.
“We are always looking for partnerships that support our business strategy of creating value for customers by lowering costs throughout the business,” said Gary Millerchip, CEO of Kroger Personal Finance, in a press release.
At the moment, Kroger’s partnership with Visa just isn’t working out. But by the sounds of it, both companies want to work out an agreement for the benefit of satisfying customers. Only time will tell how this debacle will play out.