ATLANTA -- A California division of Kroger says it will stop accepting Visa credit cards in its stores starting in mid-August.
Foods Co. operates 21 stores in central and northern California and says their stores and fuel centers will stop accepting the cards as a form of payment on August 14. The decision comes in a dispute over the high costs associated with the card's network fees and interchange rates according to the company.
Customers will still be able to use Visa debit cards, MasterCard, American Express and Discover credit cards as payments according to a statement.
Visa released a statement to CNBC that said it was frustrated by the move.
"Visa is disappointed at Kroger's decision to stop accepting Visa credit cards at its Foods Co. stores," the statement said, in part. "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."
According to an interview with Bloomberg News, Kroger is considering making the change at its other affiliated divisions.
“It’s pretty clear we need to move down this path, and if we have to expand that beyond Foods Co., we’re prepared to take that step,” Kroger CIO Chris Hjelm said in the interview. 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 operates 128 stores in metro Atlanta.
