Due to Visa Inc.'s high annual swipe fees — a $90 billion problem — Foods Co., a unit of supermarket chain Kroger, has banned payment using Visa credit cards at 26 California stores and gas stations operating under the brand.
>> Read more trending news
“Visa's rates and fees are among the highest of any credit card brand,” Foods Co. said in a statement Monday. “The savings will be passed along to Foods Co. customers in the form of low everyday prices on the items shoppers purchase most.”
According to Bloomberg, Kroger is also thinking about expanding the ban to some of its other 2,779 stores.
"If we have to expand that beyond Foods Co., we're prepared to take that step," Kroger CIO Chris Hjelm told Bloomberg. Visa's card fees are "out of alignment" he said. "We don't believe we have a choice but to use whatever mechanism possible to get it back in alignment."
Visa expressed disappointment with Kroger's decision and told Bloomberg the company "remains committed to working with Kroger to reach a reasonable solution."
Both Visa and American Express Co. dropped more than 2 percentage points each on the Dow Jones Industrial Average on Monday.
>> Related: This change will affect every Visa, Mastercard, American Express and Discover cardholder