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Second Kroger Unit To Stop Accepting Visa Credit Cards (#GotBitcoin?)

Second Kroger Unit To Stop Accepting Visa Credit Cards (#GotBitcoin?)

A second unit of supermarket chain Kroger Co. said Friday that it will stop accepting Visa Inc. credit cards at its 142 supermarkets and 108 gas stations across seven states. Second Kroger Unit To Stop Accepting Visa Credit Cards (#GotBitcoin?)

Smith’s Food & Drug Said It Would Stop Accepting Visa Credit Cards On April 3.

Kroger’s Smith’s Food & Drug said it would stop accepting Visa credit cards on April 3. It will continue to accept Visa debit cards. Smith’s operates stores in Utah, Nevada, New Mexico, Wyoming, Idaho, Montana and Arizona.

The company said the card ban was due to excessive network and interchange fees that Visa and its issuing banks charge retailers, which drive up food prices for its customers. Smith’s stores will continue to accept other forms of payment, including Mastercard Inc., Discover Financial Services and American Express Co. credit cards.

A Visa spokeswoman said in an email that the card company provides significant value to merchants, including increased sales, security and fraud protection and quicker checkouts. The company continues to work toward a resolution, she added.

“It is unfair and disappointing that Kroger is putting shoppers in the middle of a business dispute,” the spokeswoman said.

Smith’s Food & Drug pays more in Visa fees compared with other card companies, said Kroger Chief Financial Officer J. Michael Schlotman. Those fees have been rising, cutting into the chain’s profit margin, he said.

Customers also have been shifting more of their spending to rewards credit cards, which often carry higher fees. Kroger has seen a 54% increase in rewards card usage over the past three years, Mr. Schlotman said in an interview.

In July, Kroger said it would stop accepting Visa credit cards at 21 stores and five gas stations in California because of the card giant’s fees. Foods Co supermarkets stopped accepting Visa credit cards on Aug. 14.

“It’s obvious that we’re serious about trying to rein in operating costs where we can,” Mr. Schlotman said. When asked if other Kroger stores could follow suit, he said: “There’s nothing that’s off the table.”

Card fees have been a long-running point of tension between merchants and card companies.

We previously reported that Visa and Mastercard, the two biggest U.S. card networks, were preparing increases to certain existing fees, effective this April. Fees that Visa charges financial institutions for processing card payments on behalf of merchants are also due to rise.

Second Kroger Unit To Stop Accepting Visa Credit Cards (#GotBitcoin?)

Major Us Retailer Ditches Visa – Now Considering Bitcoin’s Lightning Network

US retail giant, Kroger, is no longer accepting Visa credit cards at its chain of Smith’s food and drug stores. So Anthony Pompliano tweeted an offer to hook them up with Bitcoin’s Lightning Network nationwide.

It all started on Friday when Kroger announced the move to no longer accept Visa credit cards, citing excessive fees. The Smith’s chain comprises 134 food and drug stores across 7 states, employing 20,000 staff.

Card fees charged by Visa are higher at Smith’s than any other credit card brand, explained Kroger CFO, Mike Schlotman:

Visa has been misusing its position and charging retailers excessive fees for a long time.

Visa is actually due to increase fees for the banks processing card payments on behalf of merchants in April.

Pomp And Circumstance

In the circumstances, it seemed only natural for somebody to suggest a crypto alternative, and Pompliano rose to the occasion. “Who knows someone on the leadership team there?” he tweeted.

The Morgan Creek Digital team will fly to meet them and get them hooked up with the Lightning Network nationwide.

A couple of hours later a product manager from Kroger Digital tweeted a response and set up a conversation.

More interestingly, someone suggested selling Smith’s gift-cards on BitRefill, which would certainly make a zero effort stop-gap solution.

The Tip Of The Iceberg

But this is a very big deal. Smith’s is the second Kroger brand to stop accepting Visa credit cards, after Foods Co. supermarkets in California. Successful implementation of a Lightning Network payment solution at the retailer could lead to a wider roll-out across Kroger brands.

Kroger

Kroger is the largest supermarket chain by revenue and the third largest employer in the United States, along with the third largest retailer in the world. As of December 2018, it operated 2,765 supermarkets and multi-department stores, either directly or through subsidiaries.

A Visa spokeswoman said in an email that the card company provides significant value to merchants, including increased sales, security and fraud protection and quicker checkouts. The company continues to work toward a resolution, she added.

“It is unfair and disappointing that Kroger is putting shoppers in the middle of a business dispute,” the spokeswoman said.

Smith’s Food & Drug pays more in Visa fees compared with other card companies, said Kroger Chief Financial Officer J. Michael Schlotman. Those fees have been rising, cutting into the chain’s profit margin, he said.

Customers also have been shifting more of their spending to rewards credit cards, which often carry higher fees. Kroger has seen a 54% increase in rewards card usage over the past three years, Mr. Schlotman said in an interview.

In July, Kroger said it would stop accepting Visa credit cards at 21 stores and five gas stations in California because of the card giant’s fees. Foods Co supermarkets stopped accepting Visa credit cards on Aug. 14.

“It’s obvious that we’re serious about trying to rein in operating costs where we can,” Mr. Schlotman said. When asked if other Kroger stores could follow suit, he said: “There’s nothing that’s off the table.”

Card fees have been a long-running point of tension between merchants and card companies.

We previously reported that Visa and Mastercard, the two biggest U.S. card networks, were preparing increases to certain existing fees, effective this April. Fees that Visa charges financial institutions for processing card payments on behalf of merchants are also due to rise.

And Visa… You Only Have Yourself To Blame!

Will major retailers like Kroger accept Bitcoin and Lightning Network payments? Share your thoughts!

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Your Questions And Comments Are Greatly Appreciated.

Monty H. & Carolyn A.

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