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Kroger Grocery Stores Ban Use Of Visa Cards At Some Locations

CINCINNATI, Ohio (CBSDFW.COM/CBS NEWS) - Kroger, the biggest supermarket chain in the U.S., is barring the use of Visa cards at some stores in a dispute over the "swipe" fees it pays to handle customers' credit and debit card transactions.

A California subsidiary of the grocery chain, Foods Co., said that starting August 14 it will stop accepting Visa credit cards at its 21 stores in the state. That will save on the costs associated with Visa's interchange rates and network fees, according to Foods Co.

All of the Food Co. stores will still accept Visa debit cards and credit and debit cards from other companies.

It's estimated that retailers pay more than $90 billion in swipe fees each year.

(credit: Scott Olson/Getty Images)

Reached for comment, a spokesperson for Kroger pointed to what the company's chief information officer told Bloomberg about possibly taking the ban nationwide. "If we have to expand that beyond Foods Co., we're prepared to take that step," Chris Hjelm told the news service. "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."

The stock market had a negative reaction to Kroger's announcement. Shares of Visa, American Express and Mastercard all dropped on Monday.

In a statement a spokesperson for Visa said the company was "disappointed" with Kroger's decision and that they are still working with the grocer to reach a "reasonable" solution.

Kroger has some 2,800 stores across the U.S. and the District of Columbia – including more than 200 in Texas.

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