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Kroger threatens ban on Visa cards at stores nationwide

(Scott Olson/Getty Images)

CINCINNATI, OH (WCMH) – The nation's largest grocery store chain will no longer accept Visa credit cards at one of its subsidiaries and hasn't ruled out a ban at all Kroger locations nationwide.

The dispute is over Visa's high annual swipe fees. Foods Co., a  California' subsidiary of the Ohio based grocery chain, says it will no longer accept Visa at its locations starting Aug. 14.

“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.”

Bloomberg reports Kroger may expand 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 told CNBC it is frustrated with Kroger's move.

"Visa is disappointed at Kroger's decision to stop accepting Visa credit cards at its Foods Co. stores," it said in a statement. "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."