Smith’s to stop taking Visa credit cards

Smith’s Food and Drug Stores has announced it will not accept Visa credit cards as a form of payment after April 2. The stores will continue to accept all other forms of payment, including Visa debit cards.

Smith’s said it took the action because of what it considers excessive interchange and network fees that Visa and its issuing banks charge retailers. The company said those fees drive up food prices for all customers. The stores claim Visa’s fees are the highest of any credit cards accepted by Smith’s and exceed grocery store margins in a highly competitive retail food industry.

“Visa has been misusing its position and charging retailers excessive fees for a long time,” said Mike Schlotman, Kroger’s executive vice president and CFO. “They conceal from customers what Visa and its banks charge retailers to accept Visa credit cards. At Smith’s, Visa’s credit card fees are higher than any other credit card brand that we accept. Visa’s excessive fees and unfairness cannot continue to go unchecked. That’s why, starting April 3, Smith’s will accept all forms of payment except Visa credit cards.”

With the exception of Foods Co. Supermarkets in California, there are no other Kroger banner stores affected by the announcement. But, Kroger said it is continuing to explore options to reduce the cost of accepting credit cards.

Smith’s stores said it would continue to accept all other forms of payment, including benefit transfer cards from SNAP and WIC programs, Mastercard and Visa debit cards, and health savings account cards.

Smith’s employs over 20,000 associates and operates 55 stores in Utah, 45 in Nevada, 23 in New Mexico, 7 in Wyoming, and 4 stores each in Idaho, Montana, and Northern Arizona.