Kroger grocery unit bans Visa credit cards

Foods Co., a unit of Kroger, the largest supermarket chain in the U.S., will no longer accept payment from customers using credit cards issued by Visa, the largest credit card company in the U.S.

The ban on Visa credit cards – but not debit cards – was set to go into effect Tuesday. The measure affects 21 stores and five gas stations in California.

The grocery store chain announced the policy change last week, saying it was due to Visa’s interchange rates, which merchants pay to banks whenever a customer uses a corresponding card at the store.

“Visa's rates and fees are among the highest of any credit card brand," Foods Co. said in a statement. "The savings will be passed along to Foods Co. customers in the form of low everyday prices on the items shoppers purchase most."

A spokesman for Kroger said the parent company was prepared to follow the lead of Foods Co. if the amount retailers paid to the bank remains “out of alignment,” according to Bloomberg.

In a statement to FOX Business, a Visa spokesperson said the bank was committed to working with the grocer to “reach a reasonable solution.”