US retail giant Kroger abandons Visa due to high fees, Considers integrating Bitcoin’s Lightning network
Kroger, one of the largest grocery supermarket chains in the United States banned Visa in its food chain – Smith’s Food & Drug Stores due to high fees.
Starting on April 3rd Kroger’s Smith stores will stop accepting Visa credit cards in 134 food and drug stores across 7 states including Utah, Nevada, New Mexico, Wyoming, Idaho, Montana, and Arizona, which comprises of 20,000+ employees.
The main reason the company took this decision is due to high fees that Visa charges for every transaction. Kroger Chief Financial Officer Mike Schlotman said in an announcement on Market Watch:
“Visa has been misusing its position and charging retailers excessive fees for a long time, At Smith’s, Visa’s credit card fees are higher than any other credit card brand that we accept.”
The company is looking for options to reduce the incurring costs in fees and reduce costs for customers.
Pomp suggests Bitcoin’s Lightning Network
Bitcoin proponent and Morgan Creek Partner Anthony Pompliano took this as an opportunity and reached out to Kroger to introduce them to Bitcoin’s lightning network as an alternative. Sophic Nick, a product manager at Kroger responded to his tweet saying they are willing to have a conversation about Bitcoin.
Hey Pomp – I'm a Product Manager at Kroger Digital. Can confirm that Yael is the correct person to discuss this with. I would love to set up a conversation.
— Nick (@sophicNick) March 2, 2019
Kroger is the third largest supermarket in the world with revenue crossing $120 Billion in 2018. As the saying goes “Necessity is the mother of all inventions” the high fees charged by middlemen like Visa is forcing many retailers like Kroger to innovate on the payments end.
Bitcoin’s lightning network is still relatively challenging to use and has to go through many more iterations to be ready for mainstream adoption, but these baby steps will matter in the long term.
Visa even responded to the recent developments, a Visa spokesperson told Coin Rivet:
“Cardholders are our first priority. Our goal is to ensure that every cardholder can use their Visa card wherever they wish to shop. When consumer choice is limited nobody wins. The Visa network delivers significant value for merchants including access to more customers, increased sales, security and fraud protection, a quick and convenient checkout experience, and ongoing innovation and implementation of the latest technologies. Kroger enjoys all of these benefits, and there is a cost for these services, like any other.”
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