Kroger Files Lawsuit Against Visa

The Kroger Co. has filed a lawsuit against Visa Inc. that alleges the card payment network threatened to raise fees and cut off the Cincinnati-based supermarket chain from accepting its debit cards because of a dispute about the use of personal identification numbers (PINs) to verify debit-card transactions.

Kroger said it's already been fined $7 million by Visa over the dispute, which has been brewing for several months and  is tied to the introduction of more secure embedded computer chips instead of the traditional magnetic strip.

According to a report in The Wall Street Journal (WSJ), Kroger required customers to authorize their chip-embedded debit card transactions with a PIN and routed the transactions to networks other than Visa.

Visa responded to the lawsuit, according to the WSJ, by asserting that the configuration of Kroger's payments terminals does not meet its rules that demand payments be routed through its network.

Kroger, which said it rang up $29 billion in Visa debit-card transactions last year, noted in the lawsuit that cutting off its ability to accept Visa debit cards “threatened catastrophic consequences for Kroger’s business.”

The full WSJ story can be found here.