Kroger has joined the growing list of retailers that are suing credit card companied over new debit card acceptance rules.
Kroger Co. recently announced that the company is filing a lawsuit against Visa Inc.
According to a report from PYMNTS, Kroger is suing Visa over EMV PIN debit-card transactions. In the suit, Kroger claims that Visa threatened to increase fees and eliminate debit acceptance capacity in Kroger stores if the chain did not abide by Visa’s EMV rules.
Kroger’s current card readers are not in compliance with Visa’s new requirement that customers be given the option to verify debit purchases with a signature or a PIN instead of just a PIN when using EMV cards, PYMNTS reported. Visa informed the company that it machines were not in compliance with the new rule, but Kroger has not made a change to its technology.
After Kroger chose not to change it card readers to comply with the rule, Visa charged the company $7 million in fines, and threatened to cut off Kroger’s ability to accept all Visa debit cards, PYMNTS reported.
Given the size of the Kroger grocery chain, in order to comply with Visa’s new rule, the company would need to reprogram “tens of thousands” of terminals. The task of reprogramming the company’s payment terminals is not practical, but eliminating the acceptance of Visa debit cards would have catastrophic effects on Kroger’s business, given the high volume of debit transactions, PYMNTS reported.
In addition to Kroger, Walmart is also suing Visa, and Home Depot is suing MasterCard and Visa over the companies’ new EMV compliance rules.