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Freedom VISA or Chase Pay acceptance at Smith's (Kroger)

Freedom VISA or Chase Pay acceptance at Smith's (Kroger)

Old Mar 17, 19, 12:17 am
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Freedom VISA or Chase Pay acceptance at Smith's (Kroger)

Originally Posted by rasheed View Post
Grocery is reoccurring, but timely especially as Kroger tries to reduce Visa credit exposure (which is almost all of the Chase Freedom cards). I am still waiting to see if Kroger will expand its Chase Pay QR pilot for it to be a more interesting quarter.
The axe drops on April 3, 2019 when Smith's stops accepting Visa credit cards.
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Old Mar 17, 19, 1:03 am
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Originally Posted by Tanic View Post
The axe drops on April 3, 2019 when Smith's stops accepting Visa credit cards.
And as someone in Smiths territory, Chase doing 5% back at grocery stores starting April 1 makes the decision to "shop elsewhere that still accepts Visa" that much easier.

I was actually not planning to change how much I shop at Smiths due to the Visa acceptance decision, and just start to use a different card type there since not all of the cards I carry are Visa, but this promotion from Chase is going to really push me away from Smiths.
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Old Mar 17, 19, 10:40 am
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Originally Posted by storewanderer View Post
And as someone in Smiths territory, Chase doing 5% back at grocery stores starting April 1 makes the decision to "shop elsewhere that still accepts Visa" that much easier.
I was actually not planning to change how much I shop at Smiths due to the Visa acceptance decision, and just start to use a different card type there since not all of the cards I carry are Visa, but this promotion from Chase is going to really push me away from Smiths.
I tried to get Kroger to tell me which stores are supporting Chase Pay, and I could not get an answer. We have seen some pictures in the contactless thread of some self-checkout Kroger stores supporting the Chase Pay QR code at the self-checkout area only (we are not talking about the Samsung Pay version). If there are any Smith's that do support Chase Pay QR, theoretically, they would support Chase Visa Credit after the April cut-off date via that workaround because they would have a different negotiated discount rate, but there is just such little documentation out there. However, it also doesn't appear Chase or Kroger are willing to promote that conversation at the moment with just a few weeks to go before the Smith's change.
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Old Mar 17, 19, 3:08 pm
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Originally Posted by rasheed View Post
I tried to get Kroger to tell me which stores are supporting Chase Pay, and I could not get an answer. We have seen some pictures in the contactless thread of some self-checkout Kroger stores supporting the Chase Pay QR code at the self-checkout area only (we are not talking about the Samsung Pay version). If there are any Smith's that do support Chase Pay QR, theoretically, they would support Chase Visa Credit after the April cut-off date via that workaround because they would have a different negotiated discount rate, but there is just such little documentation out there. However, it also doesn't appear Chase or Kroger are willing to promote that conversation at the moment with just a few weeks to go before the Smith's change.
They cannot pick and choose Visa Credit Cards from one issuer or processing means, and decline all others. The Chase Pay Visa processes just like a regular Visa card through the Visa network. It processes as a Visa Credit Card through Visa's authorization network. So on April 3, if Smiths actually cuts off Visa (so far, the signs are still up and the "important notice" is printing on my receipt once a week), that is it for any potential use of a Visa Credit Card via Chase Pay. So I do not think Chase Pay is a potential "work around" to use Visa Cards at Smiths after they cut it off.

Maybe if Chase Pay works with debit cards, they could still take those after April 3?
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Old Mar 17, 19, 3:13 pm
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Originally Posted by storewanderer View Post
Maybe if Chase Pay works with debit cards, they could still take those after April 3?
My understanding is that only Visa credit is being turned off. Debit cards with a Visa logo will still be accepted, of course with non-bypassable PIN (much like with MC debit).

Come to think of it, I wonder if them being "unable" to turn off PIN bypass/"credit" for Visa debit cards is playing into their decision too. (By law, they're supposed to be able to, but Visa did sue them when they tried the first time.)
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Old Mar 17, 19, 5:37 pm
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Originally Posted by storewanderer View Post
The Chase Pay Visa processes just like a regular Visa card through the Visa network. It processes as a Visa Credit Card through Visa's authorization network. So I do not think Chase Pay is a potential "work around" to use Visa Cards at Smiths after they cut it off.

Maybe if Chase Pay works with debit cards, they could still take those after April 3?
Respectfully, I am not following this thought. Merchants are allowed to route transactions however they wish under the previous law and legal settlement changes. Realistically, only certain merchants have enough size to justify custom routing agreements.

I think we agree that Visa is not turning off anything for the Kroger situation. It is Kroger at some point in the transaction process that is denying the transaction with no hint known to Visa. In fact, we can also argue that Visa probably will still processes many of the debit transactions (although there are alternates, the flattened interchange rate doesn't make that very competitive).

I am not privy to enough of the Chase and Visa relationship except from a few anecdotes mentioned in various disclosure documents and investor calls. You seem to imply that a Chase Visa credit charge is the same as other Visa credit charges. Well, it is possible it is processed the same way, but Kroger is not concerned about the processing, they don't like the discount rate assigned by Visa. I firmly believe that Chase can and does negotiate a different rate for certain merchants because it can also flatten/eliminate many of Visa's own network fees. This is really the main incentive Chase can offer merchants to link up with whatever programs they can offer.

I believe Chase can also private network route and approve transactions, but it does seem that Chasenet might just be still an underlying Visa-ran infrastructure, which would make sense from many angles. I also still claim that Chase could get Kroger to accept only Chase-branded Visa credit cards without Visa forcing some honor all cards rule legal response. The best way to do that is through the distinctive QR code method (which I think does list different on those Kroger receipts where it is live). The real question here is why is Chase able to act differently than other Visa issuers, and I've addressed before that Visa faced a tough dilemma as its largest issuer in the US is very powerful. At the time the special deal was made, I think Chase was implying that it could start its own network or buy Discover (for the same purpose). Chase still talks about it occassionally, but seems all in with Visa at the moment (see CVS Visa tap card commercial). Visa could have chosen any other tap issuer for that cross promotion.

Oh man, we are getting off topic, but Chase can get Kroger to be another grocery brand beyond Shop-Rite to be under the special arrangement. I still believe it could sidestep the Visa credit issue if Kroger agrees, but it would definitely be harder for Kroger to make an overall new deal with Visa which must be the main goal today. I also can't imagine Chase wants to get involved so openly in a showdown over acceptance with Visa. I would love to see it because it would force innovation. However, to your point, whether it is QR or the physical card, it shouldn't matter. That would cause some clear point of sale confusion no doubt, but Chase has to see that as an incredible acquisition play (maybe causing Kroger other problems with partners like US Bank).

The Freedom Q2 seems like the perfect time to play the game. I just don't know if the Kroger and Chase team are willing to allow this at Foods Co and Smith's.

Lastly, Kroger's gift card mall does accept Visa credit. One can buy Kroger branded gift cards to use at blocked Visa credit chains with minimal shipping fees. I do not know if Kroger gift card mall codes as groceries though. We have mentioned that one can also buy Kroger gift cards at other grocery chains (except Fred Meyer which does not code as grocery). Is this hassle worth it? Just depends on how useful Kroger grocery prices are to a given family.
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Old Mar 17, 19, 10:32 pm
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Originally Posted by rasheed View Post
I believe Chase can also private network route and approve transactions, but it does seem that Chasenet might just be still an underlying Visa-ran infrastructure, which would make sense from many angles. I also still claim that Chase could get Kroger to accept only Chase-branded Visa credit cards without Visa forcing some honor all cards rule legal response. The best way to do that is through the distinctive QR code method (which I think does list different on those Kroger receipts where it is live). The real question here is why is Chase able to act differently than other Visa issuers, and I've addressed before that Visa faced a tough dilemma as its largest issuer in the US is very powerful. At the time the special deal was made, I think Chase was implying that it could start its own network or buy Discover (for the same purpose). Chase still talks about it occassionally, but seems all in with Visa at the moment (see CVS Visa tap card commercial). Visa could have chosen any other tap issuer for that cross promotion.
Keep in mind that Chase Pay uses the Visa/EMV QR standards. I'm not sure that'd necessarily allow Chase Visa cards to continue to be used at Kroger if the latter stops accepting Visa since in theory, other issuers could come out with their own payment apps.

That said, Chase Pay acceptance at the rest of Kroger could be a test to see how much of a reduction in interchange costs they end up seeing. I don't think that will work out all that well, however, considering that usage is already pretty low (besides the people with Samsung phones who are just using Samsung Pay with it).
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Old Mar 18, 19, 9:39 am
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I just realized Smith's is actually Fry's in the Phoenix area. Since I only use Visa except for meeting MSR on some Aadvantage Mastercards this will significantly shift my shopping habits... as long as they keep taking Visa debit for other activities I guess I'm ok though.
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Old Mar 18, 19, 9:55 am
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Originally Posted by bigshooter View Post
I just realized Smith's is actually Fry's in the Phoenix area. Since I only use Visa except for meeting MSR on some Aadvantage Mastercards this will significantly shift my shopping habits... as long as they keep taking Visa debit for other activities I guess I'm ok though.
Frys will continue to accept Visa credit cards after April 2 for the foreseeable future, the four Smiths stores in AZ will not. Kroger is using Smiths division as a test.
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Old Mar 18, 19, 6:25 pm
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Originally Posted by Tanic View Post
Frys will continue to accept Visa credit cards after April 2 for the foreseeable future, the four Smiths stores in AZ will not. Kroger is using Smiths division as a test.
Oh, I didn't realize there were actually Smith's stores here. When I checked the website all I saw were Fry's.
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Old Mar 19, 19, 2:52 am
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Originally Posted by rasheed View Post
I am not privy to enough of the Chase and Visa relationship except from a few anecdotes mentioned in various disclosure documents and investor calls. You seem to imply that a Chase Visa credit charge is the same as other Visa credit charges. Well, it is possible it is processed the same way, but Kroger is not concerned about the processing, they don't like the discount rate assigned by Visa. I firmly believe that Chase can and does negotiate a different rate for certain merchants because it can also flatten/eliminate many of Visa's own network fees.
I don't think card issuers can negotiate fees for their cardholders. The amount Kroger pays to accept cards would be negotiated between Kroger, Visa, and whatever merchant processing bank they are using. The processing bank assigns a discount rate and pays Visa a portion of it (interchange). The cardholder's bank is not a party to that negotiation, from what I'm aware.

Originally Posted by rasheed View Post
I also still claim that Chase could get Kroger to accept only Chase-branded Visa credit cards without Visa forcing some honor all cards rule legal response. The best way to do that is through the distinctive QR code method (which I think does list different on those Kroger receipts where it is live). The real question here is why is Chase able to act differently than other Visa issuers, and I've addressed before that Visa faced a tough dilemma as its largest issuer in the US is very powerful.
I highly doubt that would work. When Smith's officially stops accepting Visa, their acquiring bank will no longer process Visa transactions at all.


Originally Posted by rasheed View Post
Lastly, Kroger's gift card mall does accept Visa credit. One can buy Kroger branded gift cards to use at blocked Visa credit chains with minimal shipping fees. I do not know if Kroger gift card mall codes as groceries though. We have mentioned that one can also buy Kroger gift cards at other grocery chains (except Fred Meyer which does not code as grocery). Is this hassle worth it? Just depends on how useful Kroger grocery prices are to a given family.
One can also buy Kroger gift cards at various reselling websites (I use Cardcash) for a 2-3% discount off face value and free shipping. I used to do this anyway, even before Foods Co stopped accepting Visa.
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Old Mar 19, 19, 2:38 pm
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Originally Posted by bigshooter View Post
I just realized Smith's is actually Fry's in the Phoenix area. Since I only use Visa except for meeting MSR on some Aadvantage Mastercards this will significantly shift my shopping habits... as long as they keep taking Visa debit for other activities I guess I'm ok though.
No, Smith's is not Fry's. It's just that the Smith's site, when you search an area, shows you any Kroger family stores in that area under any brand name. Search a SoCal zipcode and it shows Ralphs. Search Missouri and they show Gerbes. Search Texas and they show Kroger. Etc.

So you can't use that Smith's site to find all Smith's locations easily, since it finds all brands within the Kroger family, I see no way to narrow that down.
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Old Apr 7, 19, 8:01 pm
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All of the Fry's grocery stores under the Kroger umbrella are now active to use the Chase Pay QR at checkout.

Slowly, but some progress.

Great way to use the Freedom 5% UR supermarket quarter bonus.
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Old Apr 7, 19, 8:12 pm
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Originally Posted by rasheed View Post
All of the Fry's grocery stores under the Kroger umbrella are now active to use the Chase Pay QR at checkout.

Slowly, but some progress.

Great way to use the Freedom 5% UR supermarket quarter bonus.
Is Fry's not accepting Visa cards that you have to use Chase Pay there?
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Old Apr 8, 19, 2:09 pm
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Originally Posted by fliesdelta View Post
Is Fry's not accepting Visa cards that you have to use Chase Pay there?
No, Fry's is not part of the current Kroger/Visa Credit block. This is just offering another payment method alternative especially since Kroger does not support tap cards as yet and non-MSD phone payment methods.

I do believe if Kroger does increase its general Visa Credit block, it could still accept Chase Pay as a workaround, but I have to await a wider Chase Pay deployment at Kroger to test that idea.
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