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

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.

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?

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.)

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.

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).

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.

Oh, I didn't realize there were actually Smith's stores here. When I checked the website all I saw were Fry's.

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.

I highly doubt that would work. When Smith's officially stops accepting Visa, their acquiring bank will no longer process Visa transactions at all.


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.

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.

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?

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.

Apparently Kroger Pay support was also added when Chase Pay was added at Fry's. So, you can use the QR from either app. If Kroger Pay is enabled at the few AZ Smith's, you might be able to use Visa Credit even with the overall ban, but I imagine Smith's was not turned on for the QR payment method yet.

Which stores are included in the Visa ban?

Currently, Foods Co (California) and Smith's (West-MidWest) under Kroger name. Visa credit only, Visa debit is still okay. A Kroger gift card bought at a non-ban chain can be used at a banned chain as a workaround.

Re: Frys, this is on my Chase sign-in page (no mention of Smiths which is two counties away):

"Use Chase Pay® with your Chase Freedom® card in-store at Fry’s to earn up to 10% cash back from 4/7/19–5/7/19. Make sure to activate your Freedom® quarterly bonus categories to take full advantage of this offer. Earn 5% on up to $1,500 in combined purchases in this quarter’s bonus categories including Chase Pay at Fry’s. Earn an additional 5% on up to $400 maximum in purchases when you check out using Chase Pay from 4/7/19–5/7/19."

Great stuff. No one mentioned this previously so either they didn't notify people when the promo started or something. Kind of a short timeline to push through the $1500 spend. This does appear you can use the QR code or Samsung Pay with Chase Pay (traditional contactless MSD).

There is nothing stopping a Smith's person to go to Fry's on a road trip and load up on Kroger gift cards. I am okay with Kroger doing whatever it wants to do with Visa Credit, but I am also okay with consumers doing whatever is allowed to get around the issue.

Yes, we can all be confused on what is going on here with Kroger getting mad at Visa Credit on one hand, but expanding Chase Pay (which is all Visa except for the IHG card). I believe the Chase Pay to Kroger cost is lower than other Visa Credit to Kroger as mentioned earlier, but only time will tell.

Well, I tried. Chase Pay QR code scans at the registers, but errors out each time. Front End manager says it's a Chase problem. Called Chase, they have no record of charge attempts. It appears that Kroger has not trained employees or managers on how Chase Pay works. They kept trying to tap my phone like Apple Pay. :rolleyes:

So, the Kroger Pay is working fine (even at Kroger chains that do not advertise the program). It is relatively new so the employees are not really familiar with it, but they have to use the handheld scanner or the customer facing scanner (make sure the green light is on before you try scanning).

The KP method is a combination of loyalty, app coupons and payment (one bar code for all). It is a really big QR code for some reason and you can scan it at any time. Basically at the end, when you get to total and the cashier closes the purchase, it will automatically process the payment if you already scanned by then.

On the receipt, it shows the payment method as scanned. On the terminal screen, it shows KP Visa (using Chase Freedom this quarter). I do not know if it would reject at Foods Co or Smiths nor do I know if it will reject Visa Debit. I encourage someone to try Visa credit via KP at one of the non-Visa credit allowed chains.

I wouldn't bet on that if it's getting run as card present.

On that note, apparently they're still allowing PIN bypass for Visa debit (source), so that might be how they're managing to make Kroger Pay work for those. I'm not anywhere near a non-Visa accepting Kroger chain to test, though.

Well, as mentioned elsewhere, it ran as Groceries, but does appear to be a CNP transaction when comparing the transaction to other ones used before KP. This makes sense as unless the physical card was used or it was a Visa-approved payment standard, it is like paying for groceries online. So, now I have no idea what Kroger is doing for its overall card strategy except if it tries to get people to move to ACH like Target RedCard.

I'm pretty sure I remember Chase Pay inside the Walmart Pay app showing up as card present, so I'm not sure that's strictly true. That might be something specific to Chase, though.

I finally got Chase Pay to work at Frys toward the end of the 10% bonus promo. Unfortunately it kept tripping the store's ID requirement which defeats the purpose of using Chase Pay by not having to have a physical wallet. While the transactions were approved by Chase/Visa, they were denied by Kroger. Guess that's one way of not having to pay out the bonus, but they were left with a cart full of groceries to restock.

Kroger still has an ID requirement?

Please report the issue to both Chase and Kroger via messaging if you don't mind. I would specifically indicate to share the feedback with the Chase Pay/Kroger team at each company.

Where has Chase (or any other mobile wallet) claimed that their product eliminates the need to carry government issued identification?

It's actually not required to carry ID in the US. Since most people drive anyway, though, one's driver's license needs to be carried around. Not to mention that having some for of ID makes certain things a whole lot easier (like flying through airports).

Understood, but Tanic's post asserts that the purpose of using Chase Pay by not having to have a physical wallet, and implies that was the reason s/he was unable to comply with the Identification request. I doubt that Chase or any phone payment provider has made this claim. My point is that choosing to pay with a phone has no bearing on the decision to carry government issued identification. We all do many things that are not "required" because they make life more pleasant.

If you live somewhere where you don't need to drive and can put a mass transit smartcard on your phone, I can see that playing into a decision to go without a wallet (especially if you can use NFC payment everywhere). But yeah, considering Chase Pay's low merchant acceptance when using a non-Samsung phone, I'm not sure most people can even come close to thinking that.

The Chase Pay app displays "WALLET" at the top of the screen. The implication is that your wallet is in the phone. If I were using Apple Pay (Visa) instead of Chase Pay, Apple states: No mention of a driver license. FaceID/TouchID achieve the same confirmation in Chase Pay.

According to "Visa Rules" which I assume is contractual to Chase Freedom Visa in the Chase Pay app, the merchant cannot require customer identification in order to complete a transaction. Kroger takes their policy to another level by recording customer ID in their registers. Apparently Kroger is a large enough merchant that Chase or Visa does not enforce the merchant agreement.

In the end, the promo of 10% Cash Back at Frys was a bust; it doesn't seem that Chase coordinated this program with Kroger. Back to plastic.

In my experience, customers for the most part want their IDs being checked, so they're not going to be particularly inclined to file complaints with the card networks in the first place. But that's a discussion for another thread.

How exactly did this happen? Was it the cashier who asked you for ID, or the app? If the cashier did it, do you think the register prompted her to do so, or did she do it on her own initiative? I can imagine a cashier who is not familiar with Chase Pay being suspicious of it and deciding to check ID just to make sure. Back when Samsung Pay was new, I had a couple of cashiers either ask for ID or call a manager over because they weren't familiar with it and thought I was doing something shady.

It was a register prompt. Apparently Chase Pay transactions over a certain amount ($100?) triggered the prompt which precluded the cashier from completing the transaction (which was approved by Chase). There was a window in the cashier's screen to record driver license info. It could not be overridden by a manager.

Later, the same amount using the actual Chase Freedom Visa plastic card went through without any prompt, but earned only a 4% bonus.

The implication is that the app has a wallet into which you put cards, just like a physical wallet. The app is on the phone.

And, irrelevant of any ID scheme that your phone may have, the merchant doesn't have to accept it.