NEW YORK, July 31 — Kroger Co is considering expanding a ban on Visa Inc credit cards imposed by one of its subsidiaries, in the latest signal that retailers are preparing a fresh battle over the US$90 billion (RM365.4 billion) they pay in swipe fees every year.

Shares of payment companies including Visa, American Express Co and Mastercard Inc dropped yesterday. Merchants have long looked for ways to cut such charges, including by lobbying lawmakers for lower rates and through technology upgrades that avoid traditional card payments entirely.

The largest US supermarket chain, Kroger said its Foods Co Supermarkets unit in California will stop accepting Visa cards at 21 stores and five fuel centres next month. Kroger spokesman Chris Hjelm said in an interview that the parent company might follow the lead.

“It’s pretty clear we need to move down this path, and if we have to expand that beyond Foods Co, we’re prepared to take that step,” Hjelm said. When the amount retailers pay in card fees “gets out of alignment, as we believe it is now, we don’t believe we have a choice but to use whatever mechanism possible to get it back in alignment.”

Kroger’s announcement followed Walmart Inc’s decision last week to abandon Synchrony Financial after the two couldn’t agree to economic terms. And Amazon.com Inc’s foray into financial services has also been seen as a way the retailer could save US$250 million.

Visa and American Express Co were the worst performers in the Dow Jones Industrial Average yesterday, with each dropping more than 2 per cent. Mastercard declined for a third day in a row, the stock’s longest losing streak since May.

Still, the world’s largest payments networks continue to benefit from a global shift away from cash to electronic payments. Visa has climbed 20 per cent this year as Mastercard rose 31 per cent, outpacing the 12 per cent gain by the S&P 500 Information Technology Index.

AmEx said separately yesterday that it planned to work with an external party to conduct a review of its foreign-exchange business after a report said employees boosted rates for some business customers without notifying them.

Visa dropped 2.7 per cent to US$136.94 at 2.31pm in New York, while AmEx declined 2.4 per cent. Mastercard fell 2 per cent. — Bloomberg