The Enquirer

The Kroger Co. joined in the ongoing battle between retailers and financial institutions on how to balance security while providing convenience for shoppers. It filed suit Monday in federal court in Cincinnati to block Visa from levying fines against the grocer for not allowing signatures instead of requiring PIN numbers when accepting Visa debit cards.

Retailers and banks have pushed for chip-enabled cards, which have become the industry practice, in the aftermath of a series of high-profile security breaches, particularly at Target. Chip cards spit out a unique code each time a transaction is processed. That makes it less prone to fraud. But many retailers, including Kroger's rival Wal-Mart, have pushed for an extra layer of protection: requiring customers to punch in PIN numbers for both credit cards and debit cards.

The 47-page suit charges that Visa has fined Kroger $7 million over the 54,000 new chip terminals it has installed in 3,200 stores nationwide. Kroger said in the suit that it has paid $3.1 million to date.

Kroger's suit charges Visa with changing its rules after the grocer installed the machine's in October 2015, demanding that Kroger remove the PIN option. A Visa spokesperson couldn't be immediately reached for comment.

The suit says the fines and threats to cut off Kroger's ability to accept all Visa debit cards, even those without chips, are "of no small matter to Kroger." In 2015, the company had $29 billion in Visa debit card transactions, about 55 percent of which were made with PIN numbers.

Kroger filed suit after Vantiv, the credit card payment processing company based in Symmes Township, was instructed by Visa on June 20 to stop routing Visa signature debit transactions to third party debit networks.

The suit cites violations of amendments to the Dodd-Frank reform law and Federal Reserve Bank regulations, as well as two separate violations of Ohio law.

The new suit isn't the only one that Visa is facing from retailers.

Wal-Mart sued Visa in May in New York state court so it could use PIN verification instead of signatures.

Using signatures also is more costly. Wal-Mart pays about 5 cents more to Visa for each signature transaction than it does for the so-called PIN transactions, for example.

The Associated Press contributed.