Costco Could Replace American Express as U.S. Card Partner
After replacing American Express as its credit card provider in Canada, Costco is reportedly seeking bids from both a credit card issuer and a payment network for stores in the United States.
In September, Costco Wholesale Canada announced their exclusive relationship with American Express would cease at the end of this year. Costco Canada will instead form a partnership with Capital One and MasterCard.
Until now, American Express is the only line of credit cards accepted in Costco stores. This is due to an exclusive contract that will no longer in effect in 2015. Costco operates a total of 468 stores in the United States and Puerto Rico, yielding over $112 billion a year in revenue.
There are no reports yet as to whether Costco will maintain an exclusive contract with the new payments network or if it will begin accepting cards from several providers. Prior to using American Express to run their payments operation, Costco worked with Discover Financial Services under a similar setup.
American Express is aiming to reach a broader audience as it seeks partnerships with McDonald’s, Walmart, Apple and other brands, according to Bloomberg. AmEx is expected to boost its revenue again this year for the fifth year in a row, but losing the deal with Costco may prove costly come the first quarter of 2015.