Visa and Citi Win Credit Card Deal with Costco
Costco announced today that it will enter into a new co-brand credit card program with Citi, with Visa replacing American Express as the card network.
Costco stated on February 12 that it was ending its exclusive relationship with American Express in the retailer’s United States stores on March 31, 2016.
In order for the deal to be official, Citi must buy Costco’s co-branded card portfolio. If that takes place, then Citi’s agreement will go into effect the day after the American Express contract ends–April 1, 2016. This will impact cards for stores in the United States and Puerto Rico.
American Express and Costco had a relationship that dated back 16 years. AmEx said the loss will hurt the company’s profits for the next two years. It has also been reported that American Express will lose its partnership with JetBlue at the end of the year.
Costco currently operates a total of 474 stores in the U.S., with an additional 88 in Canada. The new deal will not affect the Canadian stores, but it should have a big impact on Citi and Visa’s revenue stream.