Costco Wholesale Corp. named Citigroup Inc. and Visa Inc. as its
new credit partners, replacing American Express Co. as the
exclusive credit-card network at its stores beginning in April of
next year.
Citi will become the exclusive issuer of Costco's co-brand
credit cards, and Visa will replace American Express as the credit
card network for Costco's stores.
Visa shares rose more than 2% premarket, while Citi edged up
0.6%.
Last month AmEx announced the end of the 16-year partnership in
which Costco only accepted AmEx cards. The unusual partnership had
driven a significant chunk of business to the New York card
company. In addition, AmEx and Costco issued a credit card together
that could also be used at other merchants.
Citigroup was expected to aggressively pursue the business.
The break with AmEx set up a race among credit-card firms to
team up with the fast-expanding wholesale club, which sells
everything from car tires to smoked salmon.
AmEx, which issues credit and charge cards and owns a processing
network, said it had been unable to reach a new agreement with
Costco on terms that "would have made economic sense" for the
company.
Write to Angela Chen at angela.chen@dowjones.com
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