Costco-AmEx Split Triggers Speculation
MasterCard may soon be the only credit card accepted by Costco, according to analyst speculation following news that American Express cards will no longer be accepted in the warehouse club retailer’s stores and website after March 31, 2016.
A similar agreement between the retailer's Canadian division and American Express ended on Dec. 31, 2014, subsequent to which Costco aligned with Capital One MasterCard as its new credit card partner.
“We were unable to reach terms that would have made economic sense for our company and shareholders,” Kenneth I. Chenault, chairman and CEO of American Express, said in a statement.
The pending split with Costco triggered 6.4 percent share decline in AmEx’s stock on Thursday to close at $80.48, wiping $5.6 billion off its market value.
Costco did not comment on the termination of the 16-year-old agreement with American Express in the U.S., or on its future plans for a new partner for credit cards.
The Issaquah, Wash.-based retailer operates 671 warehouse stores, including 474 in the U.S. and 88 in Canada.