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Showing posts from May 1, 2015

FOCUS ON RETAIL : Costco's sweet Visa/Citi deal

By Tom Ryan
MAY 1, 2015

Costco's new exclusive credit card deal with Citicorp and Visa will reduce the warehouse retailer's acceptance costs to almost zero, sources toldBloomberg.

Currently, Costco pays approximately 0.6 percent on each transaction as part of its exclusive deal with American Express. AmEx charges most merchants 2.45 percent per transaction. The even lower fee with Citicorp and Visa reflects the increased leverage of the second-largest U.S. retailer as well as the banking appeal of Costco's affluent customer base.

Effective April 1, 2016, Visa will succeed AmEx as the exclusive credit card accepted at Costco's U.S. stores. Citicorp will issue a new co-branded card to replace the existing AmEx-Costco card.

When news arrived that the 16-year deal with AmEx was ending, some felt Costco might shift strategy to start accepting many forms of card payments as a convenience to shoppers. Only cash or debit cards are accepted outside of AmEx at the chain.

Customers wil…


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