Competition Heats Up for Co-brand Credit Portfolios

What Percent of Small Businesses Accept Cash?

What Percent of Small Businesses Accept Cash?

Bloomberg is reporting that Costco is soliciting bids for its U.S. co-brand credit cardprogram, which is currently under contract with American Express. A new dealcould mean a change in both issuing and network affiliations. In September,Costco announced a partnership that will transition its Canadian co-brandportfolio from American Express to Capital One and MasterCard.

Competition for co-brand programs is intense in manygeographic markets, but particularly so North America where several sizableportfolios are up for renewal in the next couple of years. More than one thirdof all general purpose credit cards spending in the U.S. is on co-brandproducts, according to Mercator Advisory Group’s estimates. Last month,Bloomberg reported that JetBlue is also re-evaluating its co-brand partnershipwith American Express. Losing both Jet Blue and Costco would be significant forAmerican Express, although the likelihood that both switch is uncertain.

Mercator’s recent report “Co-brandCredit Cards: A 2014 Product Review” details recent developments in thismarket.


Overview by Michael Misasi, Senior Analyst, Credit Advisory Service for Mercator Advisory Group

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