Costco converts to Visa

Costco (NASDAQ:COST) has completed its much anticipated conversion from Costco-branded American Express credit cards to cards issued by Citi, and now accepts only Visa cards.

Costco said it would end its 16-year partnership with American Express in March 2015, saying it would stop accepting the cards in stores and change its issuing partner to Citi, providing club members with Citi co-branded Visa cards.

Citi acquired in excess of $10.5 billion of credit card receivables. Existing Costco card holders have already received their new cards, which will be accepted in stores beginning today.

"Today is an exciting milestone for Visa and our cardholders who can now pay with any Visa credit or debit card when shopping at Costco," said Ryan McInerney, president, Visa. "Visa acceptance and the introduction of the Costco Anywhere Visa Card by Citi is just the start of us bringing new experiences and benefits to current and future Costco members."

AmEx subsequently signed an agreement with Walmart's Sam's Club and is accepted at the more than 650 Sam's Club locations in the United States and Puerto Rico.

With the switch, Costco managed to reduce its credit card processing fees to nearly nothing, a goal held by many retailers which have tried lawsuits, threats and mobile wallet development to save the tens of billions of dollars they spend annually to process transactions.

For more:
- see this and this Citi press release

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