BUSINESS

American Express, Costco to end long-standing exclusivity deal for card use at US stores

02/12/2015 12:04 EST | Updated 04/14/2015 05:59 EDT
Costco shoppers who have been limited for years to American Express credit cards may be able to pluck a new option from their wallets or purses next year when an exclusivity deal between the two companies expires.

American Express said Thursday that it hasn't been able to come to an agreement on renewal terms for Costco's U.S. stores. The current agreement dates back 16 years and ends March 31, 2016.

Costco has already switched its Canadian stores to Mastercard and picked Mastercard issuer Capital One to provide a co-branded card for the retailer. Costco's 15-year agreement with American Express ended Dec. 31.

American Express said that Costco pays a significantly lower rate than the overall average it imposes on other retailers as part of the agreement and that it would look for other sources of revenue..

Costco has 474 locations in the United States and 88 in Canada. It didn't respond to requests for comment.

Share of American Express Co. fell $5.25, to US$80.76 while broader indexes rose slightly. Costco shares climbed 8 cents to $147.54.