Costco Wholesale Corporation (NASDAQ:COST) announced today that it will stop accepting cards issued by American Express Company (NYSE:AXP) in Canada starting January 1. The two long-term partners couldn’t come to an agreement after several negotiation efforts.
Costco Wholesale Corporation (NASDAQ:COST) Canada’s VP of marketing and membership, Lorelle Gilpin, said,
“The credit card relationship between American Express and Costco Wholesale Canada will not be renewed when it expires on December 31.”
Earlier, Costco only accepted cards issued by American Express Company (NYSE:AXP) in its Canadian stores and both the companies have worked together to issue co-branded cards. U.S. Costco stores would continue accepting AXP cards for purchase.
Costco sent an email to its customers stating,
“Costco warehouses and gas stations in the United States will continue to accept American Express Cards after Jan. 1, 2015, with the exception of TrueEarnings and American Express Platinum Cash Rebate cards issued in Canada.”
Costco further announced that it would provide information about the new payment options soon enough.
David Barnes, American Express Company (NYSE:AXP) Spokesman, said,
“The terms of the contract was up, AmEx and Costco entered into negotiations and were unable to come to terms. This is very specific and exclusive to Canada. There are separate contracts for AmEx’s U.S. Costco relationship.”
Barnes further said that the partnership with Costco Wholesale Corporation (NASDAQ:COST) represented a huge profit for American Express Company (NYSE:AXP) in Canada.
Costco Wholesale Corporation (NASDAQ:COST) and American Express Company (NYSE:AXP) share a stronger bond than their partnership in Canada. Warrant Buffet’s Berkshire Hathaway has stakes in both the companies along with the fact that the VP, Charles Munger, of American Express was in Costco’s Board for over 15 years.
This article has been written by Prakash Pandey.
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