retail news in context, analysis with attitude

Reuters reports that Costco has chosen Citigroup and Visa "to run its co-branded credit card starting next year, replacing American Express, which lost the coveted deal last month. Citigroup will exclusively issue the Costco branded cards and Visa will provide the payment network in the United States and Puerto Rico from April 1, 2016, Costco said. The deal means that Costco customers will be able to use only Visa credit cards at its stores, as is currently true with American Express cards."

According to the Wall Street Journal, "The current AmEx Costco card that is in the hands of many Costco shoppers will be replaced by a Costco Visa card that is issued by Citigroup. AmEx will try to get the existing holders of the AmEx Costco cards to switch to another type of AmEx card, but it won’t be accepted at Costco.

"It isn’t clear yet what it all means in terms of rewards, which is a key reason why Costco shoppers like having a Costco-branded card in the first place. Costco didn’t provide many details of the new Citi card, saying only that it “would provide generous rewards to Costco members.”
KC's View:
I could be wrong about this, but my sense is that this decision has a lot more implications for Citigroup and American Express (and, maybe even their stock prices!) than it does for Costco, or even for its shoppers. I'm a regular Costco shopper, and I pay no attention to what its co-branded card happens to be.