What might sound as another distressing news for American Express Company (NYSE:AXP), Costco Wholesale Corporation (NASDAQ:COST) might go for a new U.S. card issuer for its retail stores. Earlier, the retailer ended its partnership with the credit card issuer in its Canadian stores.
According to the recent news, the retailer is looking for a new partner for issuing credit cards and processing its payment transactions in its American stores. There has not been any official confirmation but American Express is likely to bid for the contract. Earlier, Costco Wholesale Corporation (NASDAQ:COST) ended its partnership with American Express Company (NYSE:AXP) as its credit card issuer in Canada and the closure will be effective from January 1, 2015.
The retailer announced partnership with a new credit card issuer, Capital One Financial Corp. (NYSE:COF), for its co-branded credit cards in Canada. Jason Arnold, RBC Capital Markets, said that the change in Canada “gives us reason to believe this is a sign of things to come for the U.S. relationship.”
Earlier, Costco Wholesale Corporation (NASDAQ:COST) reached its all-time high of $137.91 with average trading volume of 2.0 million shares per day. The company reported net sales for the month of October 2014 with net sales of $8.73 billion against the sales of $8.15 billion in the year ago period. As of now, the retailer has over 650 warehouses with majority of 470 in United States and Puerto Rico, and 88 warehouses in Canada.
Costco Wholesale Corporation (NASDAQ:COST) is unique in terms of its credit card acceptance, as it accepts credit cards from a single issuer only. In the fiscal year ending on August 31, 2014, the retailer reported net sales of $110.2 billion against the net sales of $102.9 million in 2013. Its sales were $34.8 billion for the fourth quarter ending on September 31, 2014.
This article has been written by Prakash Pandey.