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First Costco drops AMEX for V. Now USAA drops MC for V. What's in your portfolio?
"The Wall Street Journal, which first reported news of the switch, said the move was a big blow to MasterCard as USAA was its biggest debit-card issuer with some $26 billion of purchases made on its cards last year."
"As the negotiations dragged into January 2015, however, he became agitated and called his counterpart to remind him that Amex hadn’t only furnished Costco with its prestigious card; it had been Costco’s “trusted partner.” Jelinek interrupted, according to people who were briefed by Chenault about the call, and told him that as far as he was concerned, Amex was another vendor, just like the one that sold Costco ketchup. “If I can get cheaper ketchup somewhere else, I will,” he said. As rumors about the call spread, the rank and file who heard about it couldn’t believe someone from Costco had the nerve to insult Amex like that. Ketchup! Chenault called Jelinek a few weeks later to say Amex was pulling out."
Additionally, apparently part of the Costco move was that they wanted a card their members could use at more places.
Costco has also had high profile disagreements with Apple and Coke. The Coke problem was worked out in 30-60 days but Apple was absent from Costco's aisles for 3 years. They aren't afraid to take a stand. Whether it benefits their members or shareholders is another question.
Comments
A huge position in Visa, although I also own a somewhat smaller position in Mastercard. Monday should be interesting.
With Costco, USAA and potentially Fidelity (http://www.bloomberg.com/news/articles/2015-08-26/fidelity-said-to-consider-dropping-amex-bofa-as-card-partners, although Fidelity may go to MA), Visa is a monster.
Also, as for American Express, excellent and detailed story about how they lost Costco:
http://www.bloomberg.com/features/2015-how-amex-lost-costco/
"As the negotiations dragged into January 2015, however, he became agitated and called his counterpart to remind him that Amex hadn’t only furnished Costco with its prestigious card; it had been Costco’s “trusted partner.” Jelinek interrupted, according to people who were briefed by Chenault about the call, and told him that as far as he was concerned, Amex was another vendor, just like the one that sold Costco ketchup. “If I can get cheaper ketchup somewhere else, I will,” he said. As rumors about the call spread, the rank and file who heard about it couldn’t believe someone from Costco had the nerve to insult Amex like that. Ketchup! Chenault called Jelinek a few weeks later to say Amex was pulling out."
Additionally, apparently part of the Costco move was that they wanted a card their members could use at more places.