SEATTLE — Costco’s switch from American Express to Visa is being pushed back to this summer.
Costco Wholesale had previously announced that the switch in the only credit card it will accept in its U.S. stores would happen in April.
It’s now saying that transition will happen in June or by mid-summer.
For years, Amex had been the Seattle-area retail giant’s credit card network and the issuer of its co-branded credit cards.
But last year, Costco said it had struck a deal with Visa to replace Amex as its credit-card network, and for Citigroup to become the exclusive issuer of its co-branded credit cards. The co-branded cards also act as Costco membership cards and come with a rewards program.
The original contract with Amex ends March 31 this year, but “our plan is to extend that” by a few months until the Citigroup deal kicks in, said Richard Galanti, Costco’s chief financial officer.
The timing of the transition “is fluid,” Galanti said. “It’s between Amex and Citi — negotiating and completing the agreements to do that transition.”
For customers, he said, “there won’t be any gap in the middle.”
Costco is reportedly getting a sweet deal — near-zero expenses — in its arrangement with Visa and Citigroup, according to a Bloomberg News report, citing people familiar with the arrangement. Its deal with Amex, in contrast, had Costco paying about 0.6 percent of each transaction.
Once the transition occurs, Costco will accept all Visa credit cards — not just those issued by Citigroup — at its U.S. stores, Galanti said.
For Visa cards issued by other companies, Costco will still incur small fees, but the incentives from Citigroup and Visa offset them, the Bloomberg report says.
Costco currently has 688 warehouses, 488 of which are in the U.S. and Puerto Rico.
