Capital One Financial Corp. and MasterCard Inc. struck a deal with Costco Wholesale Corp. in Canada to issue a co-branded credit card when the retailer's contract with American Express Co. ends this year.
The credit card will also serve as a Costco membership card, McLean, Virginia-based Capital One and MasterCard said yesterday in separate e-mailed statements. Costco will also accept all other MasterCard credit cards at its Canadian locations, according to the statements.
The partnership with Costco "aligns with our vision to continue growing our credit-card portfolio in Canada," said Shane Holdaway, president of Capital One Canada.
Costco notified customers this week that it will stop accepting all Amex cards in Canada on Jan. 1 after negotiations between the two companies to renew the contract fell through. New York-based Amex, the biggest U.S. credit-card issuer by purchases, was the only credit card accepted at Costco stores. The company has a separate contract with Costco in the U.S.
Beginning in January, MasterCard will be the sole credit-card network accepted at Costco in Canada, said Serda Evren, a spokeswoman for the Purchase, New York-based payments processor. Richard Galanti, chief financial officer of Issaquah, Washington-based Costco, declined to comment.
Costco's Canadian operations generated $17.2 billion in revenue in fiscal 2013, according to data compiled by Bloomberg. Costco has 88 stores in Canada, compared with 468 in the U.S. and Puerto Rico, according to its website.