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American Express has a strategy to win back Costco customers

Andrew Meola
Amex striving for growth
Amex striving for growth

(Amex striving for growth)

American Express is undertaking an aggressive campaign to attract Costco customers.

The financial services company officially sold its Costco co-brand portfolio earlier this year, but Amex is still not giving up completely, according to Motley Fool. The company is mailing out offers to promote its Blue Cash Everyday Card to existing Costco cardholders.

The firm likely hopes that the card's benefits (no annual fee, 0% APR for 15 months) and rewards will incentivize customers to adopt the card. But if that does not work, Amex is also offering a $250 statement credit as a welcome offer for those that spend $1,000 in the first three months.

Amex's aggressive push for conversions indicates the potential significance of the Costco loss. The co-brand partnership accounted for 8% of Amex's global billed business and 17% of its U.S. cardholders in 2015.

And Amex is already feeling the effects of the split, as card spend among Costco shareholders dropped 16% year-over-year in the first quarter of 2016. This lowered the firm's overall billed business growth significantly during this quarter.

This new campaign could help Amex offset some of its Costco losses, but the company faces several hurdles to keeping Costco cardholders. In particular, the new Costco Visa card will offer some significant rewards. The perks of the Blue Cash Everyday Card could, however, promote adoption and help the company retain some of these Costco customers.

The world of payments is changing each day, as evidenced by the ongoing shifts with American Express and Costco. The rise of mobile payments, for example, is changing the way customers pay for goods.

For more, see the detailed report on the payments ecosystem from BI Intelligence. Click here to learn more about how you can gain risk-free access today.



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