Note that this special relationship only likely applies to transactions that use the Amazon MasterCard on Amazon.com, and MasterCards issued by other companies still impose full rates.
Costco ran into this with American Express, though in retrospect the move to Visa seems like a worse move (more non-Costco Visa cards in circulation).
> Costco ran into this with American Express, though in retrospect the move to Visa seems like a worse move (more non-Costco Visa cards in circulation).
Could you expand on it a worse move for Costco? I thought it was great they moved to Visa because majority of Americans does not have Amex for credit card. The only way we can use our Visa card is through debit card only. So by moving to Visa (they have largest cardholders than Amex/Discover in America), Costco gained more consumers so the consumers can use their Visa credit card without resorting to debit card. It helps me a lot because I don't and never have Amex. Amex don't have a lot of retailers coverage (they used to be popular back in the 80s/90s), same for Discover. I recalled Amex have higher transaction fees, I believe higher than Discover, and Amex explicitly disallow passing the fee to the consumers. So made sense retailers prefer Visa/MC because they have lower transaction fees. This is what I remember back in the day when Costco made this announcement.
Its bad for Costco because they pay higher fees on credit cards than debit cards or cash. Having an expanded pool of people using credit cards is good for the credit card holders, but not Costco. If Costco wanted more credit card users, there's no reason they couldnt take every credit major credit card.
The reason I like AmEx is that they are much more customer friendly. But the things they do to be customer friendly also makes them less liked by companies.
I’ve been a CostCo member since at least 2006. I really liked the fact that they gave me an AmEx, but I didn’t really use it for anything other than CostCo.
About a year later, I discovered that you could use any major credit card to debit card to pay for your goods at CostCo, so long as you identified yourself with your CostCo branded card. I stopped using the CostCo branded card soon thereafter.
After they switched to Visa, I stopped going to CostCo pretty much entirely.
It wasn’t until the pandemic started that I went back to CostCo on a couple of occasions to buy some things that were not available elsewhere.
I’ve got enough Visa and MasterCards. I don’t need any more.
To complicate it even more, in Canada they will accept a Costco-issued Visa. As well all US debit cards I've tried with Visa Debit cause all kinds of confusion. Drives me nuts sometimes, especially during that period which my local warehouses were refusing to accept cash. Even if you're a US Costco member.
You can pay with Visa online, but if you return to a store they hand you cash. It's really weird how anti-Visa Costco is in Canada.
> MasterCards issued by other companies still impose full rates.
Not at all. These exclusive acceptance deals do usually have lower-than-otherwise rates for all cards from that issuer, though perhaps not as low as the co-branded card.
Think about it - if Costco had the same fees from a normal (not co-branded) Visa card as they did from a normal MasterCard, what incentive do they have to disallow normal MasterCards but still allow normal Visa cards?
special, UK-based relationship, sounds like, which then is still neatly explained as a consequence to brexit - Amazon UK Visa = expensive EU charge, Amazon UK MC = UK charge.
