Boston, MA 09/19/2014 (wallstreetpr) – Mastercard Inc (NYSE:MA) is replacing American Express Company (NYSE:AXP) as Costco Canada’s credit card partner. The move expands its customer-base and is also expected to have a positive impact on its revenue, but it is a loss to its rival, American Express. Costco Canada and American Express ended their 15-year partnership over what sources termed as a failure by the companies to agree on some issues.
Card issuance business is competitive, and players do not hesitate to tap opportunities whenever they appear. That is the case with Mastercard following its latest deal with the Canadian unit of Costco. The latest card deal brings together Mastercard Inc (NYSE:MA), Capital One and Costco. Capital One will issue co-branded cards to Costco customers. The cards will serve membership purposes and also double up as payment cards. The deal gets better considering that the $90 billion global payments provider, Mastercard, said it reached an agreement with Costco Canada to accept its cards from other issuers, not just Capital One.
The end of 15-year era
As concerns, the exit of American Express as Costco Canada’s card partner, it is believed that the companies failed to agree on certain matters and the breakdown in the talks led Costco to shop for another card partner. American Express and Costco Canada have been in card business relationship for 15 years so far, but the card relationship will be terminated at the end of this year.
The latest business deal validates Mastercard Inc (NYSE:MA)’s commitment to a strategic approach to growth. The company is doing more in the sense that it is rolling out new products to enhance customer experience while attracting new customers with the same. It recently announced integration of Apple Pay into its system, and it is also pushing its geographical boundaries to tap business in emerging markets, in Africa, for instance.
Mastercard is a Buy
Analysts on Wall Street are optimistic about Mastercard Inc (NYSE:MA)’s prospects. Perhaps that explains the company’s consensus “buy” rating on the Street. Mastercard surpassed expectations in its most recent quarterly results. It earned $0.80 per share at a time when analysts expected $0.77 per share.
