Costco ties up with Citigroup, Visa for U.S. co-branded cards

[March 02, 2015]  (Reuters) - Warehouse club retailer Costco Wholesale Corp said on Monday it had tied up with Citigroup Inc and Visa Inc  to issue co-branded credit cards in the United States and Puerto Rico.

Citigroup will exclusively issue the co-brand cards and Visa would provide the payment network, replacing American Express Co, from April 1, 2016, Costco said.

Visa shares rose 1.6 percent in premarket trade, while Citi shares were up nearly 1 percent. Costco's were little changed.

Costco, which caters to relatively higher-income customers than Wal-Mart Stores Inc <WMT.N> and Target Corp, said last month it would stop partnering with AmEx to issue co-branded cards for its U.S. stores.

Costco, which sells everything from jewelry to fresh produce at its cavernous members-only stores, had already replaced AmEx with Capital One Financial Corp and MasterCard Inc <MA.N> as its card partner in Canada since the start of this year.

That move had raised speculation that the companies could also replace AmEx in the United States.

MasterCard shares were down 1.2 percent premarket on Monday and Capital One shares were unchanged.

(Reporting by Avik Das in Bangalore; Editing by Maju Samuel and Savio D'Souza)

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