Why is "CO-BRAND CARD" tied up with CLEKA company like Costco & AMEX used?

ByFrankieleon

Cards issued by companies such as department stores, hotels, airlines, etc. in cooperation with credit card companies are "Co · brand cardFor example, at Costco, we issue cards in partnership with American Express (AMEX) and offer members-only services. With this Costco and AMEX as an example, we explain the merits that the co-brand card mechanism and the benefits that the three parties, credit card company, affiliated company, card user, have.

Anatomy Of a Co-Branded Credit Card
http://thefinancebuff.com/anatomy-co-branded-credit-card.html


◆ What is a co-branded card?
Ko · brand card is a card issued in partnership with major retailers such as department stores and supermarkets, hotels, airlines, oil companies, special interest groups, and credit card companies. Partner companies can appeal services to customers by using co-brand cards. For example, Costco AMEX Card, American Air MasterCard, Nature Protection OrganizationSierra ClubVisa card, etc., which are credit cards bearing the names of companies and organizations, respectively. Credit card company carries out management such as card issuance and limit setting.

Benefits of credit card company getting from co-brand card
The advantage that the credit card company gains is that "by partnering with retailers etc., you can increase the number of credit card users and expand the sales network." For example, in AMEX, 20% of the user's card usage is used in Costco, and 10% of the card issue number is Costco AMEX card.

ByThe.Comedian

◆ Benefits of cooperating companies from co-branded cards
· Rebates from credit card company
Each time a co-branded company gets a rebate of about 100 dollars (about 10,000 yen) per user from a credit card company every time a user of a co-brand card increases. For this reason, affiliated companies have enthusiastically engaged in soliciting activities by establishing a dedicated window for Co-Brand Card contracts within the store, distributing application forms, and providing guidance at the time of accounting. In such affiliated companies, some employees are given special bonuses called "spiff" according to the number of co-branded card contracts.

· Bank fee is virtually zero
When a customer shops using a credit card, the store usually needs to pay a fee to the bank. However, in the case of co-branded cards, affiliated companies are rebating from the card issuing company. In most cases the bank fee and rebate are nearly the same, so the bank's fee will be virtually zero. By using co-brand cards for shopping by affiliated companies, users can earn more points than usual, and card users also benefit.

· Payment of payment of co / brand cards and distribution of part of the amount of use at other stores
Part of the delinquent fee will be distributed to alliance partners if the co-brand card user does not pay payment on the card usage amount. Also, if the user uses a co-branded card at a store other than a partner company, the affiliated company can receive a part of the amount of money from the credit card company. In the case of Costco AMEX card, 70% of the amount used is payment at shops other than Costco.

At Costco, we focus on AMEX credit cards accepted at the time of payment to increase the number of times we use co-brand cards, and we are taking a strategy to get more rebates like those mentioned above.

Benefits of both credit card company and partner companies
By using the co / brand card, it is possible to collect vast amounts of data such as demographics such as age and sex of customers and trends of shopping, so that both credit card companies and affiliated companies can utilize data for future marketing I can do it. In addition, there are merits that it is easier to expand the use of co-branded cards by offering discounts and points for co-brand card users only.

However, despite the above-mentioned advantages, Costco is expected to increase sales of AMEX in the US in April 2016End handlingdoing. This is because Costco wants to partner with a credit card company with a larger rebate amount than AMEX. Costco believes that customers who are shopping using credit cards will create a new co-brand card and follow Costco even if the affiliated card company of the co-branded cards changes. " It is seen.

Meanwhile, as Costco partnered with another credit card company, it is expected that users of AMEX will decrease in the future, and at the time when news of Costco and AMEX's tie-up resolving was announced, the stock price of AMEX was 2 days It is said that it fell by 10%.