Amex Reveals Its Post-Costco Strategy

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American Express took a major hit last year when wholesale chain Costco decided to sever ties with the credit card company, putting an end to a 16-year relationship that saw Costco exclusively accept American Express cards.

Now, American Express is working up a plan to regain some of the profits lost by Costco’s decision, which takes effect this year.

According to reports on Tuesday (Feb. 9), American Express is turning to small businesses to make up for those losses.

Specifically, Amex is eyeing small business lending and will reportedly pay online lending marketplace Fundera to feature its charge cards on the site. The company did not disclose how much it will pay Fundera, but the move hopes that SMEs shopping online for financing will be able to compare terms and ultimately choose an American Express small business card over traditional financing options.

American Express’ small business cards are offered under the OPEN brand.

In a recent interview with reporters, American Express Senior Vice President of Small Business Customer Acquisition David Rabkin said that the collaboration with Fundera is part of its refocus on small business lending.

Reports said 8 percent of the company’s worldwide annual spend made with American Express cards came through Costco in 2014. The partnership had Costco-American Express co-branded cards, which also made up 20 percent of Amex’s outstanding loans, reports added.

And while their collaboration’s official end has been pushed back from its previously scheduled March date, the credit card giant is still challenged with finding ways to make up for that chunk of business it can no longer rely upon.

According to reports, American Express already has an impressive presence in the small business financing space. Data from 2014 said the company saw $190 billion in purchases made on small business card products — a $68 billion increase from 2010.

However, just 10 percent of spending by SMEs is done with a card product, reports added, with small business owners relying on traditional loans and cash more than plastic.