BJ’s Wholesale Club Ditches ADS, Moves Credit Cards to Capital One

Alliance Data Systems Corp (ADS) has lost BJ’s Wholesale Club as a client, The Wall Street Journal (WSJ) reported Tuesday (Jan. 18).

The club has moved its co-branded credit cards to Capital One, which is a major detriment to ADS, which specializes in branded credit cards.

Per the report, BJ’s was among its biggest partnerships, and its accounts totaled nearly $1.5 billion in balances. During its third quarter, ADS had around $15.5 billion in overall balances.

Additionally, BJ’s filed a lawsuit against ADS on Tuesday in Massachusetts Superior Court, over claims that the company has slowed down the transfer of the existing card accounts.

An ADS spokeswoman told the WSJ that the allegations are inaccurate and ADS has “a 30-year track record of delivering the highest level of service and support to our valued brand partners.”

She said that includes operating “responsibly and with the utmost integrity” and added that ADS believes it is “in full compliance with the terms of our contractual agreement.”

The WSJ report notes that BJ’s has over a million members in possession of the cards, and the contract with ADS was set to expire later in the year.

In the court papers, BJ’s claims the delay is partly because ADS is trying to convert its existing tech platform, which includes card account info and balances, cycle dates and demographics.

PYMNTS reported last year that BJ’s underwent a partnership with Citizens Financial to offer buy now, pay later (BNPL) services, adding competition to a market dominated by specialized companies like Klarna and Affirm.

Read more: Citizens Financial, BJ’s Wholesale BNPL Pact Shakes Up Retail’s Hottest Finance Party

PYMNTS wrote that BJ’s decision to enter the field was significant because, according to Citizens Pay President Andrew Rostami, members will now “have access to modern, monthly installment plans that work for them so they can make large purchases responsibly.”

He said the program will be available in over 200 stores and apply to items worth $99 or more, and the offering will be included for those using delivery, curbside pickup or buy online, pick up in-club.