American Express Co. said its merchant agreement with Costco Wholesale Corp. will end next year, amid reports that the bulk retailer is negotiating with other credit-card companies.
“Taking a very disciplined approach, we began discussions on a possible renewal with Costco well in advance of the contract expiration. However, we were unable to reach terms that would have made economic sense for our company and shareholders,” Kenneth I. Chenault, chairman and chief executive of American Express, said in a news release.
The card company said the pact would end March 31, 2016. Shares of American Express fell 2.5% in premarket trading to $ 83.90.
Media reports late last year indicated that Costco was negotiating with other credit-card companies, including Capital One Financial Corp and MasterCard Inc. The change already has occurred in Canada, where Costco last year replaced American Express with those other two card companies.