Nadia Gonzaga’s blog post from September describes a few benefits of Costco Canada’s new partnership with Capital One and Master Card and how the overall effect of the partnership can greatly benefit Costco Canada customers. As an avid Costco patron myself, I support the overall change to MasterCard; however, there are some key elements from the article and Gonzaga’s blog post that I would like to expand on that show the complexity of the situation.
Costco’s New Capital One MasterCard Cr. CapitalOne
What does Costco have to consider?
I agree with Nadia and the article that MasterCard is a lot stronger and more renowned than America Express. MasterCard already has a strong user base internationally, compared to American Express which is mostly popular in America, and better benefits overall. I personally believe this will greatly benefit both Costco and MasterCard. MasterCard benefits as Costco customers are required to create a MasterCard-Costco Membership card to shop while Costco gains by having the popularity, attractiveness and strength of the MasterCard attached to its membership. Personally, there is no surprise why Costco would partner with MasterCard over Amex!
MasterCard Cr. MasterCard
However, I have noticed a few cons that are not addressed in the article. Despite that MasterCard may be better than America Express, the majority of Costco customers have already grown accustomed to Amex. I personally believe this switch may deter customers who enjoy their current Amex or are too lazy to go through the switching process. Amex might not be as popular, but for fifteen years, it has been a symbol of Costco. Completely shifting to MasterCard is a humongous change – a change of an entire system.
American Express Cr. American Express
Yet, in the end, I still believe the pros outweigh the cons. The shift will be chaotic, but I believe in the long run, Costco will benefit as much as MasterCard, if not more.