Cathay United Bank confirmed Monday that its 10-year deal with Costco to produce co-branded credit cards for the American warehouse club will end as planned on Aug. 7, 2023.
The 2.7 million holders of co-branded Cathay United Bank credit cards will no longer be able to use them to make purchases in Costco’s 14 member-only stores in Taiwan once the deal expires.
In a statement, Cathay United Bank said that cardholders would be able to continue using their co-branded cards in Costco as usual before Aug. 7, 2023.
Costco only accepts co-branded credit cards for noncash payments in its stores, and reports suggest that Cathay United Bank, which had hoped to extend the agreement, was outmuscled by a NT$1.2 billion (US$37.34 million) offer from Taipei Fubon Commercial Bank.
Taipei Fubon Commercial Bank, the flagship retail banking arm of Fubon Financial Holding Co., has yet to comment publicly on the rumored deal.
Costco, meanwhile, said in a statement it was considering its options regarding a new co-branded credit card partner, adding that its members’ interests would be at the forefront of any decision.
In a statement announcing the impending end of its deal with Costco, Cathay United Bank expressed gratitude to the 2.7 million co-branded cardholders for their support.
According to Cathay United Bank, the number of co-branded credit cardholders has risen sharply from only 900,000 near the start of its deal with Costco in 2014.
The bank added that co-branded credit cardholders could change the benefits resulting from the consumption at Costco ahead into cash equivalents to pay their credit card bills after the agreement expires.
In addition, Cathay United Bank said customers would be given the chance to transfer their co-branded Costco credit cards to the soon-to-be-launched CUBE credit card program.
The bank said it would disclose the details of the CUBE program soon.
Cathay United Bank is the second largest credit card issuer in Taiwan, having issued 7.89 credit cards as of September, behind CTBC Bank, a unit of CTBC Financial Holding Co., with 8.33 million, analysts said.
However, Cathay United Bank has 5.57 million active credit cards, defined as cards used to make purchases within the last six months, 387,192 higher than CTBC Bank, analysts added.
In 2013, Cathay United Bank took over the co-branded credit card agreement with Costco from CTBC Bank.
If Fubon Bank takes over the co-branded credit card deal with Costco as rumored, the bank is expected to see its active credit cards grow to 5.64 million, surpassing Cathay United Bank, according to analysts.
Source: Focus Taiwan News Channel