National / International News
The Costco and American Express partnership, which is ending at the end of March, was just one example of what credit card companies are doing more of these days.
American Express offered an official Costco card and had been the only credit card you could use to buy stuff at the retailer, which posted $110 billion in revenues for fiscal year 2014.
Their partnership was a co-branding arrangement. Such arrangements have become more common, says Jason Arnold of RBC, and offer loyalty programs such as airline miles or cash-back cards. These arrangements are alluring to risk-averse credit issuers, says Arnold, because they are less likely to result in delinquencies.
"If a card-member wants to keep their rewards, they typically have to pay their card on time," Arnold says.
Since the Great Recession, banks have been increasingly employing co-branding agreements to stand out from the competition, instead of competing with each other on lower interest rates, says Arnold.
Co-branding partnerships can encourage spending. American Express says 20 percent of its monthly outstanding balances are on its Costco cards. And, 70 percent of the money people spend on those cards, isn't even spent at Costco, according to the company.
Customers have been using the cards for other purchases, too.
Sameer Gokhale, who tracks the banking industry at Janney Capital Markets, says co-branding gives credit card companies a captive customer base.
"You have this one merchant. You have customers loyal to this one merchant," says Gokhale, "In this case it was Costco."
But he adds that it probably did not make sense for AmEx to retain the partnership under the terms which he thinks Costco was asking: accepting lower fees for point-of-sale transactions at Costco stores.
For its part, American Express says it will try to hold onto its many Costco credit card customers by offering them other AmEx cards. It also plans to ramp up spending on marketing.
Today, we kick off From the Hills to the Valley, our series on what divides Hollywood and Silicon Valley, and what pulls them closer? We are going to talk about a lot of different things - from creativity and fame to piracy and lobbying - but we begin with how Hollywood sees and, therefore, represents Silicon Valley.
Black Mirror, Wortham says, is an un-Hollywood version of how technology is changing our lives. She thinks one reasons it’s difficult for hollywood to represent silicon valley is that people “sitting behind screens,” is rather “boring and hard to illustrate.”
What about The Social Network? “It was great,” she says, “but you couldn’t get away from scenes of Jesse Eisenberg furiously coding. How do you make that sexy?”
Wortham isn’t sure Hollywood could have made a series like Black Mirror.
“I don't know that those narratives are very popular here," she says. “When we do dystopian narratives they tend to focus on collapse of civilization or a zombie virus outbreak. Not necessarily computers have gone haywire and they are coming for us.”