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Fidelity ends American Express, Bank of America partnership

Monday 4 January 2016 11:38 CET | News

Fidelity Investments, an online trading brokerage, has announced that it has dropped the credit card partnership with American Express Co (AXP.N) and Bank of America Corp (BAC.N), ending a 12-year partnership yielding billions of dollars in fees.

Fidelity, which has 24 million customers, said its new partners will be US Bancorp (USB.N) and Visa Inc (V.N), Reuters reports. The alliance will provide Visa branded credit-card products to US consumers, including Fidelity customers.

The switch is another setback for American Express, which already is reeling from its lost deal with warehouse club retailer Costco Wholesale Corp (COST.O). AmEx said earlier in 2015 that the loss of the Costco contract would hurt profit for two years. AmEx shares are off 25% in 2015.

Ram Subramaniam, president of Fidelity’s retail brokerage business, did not give any specific reason for ending the partnership with American Express and Bank of America. Since 2003, Fidelity has offered 2% cash back credit cards with American Express and Bank of Americas FIA Card Services. During that time, Fidelity customers have earned USD 1.1 billion cash rewards.

The new alliance will feature cards with chip security technology, with access to digital wallets that include Apple Pay, Samsung Pay and Android pay. The new card program will issue the Fidelity Rewards Visa Signature Card and the Fidelity Investments 529 College Rewards Visa Signature Card, where card members can earn unlimited 2% cash back with no annual fees, caps or categories when directing rewards into eligible Fidelity accounts.

US Bank also has agreed to acquire Fidelity’s existing co-brand credit card portfolio with about USD 1.7 billion in associated balances.


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Keywords: Fidelity, American Express, Bank of America, partnership, drop, Visa, cards, online payments, investment, Customers
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