As Subscription Insider reported last month, the Costco and American Express (AmEx) “divorce” became official on Monday, June 20^th.  It has now been just over a month since all Costco branded American Express cards transferred to Citibank’s Visa portfolio. 

The predictions on decline rates increasing where many when the split was announced, and with good reason. The Costco cards accounted for about ten percent of all AMEX cards in the world, with most of those residing in the U.S.  

Now one month in, the impact of the AMEX Costco shift can already be felt by many. In the past, there have been major portfolio shifts such as USAA, the ninth largest issuer in the U.S., recently switching from MasterCard to Visa.  The AMEX Costco shift, however, is different.  Since American Express cards operate separately from the Visa/MasterCard network, they don’t participate in the same Account Updater pool, usually relied upon by recurring merchants to help get new card information and retain their subscription customers.

PLC reviewed the impact to its clients, and it wasn’t pretty.  The AMEX Costco cards became invalid on June 20^th.  In looking at the data, the declines in the last ten days of the month brought down the overall AMEX approval rates to the lowest in at least 18 months, averaging about 18% lower than previous approval rates:

As we evaluate July data, we are seeing continued decreases in approval rates, with many of our merchants having July include their first renewal event since the portfolio change, rather than June.