why does costco only take visa

Costco only accepts Visa credit cards at their warehouses due to an exclusive partnership they negotiated with Visa. This deal guarantees Visa a massive volume of transactions across all Costco stores, and in return, Visa offers Costco very low processing fees — less than 0.4%, significantly lower than typical credit card fees that can be up to 3.5%. By limiting credit card acceptance to Visa only, Costco reduces its merchant fees substantially, saving millions each year and passing those savings to its members in the form of lower prices. This exclusivity is part of Costco's broader strategy of leveraging scale and partnerships to reduce costs. Although credit card payment is restricted to Visa only, Costco still accepts other payment methods like debit cards (including those on Mastercard and others), cash, checks, and mobile payments. Online purchases at Costco.com are an exception where Mastercard credit cards are accepted. This exclusivity with Visa also ties to Costco issuing a co-branded Visa card through Citibank for members to maximize rewards when shopping at Costco.