For the first time American Express Co. has opened its global merchant network to another card issuer, in a hybrid cobranding deal in France.
American Express, the carmaker Citroen, and Sovac, a private-label card issuer in France, announced the agreement May 30 in Paris.
In a departure from traditional cobranding arrangements, American Express will not issue the cards. Instead, the Citroen Carte Rouge will be issued by Citroen Financement, a subsidiary of Sovac, which had been issuing a private-label version to about 120,000 people.
Holders of the card - which will bear the American Express logo - will have access to the company's global network of some 3.6 million merchants.
It is the second cobranding deal that American Express has forged in France, where banks are not permitted to issue cobranded cards.
In the first such deal, American Express signed an agreement with French travel company Accor to market cobranded cards. The partners said they would roll out the product in other European markets next year.
"It gives us a window of opportunity to do interesting business in France," said Jane Drew, an American Express spokeswoman in London.
Use of Carte Rouge in a transaction with an American Express merchant earns the customer points that can be redeemed for discounts on services provided by Citroen. Every time the card is used for payment at Citroen, the customer earns points toward a new Citroen car.
The no-fee card comes with a competitive interest rate, the spokeswoman said. Beyond access to the merchants network, the card does not give the cardholder any of the benefits or services that American Express cardholders have, she added.
Susan Roth, an analyst with Bear Stearns, said the arrangement provides "more evidence of progress that banks and merchants recognized the value to issue and accept American Express cards."
