Macy's Inc.'s decision to shift its cobranded credit cards to American Express Co. from Visa Inc. underscores the increasing competition among card networks and Amex's growth ambitions.

Citigroup Inc., which purchased Macy's credit card receivables in 2005, issues the retailer's private-label and cobranded Bloomingdale's and Macy's credit cards. Last week, Macy's agreed to switch the cards to Amex's network in the fall. (Citi will continue to issue them.)

The deal is a significant win for Amex, which is pushing to expand overall card acceptance and increase the volume of transactions processed on its network, analysts said. "American Express has had a reputation of being less widely used, but they have been trying to change that," said Beth Robertson, the director of payments research at Javelin Strategy and Research. "Clearly this deal is an indication of Amex's desire to expand overall usage and acceptance."

Amex also processes transactions for dozens of other cobranded cards issued by third parties, including 46 cobranded airline cards issued by various banks around the world.

In the U.S., Amex is the processor for several cobranded cards including Fidelity Investments' Fidelity Rewards card, which is issued by FIA Card Services (a unit of Bank of America Corp.) and the Universal Studios cobranded card issued by General Electric Co.'s GE Money unit.

Amex likely offered Citi and Macy's a more-attractive merchant-fee deal than Visa, said Brian Riley, a research director at TowerGroup. "The parties obviously negotiated some kind of interchange deal that works for everyone."

Amex declined to comment on details of the program.

The retailer's contract with Visa was due to expire this fall, and after reviewing all the options Amex provided "the best opportunity to benefit Macy's," a Macy's representative said.

Citi will mail Amex replacement cards to Macy's Visa cardholders by yearend, and Macy's said cardholders will see no changes in credit limits or in the ongoing Bloomingdale's Insider and Macy's Star Rewards loyalty programs attached to their cards.

Visa's exit from Macy's also suggests more trouble is brewing in cobranded card programs, Riley said. "Profit margins are thinner, and as issuers are under increasing pressure to make programs work, a lot of cobranded cards must be renegotiated."

Visa lost its role in another high-profile cobranded card program last month, when JPMorgan Chase & Co.'s cobranded Starbucks Duetto card program ended.

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