How much does Costco pay Visa?
Costco pays Visa an interchange fee of around 0.4% for each Visa credit card transaction at Costco stores. Costco struck a deal with Visa for this greatly reduced interchange fee in 2016, and the membership warehouse club agreed to accept only Visa cards at its stores in exchange.
By partnering exclusively with Visa and negotiating a low interchange fee, Costco can pass extra savings on to its members. Meanwhile, most other merchants still must pay the credit card networks a surcharge of around 2% to 3% of the purchase amount to process credit card transactions.
It's worth noting that prior to its agreement with Visa, Costco only accepted American Express credit cards at its stores. Costco was paying American Express a 0.6% interchange fee, still considerably lower than the standard interchange fee. Costco ended the deal with American Express after the two sides were unable to negotiate an even lower fee.