Paying for the contents of you shopping cart at Costco has always been different than other places. Whereas other merchants accept as many payment types as possible, allowing as many people as possible to shop and spend money, Costco looks at the payment process differently. They see the checkout as one more way to reduce costs for their members. If Costco only accepts one type of credit card, they negotiate a preferred rate on transactions and pass on the savings. That’s why you were only able to use an American Express card at Costco stores (unless you paid with cash, check or debit card). That was until American Express lost the Costco contract to VISA and all of the Costco credit cards were changed from AMEX cards to the Citi Costco Anywhere VISA card. Now you can use any VISA card at Costco, but you’ll earn more cash back with the Costco Anywhere card. Still, you have a limited number of ways to pay for Costco purchases.
Anyway, Costco just announced that they are now accepting payments from mobile wallets. That’s the payment features on smart phones like the Apple iPhone, Samsung Galaxy and phones running the Google Android OS. All three of these systems allow you to save your credit card information on your smartphone and just tap the checkout device to make payments.
Before you get too excited, Costco will only accept VISA credit card payments through the mobile wallet apps so don’t go and try to sneak in a AMEX or Mastercard for payment. The reason why people are excited about this is that some credit cards, like the U.S. Bank Altitude Reserve (Only open to current U.S. Bank customers), have mobile payments as a bonus category paying 3 points per dollar. That’s a better return than the Costco Anywhere Visa which only earns 2% cash back on Costco purchases.
If that doesn’t apply to you, it still makes sense to pay attention because cards, like the Chase Freedom, will often include mobile payments as a rotating 5% cash back category.
The currently accepted payment forms at Costco are:
- NEW: Apple Pay, Google Pay and Samsung Pay
- Visa credit card
- Cash
- Checks
- Debit cards
- EBT
- Costco Cash cards
If you really need to use a different card, you can pay with AMEX, Mastercard or Discover on the Costco.com website to purchase Costco cash cards. This way you can get around the VISA only requirement when one of your other cards, like Discover, puts Warehouse Clubs as a 5% category but you only have a Costco membership.
I have mobile payments set up on my iPhone but I hardly ever use it. I find it just as easy to put my chip card into the reader than to unlock my phone, open the payment app and then authorize payment. The only use I have is when I come across a public transit system, like London or Chicago, that accepts mobile payments.
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This post first appeared on Your Mileage May Vary
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