While the “ability to pick up $3 billion in high-quality credit card balances all in one swoop does not happen every day,” Scotiabank analyst Meny Grauman said in a note to clients Thursday, that is not why Canadian Imperial Bank of Commerce agreed to buy Capital One’s entire Costco Mastercard business in Canada.

“The real prize here for CIBC will be the cross-selling opportunities to millions of affluent card holders, only a small portion of which are current CIBC customers,” said Grauman.

The deal, which will see CIBC become the exclusive issuer of Costco Mastercards in this country as of early 2022, will increase the Toronto-based lender’s total credit card balances roughly 30 per cent to $13 billion. It will also mark CIBC’s first foray into the Mastercard platform, having previously offered credit cards using the Visa platform.

Existing Capital One Costco Mastercards can continue to be used until CIBC begins issuing new cards early next year, according to a CIBC statement. Even then, retail analyst and author Bruce Winder said consumers likely won’t notice much of a difference.

“I can’t see their relationship changing with Costco much at all,” Winder said in an interview.

CIBC will see “a nice, steady and growing portfolio of receivables” through this transaction, Winder said, though he noted “it isn’t just about the money that CIBC is going to make off of receivables.”

“It is the whole ability for CIBC to get ahold of those customers and cross-merchandise to them, to sell them other CIBC products and services,” he said, echoing Grauman’s view. “That is really the big gain for them.”

Costco has more than 10 million members across Canada, according to its website, though it is unclear how many of them are Costco Mastercard cardholders.

The Capital One version of the Costco Mastercard can also serve as a Costco membership card and CIBC said that will continue to be the case with its own version, though a spokesperson confirmed that cardholders will still be required to pay their usual Costco membership fees. In other words: the benefit to consumers is solely to have one less card in their wallets.

As far as other benefits are concerned, the existing Capital One Costco Mastercard offers cardholders 0.5 per cent cash back on their first $3,000 in purchases and one per cent for purchases above that threshold, though that return rises to two per cent cash back when used to buy gas and three per cent for restaurant purchases.

Also, unlike most retailer-branded credit cards such as Canadian Tire Corp’s Mastercard, the Capital One version of the Costco Mastercard does not offer additional rewards or bonus perks for purchases made specifically at Costco. However, CIBC spokesperson Nima Ranawana suggested its version may offer some improvements.

“While we will be releasing full details of the rewards offer at a later date, we’re committing to enhancing the overall value members receive from their Costco Mastercard,” said Ranawana via email. “Information about added features and benefits as well as the program transition will be released in the coming months.”