“Can Costco's membership model become the financial relationship layer for middle-class American households, using exclusive financial products to deepen loyalty and justify membership renewal?”
Costco is a membership-based warehouse retailer that has progressively layered financial services onto its core retail flywheel. The membership model creates a captive financial relationship — Costco earns on memberships, not margins — enabling it to offer deeply discounted financial products (insurance, credit cards, payment processing) as member benefits. The company has expanded embedded finance gradually: exclusive co-branded credit card (now Citi/Visa), digital wallet (Costco Wallet / Costco Pay), supplier working capital (C2FO dynamic discounting), and most recently BNPL at checkout via Affirm (2025). The strategic thesis is using financial services as a membership value amplifier, not a standalone profit center.
Costco processes payments through Costco Payment Processing (self-operated via third-party program).
Costco's lending and capital products are provided by Affirm.
The Embedded Finance Index 2026 maps 2 layers in Costco's stack: Payments / PSP (Costco Payment Processing (self-operated via third-party program)); Lending (Affirm, Affirm BNPL (pay-over-time for Costco.com purchases $500–$17,500) and C2FO Dynamic Discounting (supplier working capital program)).
Costco was founded by Jim Sinegal and Jeffrey Brotman and is founded in 1983, headquartered in Issaquah, Washington, USA.
Get a read on where your own stack stands against Costco and the rest of its category — what they built versus bought, which providers they use, and where the gaps in your own strategy and competitive set actually are.