What happened?
American Express
(NYSE:AXP) just lost another partnership. Fidelity announced that it is working with US Bancorp (NYSE:USB) and Visa (NYSE:V) as the new issuer and network for its 2% cash back card.

This marks the second partnership lost by American Express in the last 12 months. Last year, American Express announced that Costco (NASDAQ:COST) decided to end its 16-year partnership.

For what it is worth, Fidelity isn't as big of a deal as Costco. Bloomberg reported that Fidelity customers spent about $11 billion annually on their Fidelity cards, and that the portfolio currently includes only $1.6 billion of credit card loans, which US Bancorp is buying as part of the switch.

Does it matter?
Fidelity makes up about 1% of American Express's annual billed business of $1.02 trillion as of the end of 2014. Importantly, the loan book was never American Express's to begin with, thus the only loss is the loss of $11 billion of annual spending on its network. 

One of the reasons Costco was so important was because of its size. Costco card members made up 8% of global billed business and 20% of American Express's outstanding card member loans, on which American Express also earned interest income.

The Fidelity card fits in American Express's co-brand business, wherein the network typically agrees to issue cards on its network, and the retail brand -- an airline, department store, or investment company, in this case -- stands as the marquee name on the card.

American Express's 2014 annual report and letter to shareholders provides more context on the importance of co-branded deals for American Express. Importantly, as of year-end 2014, co-brand cards made up less than 30% of American Express purchase volume.

Put another way, however, losing 8% of transaction volume from Costco, and 1% from Fidelity, means that American Express has lost roughly one-third of its co-brand volume in the last 12 months. That's a difficult pill to swallow, serving as further evidence that rising competition for co-brand deals is shifting more of the economics away from the networks and to the issuing banks and retail brands.